2018 (9) TMI 943 - Tri - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process - evidence of existence of dispute - Held that - The cheque issued by the respondent were not credited in the account of the applicant. The corporate debtor did not make payment after receiving the demand notice u/s 8 (1) of IB Code and default on the side of the respondent stand proved in this case. The petitioner is therefore found entitled to initiate corporate insolvency resolution process as against the Respondent. Also matter of record that Operational Debt owed by Corporate Debtor is of more than One lakh Rupees. The Corporate Debtor failed to file any reply or raise any dispute within ten days from the date of receipt of Demand Notice, as mandated under section 8 (2)(a) of the Code. There is no evidence of existence of dispute between Operational Creditor and Corporate debtor regarding outstanding debt. Petitioner, in this case, has complied with section 9 (3) (b) and 9(3)(c), and affidavit to the effect that there is no notice given by the corporate debtor relating to dispute has been filed. As the petitioner fulfils the required criterion for invoking CIRP under Section 9 of the Code, thus petition is liable to be admitted. The Operational Creditor had not received the outstanding Debt from the Corporate Debtor, and the requirements as prescribed under I&B Code have been completed by the Petitioner. Thus we are of the view that this Petition deserves Admission . Petition filed by petitioner U/S. 9 of the I&B Code is admitted.

Summary

Issues:
1. Initiation of Corporate Insolvency Resolution Process under Section 9 of Insolvency and Bankruptcy Code, 2016 against a Corporate Debtor.
2. Outstanding debt owed by the Corporate Debtor to the Operational Creditor.
3. Compliance with statutory provisions under the I&B Code for initiating Corporate Insolvency Resolution Process.
4. Appointment of Interim Resolution Professional (IRP) and declaration of moratorium under Section 14 of the Code.

Analysis:
1. The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by the Operational Creditor, M/s Butterfly Appliances, against the Corporate Debtor, M/s SRK Kitchen Appliances Pvt. Ltd., for the initiation of Corporate Insolvency Resolution Process. The Corporate Debtor failed to clear the outstanding dues of Rs. 16,42,032, even after receiving a demand notice and subsequent reminders. The Tribunal proceeded ex-parte as the Corporate Debtor did not respond to the notice.

2. The Operational Creditor provided evidence of the outstanding debt, including invoices, demand notices, and bank statements, totaling Rs. 30,91,993. The Corporate Debtor did not dispute the debt or make any payments after receiving the demand notice, establishing default on their part. The Tribunal found the Operational Creditor entitled to initiate the insolvency resolution process against the Corporate Debtor.

3. The Operational Creditor complied with the statutory requirements of Section 9(3)(b) and 9(3)(c) by submitting an affidavit stating the absence of a notice of dispute from the Corporate Debtor and providing necessary documents. The Tribunal noted the fulfillment of the criteria for invoking Corporate Insolvency Resolution Process under Section 9 of the Code, leading to the admission of the petition.

4. The Tribunal admitted the petition under Section 9 of the I&B Code and appointed an Interim Resolution Professional (IRP) to oversee the resolution process. A moratorium was declared under Section 14 of the Code, prohibiting legal actions against the Corporate Debtor and safeguarding its assets during the insolvency resolution process. The IRP was directed to initiate the Corporate Insolvency Resolution Process promptly and communicate the order to all relevant parties.

This detailed analysis covers the key issues addressed in the judgment, including the initiation of insolvency proceedings, outstanding debt, compliance with statutory provisions, and the procedural aspects of appointing an IRP and declaring a moratorium.