2020 (2) TMI 698 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute - HELD THAT - On perusal of the records it is found that having failed to get the outstanding payments from the respondent, the applicant was compelled to issue demand notice under section 8 of I B Code on dated 23.07.2019. Record also shows that the respondent has not raised any reply/dispute against the demand notice so issued by the applicant - On perusal of the record it is found that the petition is complete in all respect. This adjudicating authority is of the considered view that operational debt is due to the Applicant and it fulfilled the requirement of IB Code as enshrined in the Code. That, the respondent also filed affidavit admitting the dues and no dispute has been raised by the respondent at any point of time. That, Applicant is an Operational Creditor within the meaning of Section 5 sub-section (20) of the Code. From the aforesaid material on record, petitioner is able to establish that there exists debt as well as occurrence of default and the amount claimed by operational creditor is payable in law by the corporate debtor as the same is not barred by any law of limitation and/or any other law for the time being in force. It is a fit case to initiate Insolvency Resolution Process by admitting the Application under Section 9(5)(1) of the Code - petition admitted - moratorium declared.

Summary

Issues:
1. Petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by operational creditor.
2. Admittance of debt by corporate debtor.
3. Examination of application under Section 9 of the Act as per Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd.
4. Declaration of moratorium and appointment of Interim Resolution Professional.

Issue 1: Petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by operational creditor.
The petitioner, an operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, claiming an outstanding amount of ?18,92,316 against the respondent corporate debtor. The petitioner submitted detailed documentation, including invoices and affidavits, to support the claim. The respondent admitted the debt but cited liquidity issues for non-payment.

Issue 2: Admittance of debt by corporate debtor.
The corporate debtor admitted the debt owed to the operational creditor but explained the delay in payment due to financial constraints beyond its control. The respondent did not dispute the claim or raise any objections against the demand notice issued by the petitioner.

Issue 3: Examination of application under Section 9 of the Act as per Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd.
The Tribunal referred to the case law of Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. to determine the validity of the application under Section 9 of the Insolvency and Bankruptcy Code. It analyzed the conditions of operational debt exceeding ?1.00 lakh, documentation proving the debt, and the absence of any dispute between the parties. The Tribunal found that the operational debt was due, and the petitioner met the requirements of the Code.

Issue 4: Declaration of moratorium and appointment of Interim Resolution Professional.
Based on the findings and material available, the Tribunal concluded that it was appropriate to initiate the Insolvency Resolution Process by admitting the application under Section 9(5)(1) of the Code. Consequently, the Tribunal declared a moratorium, prohibiting certain actions against the corporate debtor, and appointed an Interim Resolution Professional to oversee the process. The order of moratorium was to remain in effect until the completion of the insolvency resolution process or liquidation, as determined by the Tribunal.

This detailed analysis of the judgment highlights the key issues addressed by the Tribunal, including the admission of debt, compliance with legal provisions, and the subsequent declaration of moratorium and appointment of an Interim Resolution Professional.