2019 (2) TMI 600 - Tri - Insolvency and Bankruptcy

Corporate insolvency process - unpaid operational debt - Held that - The Petitioner has annexed the demand notice sent to Corporate Debtor as per section 8 of Insolvency and Bankruptcy Code, 2016 and the same was received by the Corporate Debtor, the invoices against which it claims the outstanding amount from the Corporate Debtor as well as the bank certificate and Bank Statements to show that no payment is received from the Corporate Debtor in its bank account. The Corporate Debtor has not raised any dispute regarding the unpaid operational debt which is stated by the Petitioner on Affidavit and is also admitted by the Corporate Debtor. The application made by the Petitioner is complete in all respects as required by law and it clearly shows that the operational debt has not been paid as also confirmed by the Corporate Debtor. It is worth to mention that the Corporate Debtor had never attended the hearing. In totality of the facts and circumstances mentioned supra, we are of the view that the impugned Petition requires Admission . The Corporate Debtor having named the Interim Resolution Professional with his consent, there being no disciplinary proceedings against, this Bench hereby admits this petition filed under Section 9 of IBC, 2016, declaring moratorium with consequential directions

Summary

Issues:
- Company petition filed under section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) by an operational creditor against a corporate debtor for default in repayment.
- Admissibility of the petition based on the completeness of the application, delivery of notice for payment, absence of dispute, and non-receipt of payment.
- Decision on admitting the petition and declaring a moratorium under the IBC.
- Appointment of an Interim Resolution Professional and consequential directions.

Analysis:
1. Company Petition under Section 9 of IBC:
The case involved a petition filed by an operational creditor against a corporate debtor for defaulting on a repayment of a significant amount. The operational creditor had provided goods and services to the corporate debtor, leading to an outstanding debt of ?36,63,816.00. Despite repeated reminders and assurances from the corporate debtor, no payment was received, prompting the operational creditor to initiate insolvency proceedings under the IBC.

2. Admissibility of the Petition:
The Tribunal assessed the completeness of the application, the delivery of the notice for payment, absence of any dispute raised by the corporate debtor, and the non-receipt of payment. It was noted that the operational creditor had complied with all legal requirements, including sending a demand notice under Section 8 of the IBC, which was duly received by the corporate debtor. Additionally, the corporate debtor did not contest the unpaid operational debt, further confirming the default. As a result, the Tribunal found the petition to be complete and admissible.

3. Decision on Admitting the Petition and Declaring Moratorium:
After thorough examination of the facts and circumstances, the Tribunal concluded that the petition deserved admission. Consequently, a moratorium was declared, prohibiting various actions against the corporate debtor, ensuring the continuity of essential supplies, and appointing an Interim Resolution Professional to oversee the resolution process. The moratorium was to remain in effect until the completion of the resolution process or any subsequent liquidation order.

4. Appointment of Interim Resolution Professional and Consequential Directions:
In line with the admission of the petition, the Tribunal named an Interim Resolution Professional to manage the proceedings. Specific directions were issued to safeguard the assets of the corporate debtor, maintain essential services, and ensure compliance with the IBC provisions. The Tribunal also mandated the immediate public announcement of the insolvency resolution process.

In conclusion, the Tribunal admitted the company petition, declared a moratorium, appointed an Interim Resolution Professional, and issued necessary directions to facilitate the resolution process under the IBC. The decision aimed to protect the interests of the operational creditor and oversee the orderly resolution of the corporate debtor's financial obligations.