2021 (4) TMI 8 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Debt - Existence of debt and dispute or not - HELD THAT - Despite the invoice were duly received and dues were acknowledged by the Corporate Debtor, they failed to pay the due amount. Hence, the Operational Creditor issued a demand notice under Section 8 of the Code on 31.08.2019. The Corporate Debtor failed to fulfil its obligations to make timely payment against supplies/services provided - It also appears from the Application that the claim amount satisfies the minimum default requirement prior to the notification of 24th March 2020 under Section 4 of the Code. On perusing the notice sent under Section 8 (2) of the Code and it is seen that the Corporate Debtor received the notices, however they did not pay the amount of unpaid outstanding due. Therefore, on all counts the Application deserves to be admitted. The present application is complete and the Applicants are entitled to claim its dues, which remain unpaid by the Corporate Debtor. In the light of above facts and circumstances the present application is liable to be admitted and CIRP ordered against the Corporate Debtor. Petition admitted - moratorium declared.

Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Default and outstanding dues by the Corporate Debtor.
3. Compliance with Section 9(3) of the Insolvency and Bankruptcy Code, 2016.
4. Declaration of Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016.
5. Appointment of Interim Resolution Professional (IRP).

Issue-wise Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016:
The applications were filed by the Operational Creditors, M/s. Ambani Vitrified Pvt Limited and M/s. Airson Ceramic Industries, under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against the Corporate Debtor, M/s. Nassco Trading India Private Limited. The Tribunal acknowledged that both applications contained identical claims and thus clubbed them together for a common order.

2. Default and outstanding dues by the Corporate Debtor:
- M/s. Ambani Vitrified Pvt Limited: Supplied vitrified tiles worth ?44,02,946 between 26.05.2016 and 15.08.2016. After partial payment, an outstanding amount of ?77,34,614, including interest, remained due from 30.11.2019. Despite a demand notice issued on 12.12.2019, the Corporate Debtor failed to clear the dues.
- M/s. Airson Ceramic Industries: Supplied ceramic tiles worth ?1,83,73,901 between 01.04.2016 and 31.04.2017. After partial payment, an outstanding amount of ?67,06,869 remained due. Despite a demand notice issued on 31.08.2019, the Corporate Debtor failed to clear the dues.

3. Compliance with Section 9(3) of the Insolvency and Bankruptcy Code, 2016:
The Tribunal verified compliance with Section 9(3) of the Code, which mandates:
- A copy of the invoice demanding payment or demand notice.
- An affidavit stating no notice of dispute from the Corporate Debtor.
- A certificate from financial institutions confirming no payment of the unpaid operational debt.
The Tribunal confirmed that the Operational Creditors had complied with these requirements, and the claim amounts satisfied the minimum default requirement under Section 4 of the Code.

4. Declaration of Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016:
The Tribunal declared a moratorium under Section 14(1) of the Code, prohibiting:
- Institution or continuation of suits or proceedings against the Corporate Debtor.
- Transfer, encumbrance, alienation, or disposal of any assets by the Corporate Debtor.
- Foreclosure, recovery, or enforcement of any security interest.
- Recovery of any property by an owner or lessor.
The moratorium will remain effective until the completion of the CIRP, approval of the Resolution Plan, or an order for liquidation.

5. Appointment of Interim Resolution Professional (IRP):
As the Applicants did not propose an IRP, the Tribunal appointed Mr. Renahan Vamakesan as the IRP from the panel of Insolvency Professionals for Kerala. The IRP is tasked with functions under Sections 15, 17, 18, 19, 20, and 21 of the Code. The Operational Creditors were directed to deposit ?2,00,000 with the IRP for initiating the proceedings.

Conclusion:
The Tribunal admitted the applications IBA/22/KOB/2020 and IBA/23/KOB/2020, initiating CIRP against the Corporate Debtor. The Registry was directed to communicate the order to all relevant parties immediately. The order was dated 23rd March 2021.

← Previous Next →