2019 (10) TMI 57 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor - Default in repayment of operational debt - HELD THAT - Perusal of the replies of both the parties clarifies that there is an admitted default in repayment of the operational debt by the the corporate debtor, and therefore fit for admission. The default in payment of operational debt owned and debt became payable from the date of the invoice dated 04.02.2019 raised by the Applicant. Hence, the claim of the applicant is within limitation and the debt is not time barred - the present application is complete and the Applicant is entitled to claim its dues which are un-controverted by the Corporate Debtor, establishing the default in payment of the operational debt beyond doubt. Hence, the present application deserves to be admitted. Application admitted - moratorium declared.

Issues:
1. Application filed under section 9 of Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency process.
2. Default in payment by the Corporate Debtor for LED tube lights and drivers supplied by the Applicant.
3. Admitted liability by the Corporate Debtor due to financial crunch.
4. Jurisdiction of the Tribunal to entertain the application.
5. Debt not time-barred and within limitation.
6. Admission of the application and appointment of Interim Resolution Professional.
7. Moratorium imposed under Section 14(1) of IBC, 2016.

Analysis:
1. The Applicant, a private limited company, filed an application under section 9 of the Insolvency and Bankruptcy Code, 2016 seeking to initiate the Corporate Insolvency process against the Corporate Debtor, who had defaulted in making payments for LED tube lights and drivers supplied by the Applicant. The debt due and payable by the Corporate Debtor to the Applicant was stated to be &8377; 7,00,112.92, including interest. The Applicant issued a Demand Notice under section 8 of the Code, which was duly received by the Corporate Debtor, who admitted its liability but cited financial constraints for non-payment.

2. Both parties acknowledged the default in repayment, leading to the admission of the application. The Tribunal asserted its jurisdiction to entertain the matter, given the location of the Corporate Debtor's registered office in Delhi. The debt was found to be within limitation and not time-barred, making the claim valid for admission. The Tribunal deemed the application complete, with the debt uncontested by the Corporate Debtor, warranting its admission.

3. The Tribunal appointed an Interim Resolution Professional (IRP) to oversee the proceedings, ensuring compliance with the provisions of the Code, Rules, and Regulations. The IRP was tasked with managing the day-to-day affairs of the Corporate Debtor and protecting its assets. The Tribunal emphasized the legal obligation of all personnel associated with the Corporate Debtor to cooperate with the IRP, with provisions for appropriate action in case of non-compliance.

4. Following the admission of the application under Section 9(5) of the IBC, 2016, a moratorium was imposed as per Section 14(1), prohibiting various actions against the Corporate Debtor, including legal proceedings and asset transfers. Essential supplies to the Corporate Debtor were to continue during the moratorium period, with exceptions specified by the Central Government. The moratorium was to remain in effect until the completion of the corporate insolvency resolution process, subject to approval of a resolution plan or liquidation order by the Adjudicating Authority.

5. The Tribunal communicated the order to the Applicant, Corporate Debtor, and the Insolvency and Bankruptcy Board of India (IBBI). The IRP was also provided with a copy of the order for compliance and further proceedings. The application was officially admitted under Section 9(5) of the IBC, 2016, marking the commencement of the corporate insolvency resolution process.

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