2020 (1) TMI 841 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment - dispute regarding the operational debt payable - existence of dispute or not - HELD THAT - Hon'ble Supreme Court in the case of Innoventive Industries Ltd. v. ICICI Bank Ltd. 2017 (9) TMI 58 - SUPREME COURT after setting out some of the sections of the Code, laid down the scheme of the Code, came to financial and operational creditors triggering the Code against a corporate debtor and held that The Code gets triggered the moment default is of rupees one lakh or more. The Corporate Insolvency Resolution Process may be triggered by the corporate debtor itself or a financial creditor or operational creditor. In the light of the Hon'ble Supreme Court Judgment and the provisions thereof as enshrined in Insolvency Bankruptcy Code, this adjudicating authority is of the considered view that operational debt is due to the Applicant. That, service is complete and no dispute has been raised by the respondent. That, Applicant is an Operational Creditor within the meaning of sub-section (20) of Section 5 of the Code - From the aforesaid material on record, petitioner is able to establish that there exists debt as well as occurrence of default. Further, as per the Bank Statement produced by the applicant, it reveals that the corporate debtor made some payment on 07.03.2017, hence the claim is also not time barred. The Application filed by the Applicant on 8th February, 2019 is complete in all respect. Application admitted - moratorium declared.

Summary

Issues:
1. Application under Section 9 of The Insolvency and Bankruptcy Code, 2016.
2. Determination of operational debt and default.
3. Appointment of Interim Resolution Professional.
4. Declaration of moratorium and its implications.

Issue 1: Application under Section 9 of The Insolvency and Bankruptcy Code, 2016

The petitioner, an operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking payment of dues from the respondent, a corporate debtor. The petitioner provided evidence of goods supplied to the respondent, establishing a total due amount of ?10,55,258. Despite multiple opportunities, the respondent failed to file a reply or raise any dispute regarding the debt.

Issue 2: Determination of operational debt and default

The Tribunal analyzed the application to ascertain the existence of operational debt exceeding ?1,00,000, the due and payable status of the debt supported by documentary evidence, and the absence of any dispute raised by the respondent. Referring to the judgment in Innoventive Industries Ltd. v. ICICI Bank Ltd., the Tribunal emphasized that the Code is triggered upon default of ?1,00,000 or more, and in this case, the operational debt was found to be due to the applicant. The Tribunal noted that the application was complete and acknowledged the lack of dispute from the respondent.

Issue 3: Appointment of Interim Resolution Professional

The Tribunal appointed an Interim Resolution Professional, Shri Bhupendra Singh Narayan Singh Rajput, to act under Section 13(1)(c) of the Code. The Tribunal directed the Insolvency Resolution Professional to make a public announcement of the initiation of Corporate Insolvency Process and call for submission of claims as required by Section 15 of the Code.

Issue 4: Declaration of moratorium and its implications

Upon admitting the petition and declaring a moratorium, the Tribunal prohibited various actions against the corporate debtor, including the institution of suits, transferring of assets, recovery of property, and termination of essential services during the moratorium period. The order of moratorium was to remain in effect until the completion of the corporate insolvency resolution process or until a resolution plan was approved or liquidation ordered. The Tribunal communicated the order to all relevant parties and the appointed Interim Insolvency Resolution Professional.

In conclusion, the Tribunal admitted the petition, declared a moratorium, appointed an Interim Resolution Professional, and directed the initiation of the Corporate Insolvency Process, ensuring the protection of the rights and interests of the parties involved in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016.