2021 (8) TMI 54 - 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 - reply to the demand notice - HELD THAT - In its reply to the Demand notice dated 02.12.2019, the Corporate Debtor does not dispute the liability towards Operational Creditor but sought for time to pay its debt, the Corporate Debtor is not in a position to pay of its liability - On the date of final hearing Counsel for the Corporate Debtor submitted that they are willing to settle the issue and ready to make entire payment within a period of Two years. The proposal of the Corporate Debtor is not acceptable to the Operational Creditor. The application made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, the debt and default stands established and there is no pre-existing dispute brought on record. Hence, there is no reason to deny the admission of the Petition. In view of this, Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Petition admitted - moratorium declared.

Issues:
1. Company petition filed under section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) seeking Corporate Insolvency Resolution Process (CIRP).
2. Jurisdiction of the bench to deal with the petition.
3. Failure of Corporate Debtor to make payment leading to default.
4. Details of invoices raised by the Operational Creditor.
5. Notices sent to the Corporate Debtor and their responses.
6. Lack of reply from the Corporate Debtor despite ample opportunities.
7. Arguments presented by the Operational Creditor.
8. Dispute over liability and proposed settlement by the Corporate Debtor.
9. Compliance with legal requirements for admission of the petition.
10. Admission of the petition and initiation of CIRP against the Corporate Debtor.
11. Appointment of Interim Resolution Professional (IRP) and related directives.

Analysis:

1. The Tribunal addressed a Company Petition under section 9 of the IBC, filed by an Operational Creditor seeking to initiate Corporate Insolvency Resolution Process (CIRP) against a specific Corporate Debtor. The petition highlighted the failure of the Corporate Debtor to make a payment of a specified amount, leading to default.

2. The Tribunal established its jurisdiction to handle the petition based on the incorporation details of the Corporate Debtor under the Companies Act, 1956, as a Private Company limited by shares with the Registrar of Companies, Maharashtra, Mumbai. This jurisdictional aspect was crucial for the Tribunal to proceed with the case.

3. The petition detailed the invoices raised by the Operational Creditor for the supply of TMT/Round Bars, along with additional charges. It also outlined the timeline of notices sent to the Corporate Debtor regarding the outstanding dues and the subsequent responses received.

4. Despite providing ample opportunities, the Corporate Debtor failed to respond adequately, leading to the Tribunal considering the arguments presented by the Operational Creditor regarding the default and the lack of a satisfactory resolution proposal from the Corporate Debtor.

5. The Tribunal examined the compliance of the petition with legal requirements, confirming the establishment of debt default without any pre-existing dispute on record. This analysis led to the admission of the petition and the subsequent initiation of CIRP against the Corporate Debtor.

6. Following the admission of the petition, the Tribunal issued directives regarding the moratorium under section 14 of the IBC, the appointment of an Interim Resolution Professional (IRP), and various operational and compliance-related instructions for the CIRP process. The Tribunal's detailed order encompassed the necessary steps to be taken during the CIRP period, including the management of the Corporate Debtor by the appointed IRP.

7. The Tribunal also mandated the Operational Creditor to deposit a specified amount with the IRP to cover expenses related to public notices and claims. Additionally, communication directives were issued to ensure all involved parties were informed promptly about the Tribunal's decision and the ensuing procedures.

8. Overall, the Tribunal's judgment was comprehensive, addressing the legal intricacies of the case, ensuring compliance with the IBC provisions, and setting the groundwork for the effective resolution of the insolvency matter involving the Corporate Debtor.

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