2020 (10) TMI 162 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - service of demand notice - whether the demand notice in Form No. 3 4 dated 16.10.2019 was properly served? - HELD THAT - The demand notice dated 16.10.2019 was sent at the address as per the master data at Page No.20 of the petition in which the registered office is shown as Village Rani Ki Bain, P.O. Gutkar, District Mandi, Himachal Pradesh-175021. The postal receipt in respect of the Demand Notice is at page-24 of the petition - The copy of demand notice duly acknowledged by the Corporate Debtor is at Page 24 to 30 of the petition. The Corporate Debtor has replied to the demand notice dated 16.10.2019 vide e-mail dated 30.10.2019 admitting the debt. Whether the operational debt was disputed by the corporate debtor? - HELD THAT - The respondent corporate debtor has not disputed the liability towards the operational creditor and has expressed its inability to pay the outstanding towards the operational creditor. Thus, there is no dispute as to the liability between the corporate debtor and the operational creditor. It is also observed that on the last date of hearing, learned counsel for the respondent has admitted its liability and submitted that this CP may be admitted. It has been shown that the corporate debtor has failed to make payment of the aforesaid amount due as mentioned in the statutory notice till date. It is also observed that the conditions under Section 9 of the Code stand satisfied. The applicant-operational creditor states that from the above mentioned facts, it is clear that the liability of the respondent-corporate debtor is undisputed. Accordingly, the petitioner proved the debt and the default, which is more than ₹ 1 lac by the respondent-corporate debtor - In view of the satisfaction of the conditions provided for in Section 9(5)(i) of the Code, the petition for initiation of the CIRP process in the case of the Corporate Debtor M/s. Ram Hari Auto's Pvt. Ltd. is admitted and moratorium and appointment of Interim Resolution Professional is declared. Application admitted - moratorium declared.

Summary

Issues Involved:
1. Proper service of demand notice.
2. Dispute over operational debt.
3. Compliance with Section 9(5)(i) of the Insolvency and Bankruptcy Code, 2016.
4. Admission of the Corporate Insolvency Resolution Process (CIRP).
5. Declaration of moratorium and appointment of Interim Resolution Professional (IRP).

Issue-Wise Detailed Analysis:

1. Proper Service of Demand Notice:
The first issue for consideration was whether the demand notice in Form No. 3 & 4 dated 16.10.2019 was properly served. The demand notice was sent to the registered office address of the corporate debtor as per the master data. The postal receipt for the demand notice was provided, and the corporate debtor acknowledged receipt of the notice via email dated 30.10.2019, admitting the debt.

2. Dispute Over Operational Debt:
The next issue was whether the operational debt was disputed by the corporate debtor. The corporate debtor did not dispute the liability towards the operational creditor and admitted its inability to pay the outstanding amount. There was no notice of dispute provided by the corporate debtor, and the affidavit regarding no dispute was submitted by the operational creditor.

3. Compliance with Section 9(5)(i) of the Insolvency and Bankruptcy Code, 2016:
The Tribunal examined whether the conditions under Section 9(5)(i) of the Code were satisfied. The application was found to be complete, and there was no payment of the unpaid operational debt. The demand notice was properly delivered, and no dispute was raised by the corporate debtor. The proposed Interim Resolution Professional (IRP) had no disciplinary proceedings pending against him.

4. Admission of the Corporate Insolvency Resolution Process (CIRP):
The Tribunal found that the corporate debtor failed to make the payment of ?37,16,400/- due to the operational creditor. The conditions under Section 9 of the Code were satisfied, and the debt and default were proved by the operational creditor. Consequently, the petition for initiation of the CIRP was admitted.

5. Declaration of Moratorium and Appointment of Interim Resolution Professional (IRP):
The Tribunal declared a moratorium in terms of Section 14 of the Code, which included:
- Suspension of suits or proceedings against the corporate debtor.
- Prohibition on transferring or disposing of assets by the corporate debtor.
- Suspension of actions to enforce security interests.
- Prohibition on recovery of property occupied by the corporate debtor.

The Tribunal appointed Mr. Ravinder Kumar Goel as the Interim Resolution Professional (IRP) with specific directions, including:
- Suspension of the powers of the Board of Directors.
- Management of the corporate debtor's affairs by the IRP.
- Public announcement of the CIRP initiation.
- Cooperation from the corporate debtor's personnel.
- Constitution of a Committee of Creditors and submission of a report to the Tribunal.
- Regular progress reports to be sent to the Tribunal.

Conclusion:
The Tribunal admitted the petition for initiation of the CIRP against the corporate debtor, declared a moratorium, and appointed an Interim Resolution Professional to manage the process. The operational creditor's application for a stay on the alienation of the corporate debtor's assets was also disposed of in view of the admission of the CIRP.