2021 (11) TMI 183 - 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 - Service of demand notice - HELD THAT - The demand notice was sent to the registered address of the corporate debtor on 24.09.2020 and original postal receipt are found at Page No. 70 of Annexure P-5 (colly). As per tracking report for consignment number EP584068944IN, it is seen that notice was not delivered with the remark Dispatched to BO . As per tracking report for consignment number EP584068825IN, it is seen that the notice was delivered with the remark Item delivery confirmed on 01.10.2020. It is also observed that the petitioner has sent the demand notice vide email dated 24.09.2020 to the e-mail address provided by the corporate debtor in the company Master Data which has not bounced back. In view of the same, it is held that the demand notice has been duly served. Whether the operational debt was disputed by the corporate debtor? - HELD THAT - It is deposed by the operational creditor in their affidavit dated 16.11.2020 attached at Page Nos. 170-173 of the petition that the corporate debtor challenged the instant application on grounds of limitation. However, the respondent-corporate debtor has in their reply vide Diary No. 017781/1 dated 22.03.2021 submitted that corporate debtor is unable to pay the debt due to financial crisis. Their secured financial creditor i.e. Punjab National Bank has taken physical possession of manufacturing facility of the corporate debtor - there is no dispute as to the liability of the corporate debtor. It is observed that copy of bank statements has been attached as Annexure P-7 (colly) of the application and the specific entries showing payments being made to the operational creditor. Whether present application is filed within limitation? - HELD THAT - Since the last payment was made to the operational creditor by corporate debtor for ₹ 50,000/- (Annexure P-7 Colly) on 17.11.2017, the period of limitation would begin on 17.11.2017. The demand notice was served on 01.10.2020 (Page 72) of the present application was filed on 18.11.2020. Therefore, the petition is filed within limitation. It has been shown that the corporate debtor has failed to make payment of the aforesaid amount due as mentioned in the statutory notice till date. It is also observed that the conditions under Section 9 of the Code stand satisfied. Accordingly, the petitioner proved the debt and the default, which is more than ₹ 1 lakh by the respondent-corporate debtor. The present petition being complete and having established the default in payment of the Operational Debt for the default amount being above ₹ 1,00,000/-, the petition is admitted in terms of Section 9 of the IBC - moratorium declared.

Summary

Issues:
1. Proper service of demand notice
2. Disputed operational debt by the corporate debtor
3. Filing of the application within limitation

Analysis:
1. The Tribunal considered whether the demand notice was properly served. The notice was sent via post and email to the corporate debtor's registered address. Tracking reports showed successful delivery via post and no bounce-back of the email. Thus, the Tribunal held that the demand notice was duly served.

2. The next issue was whether the operational debt was disputed by the corporate debtor. The operational creditor claimed the debt was challenged on grounds of limitation. However, the corporate debtor admitted owing the money due to financial crisis and acknowledged a partial payment. Bank statements were provided as evidence, showing payments made to the operational creditor. The Tribunal found no dispute regarding the liability of the corporate debtor.

3. Another consideration was whether the application was filed within the limitation period. The last payment made by the corporate debtor was on 17.11.2017, and the application was filed on 18.11.2020, within the limitation period. The Tribunal confirmed the timely filing of the petition.

4. The Tribunal reviewed the application and found it complete, establishing the default in payment of the operational debt. The total unpaid debt was over ?1,00,000, with invoices and ledger accounts provided as evidence. The demand notice was sent and acknowledged, further supporting the operational creditor's claim. The conditions under Section 9 of the Insolvency and Bankruptcy Code were satisfied, leading to the admission of the petition.

5. Consequently, the petition was admitted under Section 9 of the IBC, and a moratorium was declared under Section 14 of the Code. Various prohibitions were imposed, including the institution of suits, disposal of assets, and recovery actions. The Tribunal appointed an Interim Resolution Professional (IRP) to handle the case and oversee the resolution process. The IRP was directed to follow the necessary steps mandated under the IBC.

6. The IRP was tasked with collating claims, constituting a Committee of Creditors, and submitting progress reports to the Tribunal. The Tribunal ensured communication of the order to all relevant parties and directed the petitioner's counsel to provide a copy to the IRP promptly. Additionally, the Registry was instructed to send a copy of the order to the IRP via email without delay.