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2020 (11) TMI 246 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT - The date of default is 31.05.2019, that is much prior the declaration of Lock-Down period by the Government due to pandemic of COVID-19 virus - The record reveals that the Operational Creditor produced all invoices raised against the Corporate Debtor where under, bricks were sold and delivered or service rendered. It has also proved from the evidence of record that notice under Section 8 of the I.B. Code, 2016 has been served on Corporate Debtor. In view of this, there are no reason to reject the application. The Operational Complied the provision of Section 9(3)(b) and Section 9(3)(c) of the I.B. Code, by filing an affidavit stating that it did not received the amount of claim and no reply from the Corporate Debtor or received any pendency of dispute relating the same - application admitted - moratorium declared.
Issues:
Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process due to default in paying operational debt. Detailed Analysis: The Operational Creditor filed an application against the Corporate Debtor, citing default in paying operational debt of ?11,81,682. The debt arose from goods sold and services rendered between 23.05.2017 to 21.12.2017, with a total outstanding amount of ?69,11,682, of which ?57,30,000 was paid, leaving a balance of ?11,81,682. A notice of demand under Section 8 of the I.B. Code, 2016 was sent on 28.06.2019, but the Corporate Debtor did not pay or raise any dispute. The application proceeded ex-parte as the Corporate Debtor did not appear. The Tribunal found that the Operational Creditor had produced all relevant invoices and served the notice under Section 8 of the I.B. Code, 2016 to the Corporate Debtor. The date of default was before the COVID-19 lockdown. The Operational Creditor complied with the provisions of Section 9(3)(b) and Section 9(3)(c) by affirming non-receipt of the claim amount and absence of any dispute from the Corporate Debtor. No Insolvency Resolution Professional was suggested by the Operational Creditor, leaving the decision to the authority. The Tribunal, after verifying the defect-free application, admitted the Corporate Debtor into Corporate Insolvency Resolution Process. A moratorium under Section 14 of the Code was declared, prohibiting certain actions against the Corporate Debtor. Mr. Sachin Bhatbhatt was appointed as the Interim Resolution Professional (IRP) to conduct the resolution process. The IRP was directed to make a public announcement, manage the company's operations, and receive an advance payment of ?50,000 from the Operational Creditor for the resolution process. The Tribunal ordered the IRP to protect the Corporate Debtor's property value and manage its operations as a going concern. The Operational Creditor was instructed to pay the advance within two weeks. The Registry was directed to communicate the order to all relevant parties and upload it on the website. Consequently, the application was admitted for Corporate Insolvency Resolution Process.
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