2021 (4) TMI 300 - 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 - Even though the Corporate Debtor admits categorically that there is amount due and payable, there is no default in making payment to the applicant - The debt and default are proved. The applicant herein has not proposed name of any Interim Resolution Professional. In view of the same, this Adjudicating Authority appoints Mr. Saradindu Jena is appointed as Interim Resolution Professional. Application admitted - moratorium declared.

Summary

Issues:
- Jurisdiction of the Adjudicating Authority
- Period of limitation for filing the application
- Debt and default proof
- Appointment of Interim Resolution Professional
- Moratorium order and its implications

The judgment delivered by the National Company Law Tribunal Cuttack Bench involved several key issues. Firstly, the Adjudicating Authority established its jurisdiction based on the location of the respondent's Registered Office. The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process against the respondent. The Tribunal confirmed its jurisdiction to hear the application.

Regarding the period of limitation for filing the application, the invoices in question were dated within a specific timeframe, from 11.02.2019 to 16.05.2019. The Tribunal found that the application fell well within the period of limitation, allowing it to proceed.

The Tribunal examined the debt and default claims presented by both parties. The applicant alleged that the respondent owed a total amount of &8377; 18,12,488 based on invoices and terms and conditions, including a 24% interest for delayed payment. On the other hand, the respondent disputed the interest claim and argued that they had settled various bills within extended credit periods. Despite admitting the amount due, the respondent claimed no default in payment due to unforeseen circumstances, such as a fire accident causing financial strain.

After hearing both parties, the Tribunal found the debt and default to be proven. However, since the applicant did not propose the name of any Interim Resolution Professional, the Tribunal appointed Mr. Saradindu Jena as the Interim Resolution Professional to oversee the process.

The Tribunal issued a comprehensive order admitting the application under Sections 8 and 9 of the Insolvency and Bankruptcy Code, 2016, initiating the Corporate Insolvency Resolution Process against the respondent. A moratorium order was passed, prohibiting certain actions against the Corporate Debtor, and essential services were to continue during this period. The order detailed the responsibilities of the Interim Resolution Professional, including convening a meeting of the Committee of Creditors and submitting progress reports. Additionally, the Operational Creditor was directed to deposit a sum with the Interim Resolution Professional for expenses, and the ex-management was instructed to provide necessary documents and information promptly.

In conclusion, the judgment addressed various legal aspects, including jurisdiction, debt and default determination, appointment of the Interim Resolution Professional, and the implications of the moratorium order, ensuring a structured process for the Corporate Insolvency Resolution.