2021 (11) TMI 757 - Tri - Insolvency and Bankruptcy

Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT - The records revealed that inspite of the Corporate Debtor falling due to the Operational Creditor, he failed to make any payment. He did not even respond to the Demand Notice. The Copy of the Demand Notice delivered by the Operational Creditor to the Corporate Debtor is on record. The Affidavit filed by the Operational Creditor shows that no reply is given by the Corporate Debtor relating to the dispute of the unpaid operational debt. The Copy of the financial statement furnished by the financial institutions is also filed. Hence, this Application is found to be complete. The petition is admitted - moratorium declared.

Summary

Issues:
Initiation of Corporate Insolvency Resolution Process (CIRP) against Corporate Debtor for default in payment.

Analysis:
The Operational Creditor filed a petition under section 9 of the Insolvency and Bankruptcy Code seeking initiation of CIRP against the Corporate Debtor for defaulting on a payment of ?95,00,000 for goods supplied. The Operational Creditor had previously obtained a decree against the Corporate Debtor in a suit filed for non-payment. Despite issuing a Demand Notice under the IBC, the Corporate Debtor did not respond, indicating admission of the debt. The Corporate Debtor failed to make any payment or dispute the debt, leading to the Operational Creditor approaching the Tribunal.

The Ministry of Corporate Affairs' website revealed the Corporate Debtor's failure to file financial statements. The Corporate Debtor did not appear before the Tribunal, resulting in an ex parte order against them. The Tribunal found the Operational Creditor's petition complete, with evidence of non-payment and lack of response from the Corporate Debtor. Therefore, the Tribunal deemed it appropriate to admit the petition and initiate CIRP against the Corporate Debtor. Mr. Srinivas Gudla Rao was appointed as the Interim Resolution Professional.

The Tribunal ordered the commencement of the Corporate Insolvency Resolution Process, directing the Interim Resolution Professional to take charge of the Corporate Debtor's management and proceed with the CIRP as per the relevant sections of the Code and Rules. A moratorium was declared on the Corporate Debtor, and the Directors, Promoters, and other associated persons were instructed to cooperate with the IRP. The Registry was tasked with communicating the order to the parties involved for compliance.

In conclusion, the Tribunal admitted the Company Petition ex parte, initiating the Corporate Insolvency Resolution Process against the Corporate Debtor, with specific directions for the Interim Resolution Professional and other stakeholders to facilitate the resolution process effectively.