2020 (4) TMI 863 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT - The application made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Tribunal admits this Petition and orders initiation of CIRP against the Corporate Debtor. Application admitted - moratorium declared.

Issues:
1. Initiation of Corporate Insolvency Resolution Process under section 9 of the Insolvency & Bankruptcy Code, 2016.
2. Jurisdiction of the National Company Law Tribunal, Mumbai Bench.
3. Default in payment by the Corporate Debtor.
4. Admission of liability by the Corporate Debtor in previous proceedings.
5. Violation of Consent Terms by the Corporate Debtor.
6. Completeness of the application by the Operational Creditor.
7. Appointment of Interim Resolution Professional.
8. Moratorium under section 14 of the IBC.
9. Management of the Corporate Debtor during the CIRP period.

Analysis:
1. The judgment pertains to a Company Petition filed under section 9 of the Insolvency & Bankruptcy Code, 2016 by an Operational Creditor seeking to initiate Corporate Insolvency Resolution Process (CIRP) against a Corporate Debtor for defaulting on payment obligations.

2. The Corporate Debtor, a public company, was incorporated under the Companies Act, 1956, and the Tribunal established its jurisdiction to hear the petition based on the Corporate Debtor's registration details.

3. The petition was filed due to the Corporate Debtor's failure to make payments totaling a significant amount, leading to the Operational Creditor's claim for initiation of CIRP.

4. The Corporate Debtor had previously admitted to the debt in an earlier proceeding, but failed to fulfill the agreed payment terms, indicating a breach of the Consent Terms.

5. The Operational Creditor's application was found to be complete and in compliance with the law, establishing the Corporate Debtor's default and justifying the admission of the petition.

6. The Tribunal admitted the petition, ordered the initiation of CIRP against the Corporate Debtor, and appointed an Interim Resolution Professional to oversee the resolution process.

7. A moratorium was imposed under section 14 of the IBC, affecting various actions related to the Corporate Debtor's assets and legal proceedings.

8. The management of the Corporate Debtor during the CIRP period was vested in the appointed Resolution Professional, with specific directions for compliance and reporting to relevant authorities.

9. The judgment outlined detailed steps, including the deposit of funds by the Operational Creditor, communication of orders to involved parties, and updating of corporate records with regulatory authorities for transparency and compliance purposes.

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