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2021 (4) TMI 100 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and default or not - HELD THAT - The instant Application is filed in accordance with law and a qualified Insolvency Professional is also suggested to appoint him as IRP, who is prima facie eligible to be appointed as such. Therefore, it is a fit case to admit by initiating CIRP by appointing IRP, and declaring moratorium etc., in respect of the Corporate Debtor. Application admitted - moratorium declared.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) 2. Existence of debt and default 3. Bona fide disputes raised by the Respondent 4. Limitation period for filing the petition 5. Appointment of Insolvency Resolution Professional (IRP) 6. Declaration of moratorium Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP): The petition was filed by M/s. Aster Technologies Pvt. Ltd. under Section 9 of the IBC, 2016, seeking to initiate CIRP against M/s. Solas Fire Safety Equipment Pvt. Ltd. due to a default amounting to ?4,35,487.50 as of 09.11.2016. The Tribunal found that the petition was filed in accordance with the law and met the requirements for initiating CIRP. 2. Existence of Debt and Default: The Operational Creditor supplied materials and completed the installation as per the work order dated 27.05.2016. An invoice for ?4,76,962.50 was raised on 09.11.2016, which was accepted by the Corporate Debtor after deducting TDS of ?41,475. Despite several reminders and a legal notice, the Corporate Debtor failed to pay the outstanding amount. The Tribunal noted that the Corporate Debtor acknowledged the debt and promised to clear the dues within 30 days in a letter dated 13.03.2018 but failed to do so. 3. Bona Fide Disputes Raised by the Respondent: The Respondent contended that the Operational Creditor failed to perform the installation and commissioning work properly, resulting in penalties and additional expenses of approximately ?6,40,000. The Respondent argued that there were bona fide disputes regarding the claims and that the petition was barred by limitation. However, the Tribunal found that the Respondent's acknowledgment of the debt on 13.03.2018 and the subsequent correspondence did not constitute a valid legal dispute. The Tribunal held that there was no bona fide pre-existing dispute. 4. Limitation Period for Filing the Petition: The Respondent argued that the petition was filed beyond the limitation period. The Tribunal noted that the cause of action arose on 09.11.2016 when the invoice was raised, and the Respondent acknowledged the debt on 13.03.2018. The petition was filed within the limitation period, counting from the date of acknowledgment of the debt. 5. Appointment of Insolvency Resolution Professional (IRP): The Tribunal appointed Shri Atiuttam Prasad Singh as the IRP, who was found to be a qualified Insolvency Professional with no disciplinary proceedings pending against him. The Tribunal directed the IRP to follow all extant provisions of the IBC, 2016, and submit progress reports to the Adjudicating Authority. 6. Declaration of Moratorium: The Tribunal declared a moratorium prohibiting the institution or continuation of suits, transferring or disposing of assets, and any action to recover property by an owner or lessor. The moratorium would be effective from the date of the order until the completion of the CIRP. The Tribunal directed the Board of Directors and staff of the Corporate Debtor to cooperate with the IRP. Conclusion: The Tribunal admitted the petition for initiating CIRP against the Corporate Debtor, appointed an IRP, and declared a moratorium. The Tribunal found that the debt and default were not in dispute, there were no bona fide pre-existing disputes, and the petition was filed within the limitation period. The Tribunal directed the IRP to follow the provisions of the IBC, 2016, and submit progress reports.
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