2022 (9) TMI 1126 - 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 - reply to the main Company Petition not given, despite giving opportunities to file reply in the matter - time limitation - HELD THAT - The Last date of invoice is 23.12.2019 and the date of filing is 06.04.2021 and it is well within the Limitation. This Bench has jurisdiction to deal with this Company Petition. The Petition made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC, as per the date of filing of this petition. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority hereby admits this Petition and orders initiation of CIRP against the Corporate Debtor. Petition admitted - moratorium declared.

Issues:
1. Jurisdiction of the Tribunal to hear the Company Petition under section 9 of the Insolvency & Bankruptcy Code, 2016.
2. Default in payment by the Corporate Debtor and admission of liability.
3. Admission of the Company Petition and initiation of Corporate Insolvency Resolution Process (CIRP).
4. Appointment of Interim Resolution Professional (IRP) and management of the Corporate Debtor during CIRP.

Jurisdiction of the Tribunal:
The Company Petition was filed under section 9 of the Insolvency & Bankruptcy Code, 2016 by the Operational Creditor against the Corporate Debtor, citing a default in payment. The Corporate Debtor, a private company incorporated under the Companies Act, 2013, did not dispute the jurisdiction of the Tribunal. The Tribunal found that the petition was within the limitation period, and as the Corporate Debtor's registered office was within the jurisdiction of the Bench, it had the authority to adjudicate the matter.

Default and Admission of Liability:
The Operational Creditor alleged that the Corporate Debtor failed to make a payment of a substantial sum, leading to a default as of 24.12.2019. The Corporate Debtor, through its counsel, admitted its inability to pay the debts and chose not to file a reply to the petition. The Tribunal noted an email from the Corporate Debtor acknowledging the liability, along with the date of default. This admission of liability and default established the Corporate Debtor's failure to meet its financial obligations.

Admission of Company Petition and CIRP Initiation:
After considering the arguments and evidence presented, the Tribunal concluded that the Operational Creditor's petition met all legal requirements. The default amount exceeded the minimum stipulated under the IBC, and the Corporate Debtor's admission of liability further supported the petition. Consequently, the Tribunal admitted the Company Petition and ordered the initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor.

Appointment of IRP and Management during CIRP:
The Tribunal approved the appointment of Mr. Sandeep Jawaharlal Singhlal as the Interim Resolution Professional (IRP) for conducting the CIRP. The IRP was tasked with specific functions as per the IBC, and the management of the Corporate Debtor was to vest in the IRP during the CIRP period. Additionally, the Operational Creditor was directed to deposit a specified sum with the IRP for expenses related to issuing public notices and inviting claims. The Tribunal issued various directives regarding communication of the order, compliance reporting, and management responsibilities during the CIRP.

This detailed analysis of the Tribunal's judgment covers the issues of jurisdiction, default, admission of the Company Petition, and the appointment of an IRP comprehensively, outlining the legal reasoning and outcomes of each aspect of the case.

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