2022 (10) TMI 61 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational creditors - existence of debta nd dispute or not - time limitation - service of demand notice - whether the demand notice dated 24.04.2019 was properly served? - HELD THAT - The demand notice sent at registered address of the respondent/corporate debtor as available on the master data of the corporate debtor was not served and was returned with the remarks insufficient address . Thus, vide order dated 04.10.2019 passed by this Bench, it was observed that since the petitioner sent the demand notice to the address of the corporate debtor as available in the master data, the same is treated as a proper service on the respondent-corporate debtor. Whether the operational debt was disputed by the corporate debtor? - HELD THAT - The petitioner/operational creditor has filed an affidavit under Section 9(3)(b) of the Code, wherein it has been deposed that it has not received any reply to the demand notice dated 24.04.2019 and that it has not been served upon with any notice by the corporate debtor about any dispute in terms of Section 8(2) of the Code. Whether this application was filed within limitation? - HELD THAT - A perusal of the case file shows that the application was filed vide Diary No.3619 dated 24.07.2019, whereas the date of default is 11.02.2017, therefore, this Adjudicating Authority finds that this application has been filed within limitation. 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. Proper service of demand notice.
2. Dispute of operational debt by the corporate debtor.
3. Application filed within limitation.
4. Completeness of the application.
5. Satisfaction of conditions under Section 9 of the Insolvency and Bankruptcy Code, 2016.
6. Appointment and directions for the Interim Resolution Professional (IRP).
7. Declaration of moratorium.

Issue-wise Detailed Analysis:

1. Proper Service of Demand Notice:
The first issue for consideration was whether the demand notice dated 24.04.2019 was properly served. The demand notice sent to the registered address of the corporate debtor was returned with remarks 'insufficient address'. However, the notice sent to the Thiruvananthapuram office was served. The Tribunal observed that since the petitioner sent the demand notice to the address available in the master data, it was treated as proper service on the respondent-corporate debtor.

2. Dispute of Operational Debt by the Corporate Debtor:
The next issue was whether the operational debt was disputed by the corporate debtor. The petitioner filed an affidavit under Section 9(3)(b) of the Code, stating that no reply was received to the demand notice, and no notice of dispute was served by the corporate debtor in terms of Section 8(2) of the Code. Hence, it was concluded that the operational debt was not disputed by the corporate debtor.

3. Application Filed Within Limitation:
The Tribunal examined whether the application was filed within the limitation period. The application was filed on 24.07.2019, while the date of default was 11.02.2017. The Tribunal found that the application was filed within the limitation period.

4. Completeness of the Application:
The Tribunal reviewed the contents of the application filed in Form 5 and found it to be complete. The petitioner provided details of the debt due, including ledger account statements and invoices, establishing the debt and default, which was above the threshold limit of Rupees one lakh (pre-revised).

5. Satisfaction of Conditions under Section 9 of the Code:
The Tribunal noted that the corporate debtor failed to make the payment of the claimed amount even after the demand was made. The conditions under Section 9 of the Code were satisfied, and the liability of the corporate debtor was undisputed and established. The petition was thus admitted for initiating the Corporate Insolvency Resolution Process (CIRP).

6. Appointment and Directions for the Interim Resolution Professional (IRP):
Mr. Ashok Kumar Jain was proposed as the Interim Resolution Professional (IRP) by the petitioner. The Tribunal appointed him and directed him to act in accordance with the provisions of the Code. The IRP was instructed to take control of the corporate debtor's assets, make a public announcement, and constitute a Committee of Creditors. The IRP was also directed to send regular progress reports to the Tribunal.

7. Declaration of Moratorium:
The Tribunal declared a moratorium in terms of Section 14 of the Code, which included:
- Suspension of suits or proceedings against the corporate debtor.
- Prohibition on transferring or disposing of the corporate debtor's assets.
- Suspension of actions to recover or enforce security interests.
- Continuation of essential goods or services to the corporate debtor.

The moratorium was to remain effective until the completion of the CIRP or approval of the resolution plan or liquidation order.

Conclusion:
The petition was allowed and admitted, and the Tribunal directed the petitioner to deposit an amount of Rs. 50,000 with the IRP to meet immediate CIRP expenses. The Tribunal also ordered communication of the order to both parties and the IRP.

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