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2021 (7) TMI 55 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - service of notice - existence of debt and dispute or not - HELD THAT - The case was listed for admission on various dates viz., 19.06.2020, 06.07.2020, 14.08.2020, 02.09.2020, 25.09.2021, 18.01.2021, 28.01.2021, 03.02.2021 and on 04.03.2021. Accordingly, the Adjudicating Authority ordered notice on 19.06.2020 and re-issued notice on 14.08.2020. Further, the Petitioner has served the notice on the Respondent and filed the proof of service. Even then none appeared for the Respondent and no reply has been filed. Further, I.A. No. 28 of 2021 was filed to carry out substituted service of notice on the Corporate Debtor through Paper Publication of the notice in the 'Hindu' and 'Udayavani' newspapers. This IA was disposed of by observing that the service on the Respondent is deemed to have been validly effected, and no further notice is required to be given. The Registry was directed to post the CP for admission. However, on that date also none appeared nor any objections were filed to oppose the claim of the Petitioner. The Respondent Corporate Debtor is deliberately not entering appearance and has no defense to offer on the case made out by the Petitioner in the instant Petition. The debt and default as mentioned in the Petition remain undisputed - The instant Petition is filed in accordance with the extant provisions of the Code and the Rules made thereunder. Petition admitted - moratorium declared.
Issues:
Initiation of Corporate Insolvency Resolution Process under IBC, 2016 based on default by the Corporate Debtor. Detailed Analysis: Issue 1: Default and Debt Claim The Petitioner, an Operational Creditor, filed a petition seeking to initiate Corporate Insolvency Resolution Process (CIRP) against the Respondent, a Corporate Debtor, for defaulting on payments totaling ?43,12,975, including interest at 18%. The Operational Creditor provided services to the Corporate Debtor under two agreements, raising invoices for the same. Despite partial payments made by the Corporate Debtor, the outstanding amount remained unpaid. The Corporate Debtor acknowledged the debt but failed to clear it, leading to the Operational Creditor issuing a Demand Notice, which was also ignored by the Corporate Debtor. Issue 2: Legal Proceedings The Tribunal noted that despite multiple notices and attempts at service, the Corporate Debtor failed to appear or respond to the petition. The Operational Creditor substantiated its claim with evidence, and the debt and default remained undisputed. The Tribunal found the Petitioner's claim valid and in accordance with the Insolvency and Bankruptcy Code, 2016 (IBC). The Tribunal appointed a qualified Resolution Professional to oversee the CIRP and imposed a moratorium on various actions against the Corporate Debtor's assets. Issue 3: Adjudication and Direction Based on the evidence presented and the lack of defense from the Corporate Debtor, the Tribunal admitted the petition and initiated the CIRP. The Tribunal appointed the Resolution Professional, declared a moratorium on certain actions, and directed full cooperation from the Corporate Debtor's Board of Directors and staff. The Resolution Professional was instructed to follow all IBC provisions and submit progress reports to the Tribunal periodically, with a follow-up hearing scheduled for a specific date. This detailed analysis outlines the key aspects of the legal judgment regarding the initiation of the Corporate Insolvency Resolution Process under the IBC, 2016, based on the default by the Corporate Debtor and the subsequent legal proceedings leading to the Tribunal's decision to admit the petition and appoint a Resolution Professional.
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