2018 (4) TMI 1478 - Tri - Insolvency and Bankruptcy

Corporate insolvency process - Held that - Corporate Debtor has committed default and the amount of 3, 73, 612.43/- has remained unpaid. It is patent from a perusal of the reply affidavit given by the Corporate Debtor that it admits the liability which is due and payable to the Operational Creditor. Thus there is default committed on the part of the Corporate Debtor within the meaning of Section 3(12) read with Section 4 and Section 9(1) of the Code 2016. Even a copy of the certificate from the financial institution/bank maintaining accounts of the Operational Creditor has been filed to satisfy the requirement of Section 9(3)(c) of the Code. As a sequel to the above discussion this petition is admitted and Shri Atul Kumar Kansal is appointed as an Interim Resolution Professional.

Summary

Issues:
- Application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016
- Identification of Operational Creditor and Corporate Debtor
- Details of contracts and outstanding debts
- Submission of demand notice and subsequent actions
- Examination of invoices and services provided
- Admission of liability by the Corporate Debtor
- Appointment of Interim Resolution Professional
- Declaration of moratorium and its implications
- Duties and obligations of the Interim Resolution Professional

Analysis:
1. The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by an Operational Creditor against a Corporate Debtor. The Operational Creditor claimed to have provided services to the Corporate Debtor, resulting in an outstanding debt.

2. The Operational Creditor identified itself as a proprietorship firm engaged in the business of installation, erection, testing, and commission of electrical items. The Corporate Debtor, 'Tecpro Engineers Limited,' was incorporated on a specific date with its office address mentioned.

3. The Operational Creditor detailed two contracts with the Corporate Debtor for the provision of services at different sites, specifying the amounts owed by the Corporate Debtor. The Corporate Debtor admitted to the outstanding operational debt in its reply affidavit.

4. Despite repeated requests for payment and a demand notice, the Corporate Debtor failed to settle the outstanding amount. The Operational Creditor provided evidence of invoices, final demand notice, and bank statements to support its claim.

5. The Tribunal examined the definition of Operational Creditor and Operational Debt as per Sections 5(20) and 5(21) of the Code. It concluded that the Operational Creditor fulfilled the criteria and that the Corporate Debtor had defaulted on the payment.

6. The Corporate Debtor admitted its inability to pay the debt due to financial constraints, leading to the admission of the petition by the Tribunal. An Interim Resolution Professional was appointed to oversee the resolution process.

7. A moratorium was declared under Section 14 of the IBC, imposing restrictions on legal actions against the Corporate Debtor and asset transfers. The Interim Resolution Professional was tasked with specific duties outlined in various sections of the IBC.

8. The Tribunal emphasized the importance of cooperation from all parties involved in the resolution process and directed the Interim Resolution Professional to protect the Corporate Debtor's assets. The order was to be communicated to relevant parties promptly.

This comprehensive analysis covers the key issues addressed in the judgment, highlighting the legal proceedings and implications of the Tribunal's decision in the insolvency matter.