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2021 (6) TMI 52 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - HELD THAT - The CD has not raised any dispute over quality or quantity of goods supplied by the OC. It is reiterated that the CD vide letter dated 09.06.2018 has acknowledged its liability to pay the outstanding dues of OC. Materials were supplied, invoices were raised and no dispute in respect of material supplied has been raised by CD. The applicant has placed sufficient evidence in support of its claim. Going by the above details, the OC has clearly established the existence of debt and default on the part of the CD. The petition is within limitation period. The present application deserves to be admitted. Hence, the present application is admitted initiating CIRP on the CD, with immediate effect - Moratorium declared.
Issues:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. 2. Compliance with provisions of the Insolvency and Bankruptcy Code, 2016. 3. Verification of outstanding dues and acknowledgment by the Corporate Debtor. 4. Appointment of an Interim Resolution Professional (IRP) and declaration of moratorium. Issue 1: Initiation of CIRP against the Corporate Debtor The petition filed by the Operational Creditor (OC) sought to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor (CD) for an alleged default in settling the amount due plus interest towards the goods supplied. The OC provided details of the transactions leading to the petition, including purchase orders, invoices, dishonored cheques, and acknowledgments of liability by the CD. Issue 2: Compliance with Provisions of the Insolvency and Bankruptcy Code The Tribunal examined the compliance with Sections 8 and 9 of the Insolvency and Bankruptcy Code, 2016. It was noted that the OC issued a demand notice under Section 8 and subsequently filed the petition under Section 9 after the CD did not dispute the claim or make the payment within the stipulated time frame. Issue 3: Verification of Outstanding Dues and Acknowledgment by the Corporate Debtor The CD, in its reply, did not dispute the quality or quantity of goods supplied by the OC but raised concerns about the interest amount over the debt. However, the CD acknowledged the liability to pay the outstanding dues subject to fund availability. The Tribunal found that the OC had provided sufficient evidence to establish the existence of debt and default by the CD. Issue 4: Appointment of an Interim Resolution Professional and Declaration of Moratorium The Tribunal admitted the application, initiating CIRP on the CD, and appointed an Interim Resolution Professional (IRP) to oversee the process. A moratorium was declared, imposing restrictions on legal actions against the CD and asset transactions. The IRP was directed to perform duties diligently, and the OC was instructed to deposit a fee for immediate expenses, to be reimbursed by the Committee of Creditors (CoC) as part of CIRP costs. This comprehensive analysis of the judgment outlines the key issues addressed by the Tribunal concerning the initiation of CIRP, compliance with legal provisions, verification of dues, appointment of an IRP, and declaration of a moratorium in the context of the presented case.
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