2020 (6) TMI 331 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - exisetnce of debt and dispute or not - HELD THAT - On perusal of the record it is found that the corporate debtor has not filed any reply. During the course of hearing learned lawyer for respondent conceded that he does not wish to file reply and fairly admitted the debt under the instruction of the corporate debtor - On perusal of the record it is also found that the instant petition filed by the applicant is well within limitation and there is no denial of the operational debt and/or any pre-existing dispute regarding the operational debt from the corporate debtor. In the instant application from the material placed on record by the Applicant this Authority is satisfied that the application is complete in all respect and the Corporate Debtor committed default in paying the operational debt to the Applicant - the documents produced by the operational creditor clearly establish the debt and there is default on the part of the Corporate Debtor in payment of the operational debt . The respondent has defaulted the debt and has admitted the operational debt - petition admitted - moratorium declared.

Summary

Issues involved:
1. Application under section 9 of The Insolvency and Bankruptcy Code, 2016 for unpaid operational debt.
2. Default in payment by the corporate debtor.
3. Adjudication of the application and declaration of moratorium.

Analysis:

Issue 1: Application under section 9 of The Insolvency and Bankruptcy Code, 2016 for unpaid operational debt
The petitioner, in his individual capacity, filed a petition as an operational creditor under section 9 of the Insolvency and Bankruptcy Code, 2016, claiming an outstanding amount from the respondent corporate debtor for body repairing services provided. The operational creditor submitted invoices and relevant documents to support the claim. Notices were issued to the corporate debtor demanding payment, which remained unpaid. The respondent did not file a reply and admitted the debt during the hearing.

Issue 2: Default in payment by the corporate debtor
Upon review of the records, it was established that the corporate debtor had not disputed the operational debt or raised any pre-existing disputes. The tribunal found that the operational creditor's claim was within the limitation period, and there was a clear default on the part of the corporate debtor in paying the operational debt. The documents provided by the operational creditor established the existence of the debt and the default by the corporate debtor.

Issue 3: Adjudication of the application and declaration of moratorium
The tribunal, considering the Supreme Court judgment and provisions of the Insolvency and Bankruptcy Code, found that the operational debt was due and payable. It was determined that the operational creditor met the requirements of the Code, and the corporate debtor had defaulted on the payment. Consequently, the tribunal admitted the petition, declared a moratorium, and directed the appointment of an Interim Resolution Professional to initiate the Corporate Insolvency Resolution Process. The moratorium order included provisions to prohibit legal actions against the corporate debtor and ensured the continuity of essential services during the process.

In conclusion, the tribunal admitted the petition, declared a moratorium, appointed an Interim Resolution Professional, and directed communication of the order to relevant parties to facilitate the corporate insolvency resolution process effectively.