2022 (4) TMI 73 - 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 Corporate Debtor has not brought to light any pre-existing dispute while replying to the demand notice as required under the Code - The amount outstanding is above ₹ 1 lakh and since the present petition was filed before the amendment increasing threshold limit, the present petition is in compliance with section 4(1). The application made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount stipulated under section 4(1) of the IBC. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Petition admitted - moratorium declared.

Issues:
1. Jurisdiction of the National Company Law Tribunal
2. Default in payment by the Corporate Debtor
3. Appointment of Interim Resolution Professional (IRP)
4. Moratorium under section 14 of the Insolvency and Bankruptcy Code
5. Direction to the Operational Creditor for depositing funds with the IRP

Jurisdiction of the National Company Law Tribunal:
The Tribunal examined the jurisdictional issue raised by the Respondent regarding the location of the Corporate Debtor's registered office. It was established that the registered office of the Corporate Debtor, as per Ministry of Corporate Affairs records, was in Pune. Referring to the provisions of the Insolvency and Bankruptcy Code, the Tribunal concluded that it had the jurisdiction to entertain the application, as the Adjudicating Authority under the Code includes the National Company Law Tribunal. Therefore, the objection raised by the Respondent on jurisdiction was dismissed.

Default in Payment by the Corporate Debtor:
The Operational Creditor filed a petition seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor due to non-payment of outstanding dues. The Tribunal noted that the Corporate Debtor did not dispute the outstanding amount or the interest claimed by the Operational Creditor. Additionally, it was highlighted that the Corporate Debtor failed to raise any pre-existing dispute while replying to the demand notice, as required under the Insolvency and Bankruptcy Code. Consequently, the Tribunal found that the default amount exceeded the minimum stipulated under the Code, leading to the admission of the petition and initiation of CIRP against the Corporate Debtor.

Appointment of Interim Resolution Professional (IRP):
The Tribunal addressed the appointment of an Interim Resolution Professional (IRP) for the Corporate Debtor. While the Operational Creditor proposed a specific individual for the role, it was discovered that the proposed candidate did not possess a valid Authorization for Assignment. Consequently, the Tribunal appointed a different individual, Mr. Balaji Prithviraj Singh, as the IRP to carry out the necessary functions under the Insolvency and Bankruptcy Code. The IRP was directed to comply with the regulations and guidelines issued by the Insolvency and Bankruptcy Board of India.

Moratorium under Section 14 of the Insolvency and Bankruptcy Code:
Upon admitting the petition and initiating the CIRP against the Corporate Debtor, the Tribunal declared a moratorium under section 14 of the Insolvency and Bankruptcy Code. The moratorium encompassed various actions, including the institution of suits, transferring of assets, and recovery of property. Exceptions were outlined for the supply of essential goods or services during the moratorium period. The moratorium was to remain in effect until the completion of the CIRP or until specific resolutions were approved.

Direction to the Operational Creditor for Depositing Funds with the IRP:
As part of the resolution process, the Tribunal directed the Operational Creditor to deposit a specified sum with the appointed IRP. This fund was intended to cover expenses related to issuing public notices and inviting claims, subject to approval by the Committee of Creditors. The Operational Creditor was mandated to make this deposit to facilitate the initial stages of the Corporate Insolvency Resolution Process.

This detailed analysis of the judgment from the National Company Law Tribunal, Mumbai Bench, covers the various issues addressed in the case, including jurisdictional matters, default in payment, appointment of an IRP, the imposition of a moratorium, and specific directions issued to the parties involved in the insolvency resolution process.

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