2022 (6) TMI 779 - 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 service not received and publication has been done to that effect. Whether the operational debt was disputed by the corporate debtor? - HELD THAT - It is to be noted that none appeared on behalf of corporate debtor despite repeated service and is set ex parte vide order dated 22.12.2021. Whether this application is filed within limitation? - HELD THAT - This application was filed on 15.11.2019 vide Diary No. 6358. Therefore, this Adjudicating Authority finds that this application was filed within limitation. On going through the contents of the application filed in the Form 5, the same is found to be complete. There is a total unpaid operational debt (in default) of ₹ 8,83,275(Principal Amount). The operational creditor has supplied goods to the corporate debtor and raised invoices attached as Annexure A-4. Ledger accounts maintained by the operational creditor have been attached at Annexure A-4. Accordingly, the petitioner proved the debt and the default, which is more than Rupees one lakh (prior to the amendment in threshold limit of one crore vide notification No. S.O.1205(E) dated 24.03.2020) by the respondent-corporate debtor. It is noted that the corporate debtor has failed to make payment of the aforesaid amount due as mentioned in the statutory notice till date. Thus, the conditions under Section 9 of the Code stand satisfied. It is evident that from the abovementioned facts that the liability of the corporate debtor is undisputed. Accordingly, the petitioner proved the debt and the default, which is above threshold limit - all the aforesaid requirements have been satisfied. It is seen that the petition preferred by petitioner is complete in all respect. The material on record clearly goes to show that the respondent committed default in payment of the claimed operational debt even after demand made by the petitioner. Petition admitted - moratorium declared.

Summary

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

Analysis:

1. Proper service of demand notice:
The Tribunal noted that a demand notice in Form 3 dated 29.07.2019 was issued to the operational creditor, but the service was not received. Despite publication in newspapers, the corporate debtor did not appear, leading to being set ex parte. The Tribunal considered this issue and proceeded with the case.

2. Disputed operational debt by the corporate debtor:
The corporate debtor failed to appear despite repeated service attempts, resulting in being set ex parte. The Tribunal found that the operational debt was not disputed by the corporate debtor, as evidenced by their absence during the proceedings.

3. Filing of application within limitation:
The application under Section 9 of the Insolvency and Bankruptcy Code was filed on 15.11.2019, well within the limitation period. The Adjudicating Authority confirmed that the application was filed within the prescribed time frame, meeting the requirements of the Code.

Furthermore, the Tribunal reviewed the complete application filed in Form 5, which detailed the unpaid operational debt and default amount. The petitioner provided evidence of supplying goods to the corporate debtor and raised invoices, establishing the debt. The Tribunal found the liability of the corporate debtor to be undisputed and admitted the petition for initiation of the Corporate Insolvency Resolution Process. The Tribunal declared a moratorium, appointed an Interim Resolution Professional, and issued specific directions regarding the management of the affairs of the Corporate Debtor during the process. The petitioner was directed to deposit a certain amount with the Interim Resolution Professional for immediate expenses related to the Corporate Insolvency Resolution Process. The Tribunal ensured communication of the order to both parties and directed the petitioner to provide a copy to the Interim Resolution Professional promptly.