2022 (11) TMI 505 - Tri - Insolvency and Bankruptcy

Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Time limitation - HELD THAT - It is evident that the debt is due and payable and default has occurred. The present application is admitted, in terms of section 9(5) of IBC, 2016. Application admitted - moratorium declared.

Summary

Issues:
1. Application filed under Section 9 of Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP).
2. Dispute regarding unpaid invoices for the supply of Kraft Papers by the applicant to the corporate debtor.
3. Objections raised by the corporate debtor against the application.
4. Jurisdiction of the Tribunal to entertain the application.

Analysis:
1. The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process against the corporate debtor due to unpaid invoices for the supply of Kraft Papers. The applicant provided detailed information about the outstanding amount and the failure of the corporate debtor to make payments despite reminders and demand notices.

2. The corporate debtor raised objections, including the absence of delivery challans for the invoices, different causes of action for each default, and the nature of a balance confirmation letter. However, the Tribunal found that the invoices submitted by the applicant contained signatures and seals of the corporate debtor, indicating the delivery of goods. The objections raised by the corporate debtor were deemed unsustainable as the total debt and default were not contested.

3. The Tribunal addressed each objection raised by the corporate debtor, emphasizing the validity of the documents presented and the acknowledgment of debt based on routine verification procedures. The Tribunal concluded that the debt was due and payable, and a default had occurred, leading to the admission of the application under Section 9(5) of the IBC, 2016.

4. Jurisdictional issues were also considered, and it was confirmed that the Tribunal had the authority to entertain and try the application due to the location of the corporate debtor's registered office in Rajkot, Gujarat State. The Tribunal appointed an Interim Resolution Professional and directed the Operational Creditor to deposit a sum for expenses. Additionally, the moratorium period under Section 14(1) of the Code was imposed, prohibiting certain actions related to the corporate debtor during this period.

Overall, the Tribunal admitted the application, appointed the Interim Resolution Professional, and imposed necessary directives regarding the deposit of funds and the moratorium period, ensuring compliance with the provisions of the Insolvency and Bankruptcy Code, 2016.