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2020 (5) TMI 3 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of dispute or not - HELD THAT - It is noted that the Corporate Debtor has admitted the liability by the letter dated 12-2-2018, at pp.34-35. There is no reply on behalf of the Corporate Debtor - There is unequivocal admission of the debt due and payable to the Operational Creditor in the letter dated 12-2-2018 (at pp.34-35), which is the reply to the Demand Notice dated 27-12-2017. The application made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Application admitted - moratorium declared.
Issues:
- Jurisdiction of the Tribunal - Default in payment by the Corporate Debtor - Admission of liability by the Corporate Debtor - Completeness of the application by the Operational Creditor - Admission of the Petition and initiation of CIRP - Moratorium under section 14 of the IBC - Appointment of Interim Resolution Professional (IRP) - Management during the CIRP period - Deposit by the Operational Creditor for expenses - Communication of the Order to relevant parties - Compliance report to be sent to the Registrar of Companies Jurisdiction of the Tribunal: The judgment establishes the jurisdiction of the National Company Law Tribunal, Mumbai Bench to hear the Company Petition filed under section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC). The Corporate Debtor being a private company limited by shares and incorporated under the Companies Act, 1956 falls within the jurisdiction of the Tribunal due to its registered office in Maharashtra. Default in Payment by the Corporate Debtor: The Operational Creditor filed the petition based on the Corporate Debtor's failure to make a payment of a specific sum as of the date of default. The Operational Creditor detailed the supply of goods and services to the Corporate Debtor for various projects, along with the payment terms agreed upon. The total debt due and payable was clearly stated, and interest for delayed payments was also included in the invoices. Admission of Liability by the Corporate Debtor: The Corporate Debtor acknowledged the debt in a letter dated 12-2-2018 and committed to clearing the amount in installments. The Tribunal noted the unequivocal admission of debt by the Corporate Debtor, as evidenced by the reply to the Demand Notice. The absence of any representation or reply from the Corporate Debtor further supported the admission of liability. Completeness of the Application by the Operational Creditor: The Tribunal found the application made by the Operational Creditor to be complete as required by law. It clearly demonstrated the default in payment by the Corporate Debtor, exceeding the minimum amount stipulated under the IBC. The Tribunal concluded that there was no reason to deny the admission of the Petition based on the completeness of the application. Admission of the Petition and Initiation of CIRP: Due to the admitted liability and the established default by the Corporate Debtor, the Tribunal admitted the Petition and ordered the initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Tribunal emphasized the importance of the clear admission of debt and the completeness of the application in reaching this decision. Moratorium under Section 14 of the IBC: Upon admitting the Petition, the Tribunal declared a moratorium under section 14 of the IBC, impacting various actions involving the Corporate Debtor's assets and legal proceedings. The moratorium would remain in effect until the completion of the CIRP or other specified events, with exceptions for essential goods or services supply. Appointment of Interim Resolution Professional (IRP): As the Operational Creditor did not propose the name of an IRP, the Tribunal ordered the appointment of an IRP in compliance with the regulations. The IRP's functions were outlined, and the management of the Corporate Debtor during the CIRP period would vest in the IRP. Deposit by the Operational Creditor for Expenses: The Tribunal directed the Operational Creditor to deposit a specified sum with the IRP to cover expenses related to issuing public notices and inviting claims. These expenses would be subject to approval by the Committee of Creditors (CoC), ensuring transparency and accountability in the process. Communication of the Order and Compliance Reporting: The Tribunal issued directives for the immediate communication of the Order to relevant parties and the appointment of an IRP. Additionally, a compliance report was to be sent to the Registrar of Companies, Maharashtra, Mumbai, within a specified timeframe for updating the Master Data of the Corporate Debtor, ensuring regulatory compliance and transparency in the proceedings.
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