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2021 (10) TMI 850 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operator Creditors - existence of debt and dispute or not - issuance of demand notice - HELD THAT - It is seen that CD in reply to the demand notice has not raised any dispute to the outstanding dues to OC and has rather admitted that on 30.03.19, it was communicated to the OC that due to financial difficulties payment could not be made by CD. It is further reiterated that the CD vide reply to the petition dated 06.02.20 has acknowledged that there is existence of commercial arrangement and on 30.03.19, payment of ₹ 1,00,000 was released against the outstanding. 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 the 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:
Petition seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Corporate Debtor (CD) for alleged default in payment of professional services. Analysis: 1. The Operational Creditor (OC) filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) against the CD for defaulting on a payment of ?4,00,000 towards professional services for an online test project. The CD acknowledged receiving an invoice of ?5,00,000 and made a partial payment of ?1,00,000 but failed to clear the remaining outstanding amount, leading to the initiation of the CIRP process. 2. The CD denied any outstanding dues to the OC, claiming to have paid ?1,00,000 and requesting time for the balance payment. However, the CD did not dispute the principal amount owed to the OC or mention any preexisting dispute between the parties, strengthening the OC's claim for initiating CIRP. 3. The Tribunal examined the case records and noted that the CD did not raise any dispute regarding the outstanding dues in response to the demand notice. The CD admitted facing financial difficulties in making the payment, further supporting the OC's claim of default by the CD. 4. Referring to Sections 8 and 9 of the IBC, the Tribunal emphasized the procedural requirements for filing a petition by an Operational Creditor, including issuing a demand notice and subsequent application for initiating CIRP. The OC in this case fulfilled these requirements by providing evidence of the debt and default by the CD. 5. Considering the facts presented, the Tribunal found that the OC had sufficiently established the existence of debt and default by the CD. Therefore, the application for initiating CIRP was deemed admissible, leading to the appointment of an Interim Resolution Professional (IRP) to oversee the resolution process. 6. The Tribunal directed the IRP to comply with the statutory obligations under the IBC, including filing reports and managing the affairs of the CD. Additionally, a moratorium was declared under Section 14 of the IBC, imposing restrictions on legal actions against the CD and asset transactions during the resolution process. 7. The IRP was instructed to ensure continuity of essential goods or services to the CD and to manage its affairs diligently. The OC was required to deposit a fee for the IRP's expenses, which would be reimbursed by the Committee of Creditors (CoC) as part of the CIRP costs. 8. The Registry was directed to disseminate the order to the relevant parties promptly. These comprehensive measures aimed to facilitate a smooth and effective Corporate Insolvency Resolution Process for the benefit of all stakeholders involved.
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