2022 (5) TMI 15 - 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 - It is seen from the records that notice of default under Section 8 has been delivered and an affidavit under Section 9(3)(b) of IBC has also been filed - On perusal of records, it is found that a clear case of the default has been made out by the Applicant and the present application under Section 9 IBC needs to be admitted. Application admitted - moratorium declared.

Issues:
1. Default in payment for invoices under Section 9 of IBC, 2016.
2. Admission of default by the Corporate Debtor.
3. Appointment of Insolvency Resolution Professional.
4. Declaration of moratorium and its implications.
5. Compliance and cooperation requirements for the IRP and related parties.

Analysis:
1. The case pertains to an Operational Creditor's claim under Section 9 of IBC, 2016, regarding non-payment by the Corporate Debtor for six transactions involving Crude Palm Oil. While payments for three invoices were made, the remaining three invoices totaling Rs. 39,88,27,536/- were outstanding, leading to a demand notice under Section 8 of IBC, 2016.

2. The Corporate Debtor admitted the default in response to the Section 8 notice and expressed intent to make payments once funds are available. The Tribunal noted that a substantial part payment had been made by the Corporate Debtor, but the debt remained due and payable both factually and legally, justifying the Applicant's claim.

3. Following a review of submissions and records, the Tribunal found a clear case of default by the Corporate Debtor, leading to the admission of the application under Section 9 of IBC. An Insolvency Resolution Professional (IRP) was appointed, and the Corporate Debtor's management was handed over to the IRP, initiating the Corporate Insolvency Resolution Process (CIRP).

4. A moratorium was declared from the date of the order until the completion of CIRP, prohibiting various actions against the Corporate Debtor, including legal proceedings, asset transfers, and enforcement of security interests. Essential goods or services supply to the Corporate Debtor was safeguarded during the moratorium period.

5. The IRP was directed to comply with specific provisions of the Code, and the Corporate Debtor's directors and associated parties were instructed to provide necessary assistance to the IRP. The Operational Creditor was tasked with notifying the IRP promptly, and the Registry was mandated to update the Corporate Debtor's status for public information and compliance monitoring.

In conclusion, the Tribunal's judgment upheld the Operational Creditor's claim, admitted the Section 9 application, appointed an IRP, implemented a moratorium, and outlined compliance and cooperation requirements for the involved parties to facilitate the Corporate Insolvency Resolution Process effectively.

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