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2020 (3) TMI 1474 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of Corporate Insolvency Resolution Process (CIRP) - Corporate Debtor defaulted in payment of transport services - Operational creditor - HELD THAT - The Debt and Default in question, are admittedly not in dispute, and the Respondent also admits the Debt and default as per counter as mentioned supra. The instant Petition is filed strictly in accordance with the extant provisions of the Code, and also suggested a qualified Resolution Professional namely Mr. Hari Babu Thota, who has filed his written Consent in Form -2 on 28.08.2019 by inter alia declaring that no disciplinary proceedings pending against him with the Board or ICSI Insolvency Professionals Agency. Therefore he is provisionally eligible to be appointed as IRP. Hence, the Instant Company Petition is fit case to admit by initiating CIRP appointing by IRP, and declaring moratorium etc., in respect of the Corporate Debtor. The petition is admitted - IRP appointed - moratorium declared.
Issues involved:
The issues involved in the judgment are the initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016, by an Operational Creditor against a Corporate Debtor for default in payment for transport services. Summary: Issue 1: Debt and Default Allegations The Petitioner, an Operational Creditor, filed a petition under Section 9 of the IBC, 2016, seeking to initiate CIRP against the Respondent, a Corporate Debtor, for defaulting on payment of Rs.34,00,347 for transport services as per the Transport Services Agreement. The Respondent acknowledged the debt but raised issues regarding its financial difficulties and inability to make payments. Issue 2: Arguments and Counter-Arguments The Respondent contended that it had a good business relationship with the Petitioner for over 5 years but faced financial challenges leading to a significant drop in revenue. The Respondent argued that the Operational Creditor would not receive any amount as per Section 53 of the IBC, 2016, if the application was admitted. The Respondent also claimed that the Operational Creditor was misusing the provisions of the Code for recovery purposes. Issue 3: Adjudication and Decision After hearing the arguments, the Adjudicating Authority found that the debt and default were not in dispute. The Petitioner had followed the provisions of the Code and suggested a qualified Resolution Professional for the case. Therefore, the Authority admitted the petition, initiated CIRP, and appointed an Interim Resolution Professional. A moratorium was declared, prohibiting certain actions against the Corporate Debtor, and the IRP was directed to comply with all relevant provisions and file progress reports periodically. Conclusion The judgment involved the admission of a petition for CIRP against a Corporate Debtor based on default in payment for transport services. Despite the Respondent's financial difficulties, the Adjudicating Authority found the petition admissible and appointed an IRP to oversee the resolution process.
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