2021 (10) TMI 540 - 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 - time limitation - HELD THAT - As per Form V, Part IV of the application, the corporate debtor is liable to pay an outstanding sum of Rs. ₹ 4,00,000/- along with interest @12% p.a. The date of default as per part IV is 18.12.2019. The present application was filed on 28.02.2020, hence the debt is not time barred and the application is filed within the period of limitation - The Applicant has filed an affidavit under section 9(3)(b) dated 22.02.2020 affirming that no notice of dispute has been given by the corporate debtor relating to dispute of the unpaid operational debt - The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application. The present application is complete and the Applicant is entitled to claim its dues, remained uncontroverted by the Corporate Debtor, as no dispute was raised against section 8 notice reply to section 9 application was not filed on e-portal hence we proceeded the matter with hearing. The default in payment of the operational debt is beyond doubt and is established and even after order was reserved, on the day of clarification the corporate debtor requested to defer order for settlement but no settlement was forthcoming. The present application is admitted, in terms of section 9 (5) of IBC, 2016. Application admitted - moratorium declared.

Summary

Issues:
- Application under section 9 of Insolvency and Bankruptcy Code, 2016
- Agreement between Applicant and Corporate Debtor
- Termination of agreement without compliance
- Outstanding dues and non-payment by Corporate Debtor
- Demand notice and admission of dues by Corporate Debtor
- Filing of application, service, and jurisdiction
- Admittance of application and appointment of Insolvency Resolution Professional
- Direction for deposit by Operational Creditor
- Moratorium and communication of order

Analysis:
The judgment pertains to an application filed under section 9 of the Insolvency and Bankruptcy Code, 2016 by M/s. Finex Consultancy Services against M/S Plus Corporate Ventures Private Limited seeking initiation of the Corporate Insolvency Resolution Process. The Applicant, a sole proprietor, entered into an agreement with the Corporate Debtor for consultancy services. The agreement specified the professional fees and payment terms. However, the Corporate Debtor terminated the agreement without complying with the termination clause, leading to outstanding dues of ?4,00,000. Despite repeated requests and admission of dues by the Corporate Debtor, no payment was made, prompting the Applicant to issue a demand notice under the IBC, 2016.

The Applicant followed due process by filing the application, serving copies to the Corporate Debtor, and affirming no dispute regarding the unpaid operational debt. The Tribunal found the application complete and admitted it as the Corporate Debtor did not contest the claim or file a reply. The default in payment was established, and no settlement was reached despite a request for deferment. Consequently, the Tribunal admitted the application under section 9(5) of the IBC, 2016.

In terms of appointment, Mr. Anil Rustgi was proposed as the Insolvency Resolution Professional, subject to certain conditions. The Operational Creditor was directed to deposit ?2 lakhs with the Interim Resolution Professional to cover expenses. The moratorium under Section 14(1) of the Code was imposed on the Corporate Debtor, with specific provisions coming into force during this period. The order was to be communicated to all relevant parties, including the IRP, and compliance reports were to be sent to the Registrar, NCLT, and ROC for updating Master Data.