2022 (7) TMI 94 - 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 petitioner has placed a tracking report, whereunder it was stated that the speed post was delivered to the corporate debtor. Whether the operational debt was disputed by the corporate debtor? - HELD THAT - It is to be noted that respondent-corporate debtor in its reply has admitted its liability and also the inability to pay the said debt. Moreover, petitioner has appended affidavit u/s. 9(3)(b) stating that corporate debtor has not issued any notice or raised any dispute regarding the debt for which the present petition has been filed by the operational creditor. Whether this application is filed within limitation? - HELD THAT - This application was filed on 15.11.2019 vide Diary No. 6370. Whereas the due date is a day prior to the date of default i.e. 02.09.2019. Therefore, this Adjudicating Authority finds that this application has been filed within limitation. As noted in paragraph above this liability of debt is admitted by the respondent-corporate debtor. In the present petition all the requirements have been satisfied. It is seen that the petition preferred by the petitioner is complete in all respects. 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:
1. Validity of demand notice service
2. Disputed operational debt by the corporate debtor
3. Timeliness of the application

Issue 1: Validity of Demand Notice Service
The petitioner filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the respondent, a company named Crest Steel UNA Private Limited. The petitioner claimed an amount in default of Rs. 1,52,47,560/- with interest. The first issue addressed was the proper service of the demand notice in Form 3 dated 30.10.2019. The petitioner provided a tracking report indicating that the speed post was delivered to the corporate debtor, establishing the service of the notice.

Issue 2: Disputed Operational Debt
The next issue examined was whether the operational debt was disputed by the corporate debtor. The respondent admitted its liability and inability to pay the debt in its reply. The petitioner also submitted an affidavit stating that the corporate debtor did not raise any dispute regarding the debt. This admission of liability and lack of dispute supported the petitioner's claim for initiating the CIRP.

Issue 3: Timeliness of the Application
Another issue considered was the timeliness of the application. The petition was filed on 15.11.2019, within the limitation period, as the due date of the debt was 02.09.2019. The Adjudicating Authority found the application to be within the prescribed time limit. Additionally, since the respondent admitted the debt and default, the application was deemed timely and valid.

The Tribunal reviewed the complete petition, confirming the unpaid operational debt amount and interest. The corporate debtor failed to make the payment mentioned in the statutory notice, meeting the conditions under Section 9 of the Code. The liability of the corporate debtor was admitted and undisputed, satisfying the threshold for initiating the CIRP. Consequently, the petition was admitted, and a moratorium was imposed, appointing an Interim Resolution Professional. The order of moratorium would remain in effect until the completion of the insolvency resolution process or liquidation of the corporate debtor. The appointed professional was directed to manage the affairs of the corporate debtor, prepare asset inventories, and follow all legal and ethical guidelines.

Furthermore, the Interim Resolution Professional was instructed to make a public announcement, constitute a Committee of Creditors, and submit progress reports regularly. The petitioner was required to deposit a specified amount with the Interim Resolution Professional for immediate CIRP expenses. The Tribunal directed communication of the order to both parties and the appointed professional promptly. The detailed directions aimed at ensuring a structured and transparent resolution process for the corporate debtor's financial obligations.