2021 (9) TMI 1195 - 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 Applicant has established the existence of debt and default on the part of the Respondent and the Respondent has not availed the opportunities provided by this Tribunal to defend the arguments made by the Applicant. This Tribunal admits this petition and initiates CIRP on the Respondent with immediate effect. Application allowed - moratorium declared.

Summary

Issues Involved:
- Application for initiating corporate insolvency resolution process under Section 9 of the Insolvency and Bankruptcy Code 2016 due to alleged default in clearing debt.
- Establishment of debt and default by the Respondent.
- Admission of the petition and initiation of corporate insolvency resolution process.
- Imposition of a moratorium under Section 14 of the Code.
- Appointment of an interim resolution professional (IRP) and confirmation by the Bench.

Analysis:

1. Application for Insolvency Resolution Process:
The Applicant, M/s. Supreme Packaging Industries, sought to initiate the corporate insolvency resolution process against the Respondent, M/s. Al-Tabarak Frozen Foods Private Limited, for an alleged default in clearing a debt of &8377;20,71,472.14. The Applicant detailed the transactions, stating that the Respondent failed to pay invoices amounting to &8377;16,16,292.44, despite repeated demands and a statutory demand notice under the IBC, 2016. The Applicant highlighted the principal and interest amounts due, leading to the application for insolvency.

2. Establishment of Debt and Default:
Upon the absence of the Respondent during the proceedings, the Tribunal declared the Respondent ex-parte. The Applicant successfully demonstrated the existence of debt and default by the Respondent. The Tribunal acknowledged the lack of response or appearance from the Respondent, leading to the admission of the petition and initiation of the corporate insolvency resolution process against the Respondent.

3. Imposition of Moratorium:
In accordance with Section 14 of the Insolvency and Bankruptcy Code, a moratorium was imposed on the Respondent. The moratorium included restrictions on legal proceedings, asset transfers, security interest enforcement, and property recovery actions against the Respondent. Essential supplies to the Respondent were to continue uninterrupted during this period. The moratorium was to remain in effect until the completion of the corporate insolvency resolution process.

4. Appointment of Interim Resolution Professional:
The Applicant proposed Mr. Vijay Kumar as the interim resolution professional (IRP), whose appointment was confirmed by the Bench. The IRP was tasked with taking necessary steps under the statute, specifically as outlined in Sections 15, 17, and 18 of the Code. The IRP was required to file a report within 30 days before the Bench, indicating further actions to be taken in the resolution process.

In conclusion, the Tribunal's judgment involved the successful application for insolvency resolution, establishment of debt and default, imposition of a moratorium, and appointment of an interim resolution professional to oversee the resolution process effectively.