2021 (4) TMI 941 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT - The documentary evidence placed on record establishes that the Corporate Debtor failed to make the payments to the Operational Creditor. Therefore, all the legal requirements are fulfilled, the application is admitted, and the commencement of the CIRP is ordered against M/s. RS Seven Lifestyle Private Limited, which ordinarily shall be completed within 180 days, reckoning from the day this Order is passed. Application admitted - moratorium declared.

Summary

Issues Involved:
- Application under Section 9 of the IBC, 2016 for CIR Process initiation against Corporate Debtor.
- Debt amount due from Corporate Debtor.
- Details of goods supplied and payments made.
- Acceptance of invoices by Corporate Debtor.
- Compliance with legal requirements for CIRP initiation.
- Declaration of moratorium and appointment of Interim Resolution Professional.
- Payment to IRP and compliance with IBC provisions.

Analysis:
- The application was filed under Section 9 of the IBC, 2016 seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, M/s. RS Seven Lifestyle Private Limited. The total debt due from the Corporate Debtor was stated to be ?34,54,635/- as of a specific date.
- The Operational Creditor, a partnership firm in the business of sports apparel manufacturing, supplied goods to the Corporate Debtor against purchase orders. Invoices were raised, and partial payments were made by the Corporate Debtor, with credit notes adjusted. The Corporate Debtor accepted the invoices through express communications.
- Legal requirements, including sending a demand notice under Section 8 of the IBC, were fulfilled. The Corporate Debtor failed to make payments, leading to the admission of the application and the commencement of CIRP against the Corporate Debtor. The moratorium was declared to prohibit certain actions against the Corporate Debtor.
- An Interim Resolution Professional (IRP) was appointed, and the Operational Creditor was directed to pay a sum to the IRP for performing assigned functions. The IRP was mandated to comply with specific sections of the IBC, with cooperation expected from the Directors, Promoters, and management of the Corporate Debtor.
- Directions were given for the IRP to take charge of the Corporate Debtor's assets and for communication of the order to relevant parties. The order was pronounced in open court through video conferencing in the presence of the Operational Creditor's Counsel.

This detailed analysis covers the legal judgment's key aspects, including debt details, compliance with legal requirements, appointment of IRP, and necessary actions following the initiation of CIRP against the Corporate Debtor.