2021 (6) TMI 23 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor defaulted in repayment of its dues - Operational Creditor - no pre-existing dispute - time limitation - HELD THAT - The instant petition was filed on 29.08.2019. The outstanding invoices were raised from 09.12.2014 to 24.12.2014 and the email was sent by the respondent regarding admission/acknowledgement of debt on 03rd June, 2017. The demand notice was issued by the applicant under section 8 of the Code on 20.08.2018. The petition filed by the applicant is within the limitation period. The corporate debtor has admitted the debt and not raised a pre-existing dispute and has not paid the amount due. The application is complete. The corporate debtor has committed default in payment of operational debt and, therefore, it is a fit case to initiate the Insolvency Resolution Process by admitting the Application under Section 9(5)(1) of the Code - Application admitted - moratorium declared.

Summary

Issues:
Admission of Insolvency Application under Section 9 of the Insolvency and Bankruptcy Code, 2016; Default in payment of operational debt; Appointment of Interim Insolvency Resolution Professional; Declaration of moratorium under Section 14 of the Code; Approval of the resolution plan or liquidation of Corporate Debtor.

Analysis:
1. Admission of Insolvency Application under Section 9 of the Insolvency and Bankruptcy Code, 2016:
The Petitioner, an Operational Creditor, filed a petition under Section 9 of the Code against the Respondent, a Corporate Debtor, for non-payment of dues amounting to ?48,02,475. The application included detailed evidence such as invoices, bounced cheques, legal notices, and correspondence, establishing the debt owed by the Respondent.

2. Default in Payment of Operational Debt:
The Respondent failed to clear the outstanding dues despite multiple reminders, bounced cheques, and legal notices. The Adjudicating Authority found that the Respondent had admitted the debt and did not raise any pre-existing dispute, leading to a clear default in payment of the operational debt within the stipulated time frame.

3. Appointment of Interim Insolvency Resolution Professional:
The Operational Creditor proposed the appointment of an Interim Insolvency Resolution Professional (IRP) to oversee the insolvency resolution process. The Adjudicating Authority approved the appointment of Mr. Sanjay Badrilal Punglia as the Interim IRP and directed the IRP to initiate the Corporate Insolvency Resolution Process and call for submission of claims as per the Code.

4. Declaration of Moratorium under Section 14 of the Code:
Upon admitting the petition, the Adjudicating Authority declared a moratorium under Section 14 of the Code, prohibiting various actions against the Corporate Debtor, including institution of suits, transfer of assets, enforcement of security interests, and recovery of property by lessors. The moratorium aimed to protect the Corporate Debtor during the insolvency resolution process.

5. Approval of the Resolution Plan or Liquidation of Corporate Debtor:
The order of moratorium would remain in effect until the completion of the Corporate Insolvency Resolution Process or until a resolution plan is approved or liquidation is ordered. The Adjudicating Authority directed the Interim IRP to manage the insolvency process and communicate the order to all relevant stakeholders, ensuring compliance with the Code and protecting the interests of all parties involved.

This detailed analysis of the judgment highlights the key legal aspects, procedural steps, and implications of the decision rendered by the National Company Law Tribunal, Ahmedabad Bench, in the matter concerning the insolvency proceedings between the Operational Creditor and the Corporate Debtor.