2022 (7) TMI 97 - 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 - whether the demand notice in Form 3 dated 05.10.2019 was properly served? - HELD THAT - The petitioner has placed a tracking report, whereunder it was stated that the registered 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 respondentcorporate debtor in its reply has admitted that its liability and inability to pay the 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 09.12.2019 vide Diary No.6959 Whereas the date of default is 14.12.2016, therefore, this Adjudicating Authority finds that this application has been filed within limitation. Apart liability of debt is admitted by respondent-corporate debtor. In the present petition all the aforesaid 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. In view of the satisfaction of the conditions provided for in Section 9(5)(i) of the Code, the petition is admitted - moratorium declared.

Issues Involved:
1. Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process (CIRP) initiation.
2. Proper service of demand notice and acknowledgment by the Corporate Debtor.
3. Dispute over operational debt by the Corporate Debtor.
4. Timeliness of the application filing within limitation period.
5. Admission of liability by the Corporate Debtor.
6. Completeness of the application and proof of debt and default.
7. Satisfaction of conditions under Section 9(5)(i) of the Code for CIRP initiation.
8. Appointment of Interim Resolution Professional and imposition of moratorium.
9. Directions for management and cooperation during the CIRP process.
10. Deposit requirement for immediate CIRP expenses.

Detailed Analysis:

1. The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by the Operational Creditor seeking the initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Beckons Industries Limited.

2. The first issue addressed was the proper service of the demand notice, which was confirmed through a tracking report indicating delivery to the Corporate Debtor.

3. The next concern was whether the operational debt was disputed by the Corporate Debtor. The Corporate Debtor, in its reply, admitted its liability and inability to pay the debt, while the Operational Creditor affirmed that no dispute was raised by the Corporate Debtor.

4. The timeliness of the application filing within the limitation period was reviewed, and it was found that the application was filed within the stipulated time frame, considering the date of default and application submission date.

5. The admission of liability by the Corporate Debtor was a significant factor in establishing the undisputed nature of the debt, as confirmed by the Operational Creditor's submission and the Corporate Debtor's reply.

6. The completeness of the application and the proof of debt and default were thoroughly examined, with details provided regarding the unpaid operational debt, invoices, and related documents.

7. The conditions under Section 9(5)(i) of the Code for CIRP initiation were found to be satisfied, leading to the admission of the petition for CIRP initiation against Beckons Industries Limited.

8. Following the decision to admit the petition, an Interim Resolution Professional was appointed, and a moratorium was imposed to safeguard the assets and operations of the Corporate Debtor during the resolution process.

9. Detailed directions were issued regarding the management and cooperation required during the CIRP process, including the responsibilities and powers vested in the Interim Resolution Professional.

10. Lastly, a directive was given for the Operational Creditor to deposit a specified amount with the Interim Resolution Professional to cover immediate CIRP expenses, which would be reimbursed by the Committee of Creditors.

This comprehensive analysis covers the key issues addressed in the legal judgment delivered by the National Company Law Tribunal, Chandigarh Bench.

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