2022 (8) TMI 653 - 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 4 dated 29.10.2019 was properly served? - HELD THAT - The demand notice was received as per tracking report mentioned at Annexure-F of the main petition. In view of the same, it is held that the demand notice has been duly served. However, no reply was filed to the demand notice. Whether the operational debt was disputed by the corporate debtor? - HELD THAT - It is pleaded by the petitioner that there is no dispute of unpaid operational debt pending between the parties in any court of law or any other authority. The same has been inferred from the affidavit in terms of Section 9(3)(b) of I B Code, 2016. The affidavit is attached with the main petition. It implies that there is no pre-existing dispute in relation to the debt claimed as per Part IV of Form 5. Moreover, the corporate debtor in its reply stated that the amount claimed is not denied and the company is unable to pay any of the amount due and the corporate debtor has become financially unviable. Therefore it is evident from above that the present petition is of admitted liability. Whether this application is filed within limitation? - HELD THAT - A demand notice issued dated 29.10.2019 in Form 4 attached as Annexure-F was duly served on the corporate debtor through speed post. It is observed that neither any reply from the corporate debtor has been filed in lieu of the above stated demand notice nor any payment has been made. Therefore, the period of limitation would begin from the date of default i.e. 16.05.2019. This application was filed on 01.10.2019 vide Diary No. 5283. Therefore, this Adjudicating Authority finds that this application is filed within limitation. 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 for initiation of the CIR Process in the case of the Corporate Debtor, SNS Laboratories Limited, is admitted - petition admitted - moratorium declared.

Summary

Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Validity of demand notice and service.
3. Dispute of operational debt by the corporate debtor.
4. Filing of application within the limitation period.

Analysis:

Initiation of CIRP under Section 9:
The petition was filed by the Operational Creditor seeking to initiate CIRP against the Corporate Debtor for an unpaid operational debt. The Corporate Debtor did not dispute the debt, acknowledging the financial inability to pay. The petition provided details of the debt, including the amount and interest claimed, along with supporting documents such as ledger statements and balance sheets. The Tribunal found the petition complete and admitted it for further proceedings.

Validity of Demand Notice and Service:
The Tribunal examined the service of the demand notice issued by the Operational Creditor to the Corporate Debtor. It was established that the demand notice was properly served as per the tracking report, and no reply was received from the Corporate Debtor. Therefore, the demand notice was deemed to have been duly served.

Dispute of Operational Debt:
The Corporate Debtor did not dispute the operational debt claimed by the Operational Creditor. The affidavit submitted by the petitioner and the reply from the Corporate Debtor indicated an admitted liability, with the Corporate Debtor stating its financial unviability and inability to pay the claimed amount. This lack of dispute confirmed the existence of an admitted liability.

Filing within Limitation Period:
The petition was filed within the limitation period, as the demand notice was served on the Corporate Debtor, and no reply or payment was made. The Tribunal noted that the application was filed within the statutory time frame from the date of default, ensuring compliance with the limitation requirement.

Conclusion:
The Tribunal, after considering all aspects of the case, admitted the petition for initiation of CIRP against the Corporate Debtor. A moratorium was declared, and an Interim Resolution Professional was appointed to manage the affairs of the Corporate Debtor during the insolvency resolution process. The Tribunal directed cooperation from all parties involved and set guidelines for the Interim Resolution Professional to follow, ensuring a smooth resolution process. The petitioner was also directed to deposit an amount for immediate expenses related to the CIRP, which would be reimbursed by the Committee of Creditors.