2021 (3) TMI 926 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor or not - Operational debt or not - pre-existing debt and dispute or not - HELD THAT - The petitioner has supplied goods to the respondent and the aforesaid chain of events clearly establish that the petitioner is operational creditor. Therefore in the instant case the petitioner very well falls within the definition of operational creditor and the amount outstanding is operational debt. Pre-existing default and dispute or not - HELD THAT - The Adjudicating Authority is only required to consider whether there is any default and the debt is due and payable. In the instant case the applicant has placed on record enough documents evidencing the default and hence the present application deserves to be admitted - In the instant application from the material placed on record by the Applicant this Authority is satisfied that the application is complete in all respect and the Corporate Debtor committed default in paying the operational debt due and payable to the Applicant - The documents produced by the operational creditor clearly establish the debt and there is default on the part of the Corporate Debtor in payment of the operational debt . Thus the corporate debtor has committed default in payment of operational debt and therefore it is a fit case to initiate Insolvency Resolution Process by admitting the Application under Section 9 (5) (1) of the Code - application admitted - moratorium declared.

Summary

Issues:
- Petition filed under Section 9 of The Insolvency and Bankruptcy Code, 2016 for operational debt.
- Default in payment by the corporate debtor.
- Examination of evidence and documents supporting the operational debt claim.
- Adjudication of the application and declaration of moratorium.

Analysis:
1. Petition under Section 9 of The Insolvency and Bankruptcy Code: The petitioner, an operational creditor, filed a petition against the respondent, a private limited company, for an outstanding sum of ?41,28,358/-, including interest, for goods supplied between 2016 and 2018. The respondent failed to clear the debt, leading to the issuance of a demand notice under section 8 of the Code.

2. Default in Payment: Despite multiple notices and opportunities provided to the respondent, no reply was filed, and no appearance was made on behalf of the corporate debtor. The records clearly indicated the default in payment by the corporate debtor, as evidenced by invoices, ledger accounts, and the cessation of goods supply due to outstanding payments.

3. Examination of Evidence: The Adjudicating Authority thoroughly examined the documents provided by the operational creditor, including invoices, ledger accounts, and demand notices. The authority found that the debt was due and payable, with no pre-existing dispute from the corporate debtor's side, meeting the requirements for admission of the application.

4. Adjudication and Moratorium Declaration: Based on the evidence presented and in line with legal precedents, the Adjudicating Authority declared a moratorium, prohibiting legal actions against the corporate debtor, appointing an Interim Resolution Professional, and ensuring the continuation of essential services to the debtor during the moratorium period.

This detailed analysis showcases the procedural steps followed, the legal considerations made, and the ultimate decision taken by the Tribunal in admitting the petition and initiating the Corporate Insolvency Resolution Process.