2020 (11) TMI 243 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Debt relates to invoice raised for audit fees and other professional work done in the Financial Year 2017-2018 and 2018-2019 - time limitation - HELD THAT - The amount of debt is more than ₹ 1 lacs which is not barred by law of limitation. The said amount has not been paid and no plausible defence has been put forward by Corporate Debtor. The Applicant has also provided MCA Data of the Corporate Debtor. The application is otherwise complete and defect free. It is also noted that no disciplinary proceedings are pending against the IRP whose consent is on record. Hence, he can be appointed to conduct Corporate Insolvency Resolution Process (CIRP). Application admitted - moratorium declared.

Issues:
1. Application under Section 9 of the Insolvency & Bankruptcy Code, 2016 by Operational Creditor against Corporate Debtor.
2. Admittance of the application based on debt claim and lack of response from Corporate Debtor.
3. Appointment of Interim Resolution Professional (IRP) and declaration of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016.
4. Duties and obligations of the IRP during the Corporate Insolvency Resolution Process.
5. Directions for public announcement, submission of claims, and continuation of supplies during the moratorium period.
6. Provision for advance payment to IRP and subsequent funding requirements.
7. Communication of the order to relevant parties and listing for further consideration.

Analysis:
1. The judgment pertains to an application filed under Section 9 of the Insolvency & Bankruptcy Code, 2016 by M/s. Maloo Bhatt & Co., the Operational Creditor, against M/s. Pet Metal Private Ltd., the Corporate Debtor, claiming a debt amount of ?3,02,303 for audit fees and professional work done in the Financial Years 2017-2018 and 2018-2019.

2. The Learned PCA representing the Operational Creditor highlighted that the debt was undisputed and duly served notice under Section 8 of the Code to the Corporate Debtor. The Corporate Debtor failed to respond to the notice or the application under Section 9, indicating no valid defense. The Tribunal found the debt amount not barred by limitation, unpaid, and lacking any plausible defense, leading to the admission of the application.

3. Subsequently, the Tribunal admitted the Corporate Debtor into Corporate Insolvency Resolution Process, declared a moratorium under Section 14 of the Code, and appointed Mr. Gordhanbhai Ratanbhai Godhani as the IRP. The moratorium prohibits various actions against the Corporate Debtor, and the IRP is tasked with conducting the resolution process as per the provisions of the Code.

4. The IRP is directed to perform functions outlined in specific sections of the Code and ensure cooperation from all personnel connected with the Corporate Debtor. The Tribunal emphasizes the duty of the IRP to protect the Corporate Debtor's property value and manage its operations as a going concern during the resolution process.

5. Further directives include making a public announcement for claims submission, ensuring continuity of supplies to the Corporate Debtor, and requiring an advance payment of ?25,000 to the IRP for the resolution process. The Registry is instructed to communicate the order to relevant parties and list the matter for further consideration on a specified date.

This comprehensive judgment outlines the legal proceedings and decisions taken by the Tribunal concerning the initiation of insolvency proceedings, appointment of an IRP, declaration of moratorium, and various obligations to facilitate the Corporate Insolvency Resolution Process.

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