2019 (10) TMI 894 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make payments - Existence of default or not - HELD THAT - It is clear that the Applicant has provided services for which Corporate Debtor has failed to make payment. The outstanding, operational debt of more than Rupees One Lakh is due and payable against the Corporate Debtor and Corporate Debtor has committed default in making the payment. Further, the Corporate Debtor has not controverted the same even during the hearing. Therefore, the default is also established. The Application under sub-section (2) of Section 9 of I B Code, 2016 is complete. The existing operational debt of more than rupees one lakh is due and payable against the corporate debtor and its default is also proved - Application admitted - moratorium declared.

Summary

Issues: Application under Section 9 of I&B Code for initiating Corporate Insolvency Resolution Process.

Detailed Analysis:
1. Background: Eatigo India Private Limited, the Operational Creditor, filed an application under section 9 of the Insolvency & Bankruptcy Code, 2016 (I&B Code) against Liquid Glass Hospitality LLP, the Corporate Debtor, claiming a default of &8377;6,36,167/-, including interest.

2. Service Agreement and Invoices: The Applicant provided online reservation services to the Corporate Debtor as per the Agreement dated 21.05.2018. Six invoices were issued between 31.07.2018 to 31.12.2018, totaling the claimed amount. Legal and Demand Notices were sent when payments were not made.

3. Contentions: The Corporate Debtor contended that the Applicant did not provide a copy of the Agreement, requesting it as the basis for the claimed amount. However, the Corporate Debtor did not raise any disputes before the Demand Notice and failed to provide evidence of any pre-existing dispute.

4. Judicial Interpretation: Referring to Section 5(6) of the I&B Code, the Tribunal clarified the definition of "dispute" and emphasized the need for pre-existing disputes before the receipt of the demand notice. The Corporate Debtor's defense was deemed invalid as no evidence of a pre-existing dispute was presented.

5. Application Validity: The Tribunal found the Application complete and properly filed within the limitation period, with all necessary documents submitted, including the Demand Notice, postal track report, and bank certificate.

6. Operational Debt and Default: The Tribunal established that the Applicant is an Operational Creditor under the I&B Code, and the Corporate Debtor failed to pay the operational debt exceeding &8377;1 Lakh, thereby defaulting on payment obligations.

7. Admission of Application: Considering the completeness of the Application and the proven default, the Tribunal admitted the Application under Section 9 of the I&B Code for initiating the corporate insolvency resolution process against the Corporate Debtor.

8. Moratorium and Directions: The Tribunal declared a moratorium under Section 14 of the I&B Code, prohibiting various actions against the Corporate Debtor, appointing an Interim Resolution Professional, and specifying consequential directions for the resolution process.

9. Compliance and Communication: The Registry was directed to communicate the order to all concerned parties, including the Operational Creditor, Corporate Debtor, and the appointed Interim Resolution Professional, ensuring immediate compliance.

This detailed analysis provides a comprehensive overview of the Tribunal's judgment on the issues involved in the Application under Section 9 of the I&B Code for initiating the Corporate Insolvency Resolution Process.