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2021 (4) TMI 221 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - application is complete in all respects or not - HELD THAT - The Corporate Debtor made a submission that there was no relationship between the Operational Creditor or the Corporate Debtor and other application filed against the Corporate Debtor under Section 7 was also pending and listed even today. We verified this fact from the cause list. Thus the factor of collusiveness gets adequately rebutted - The name of the Interim Resolution Professional (IRP) has been proposed, though, it is not mandatory in respect of application filed under Section 9 of the I.B. Code, 2016 - there is no material on record to show that any disciplinary proceedings are pending against such proposed IRP This application is complete in all respects and defect free. It also complies with the requirements of provision of relevant provisions of the Insolvency and Bankruptcy Code 2016 The amount of debt is more than the threshold limit prescribed for the initiation of the CIRP against the Corporate Debtor - Application is deserved to be admitted - application admitted - moratorium declared.
Issues:
1. Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 filed by Operational Creditor against Corporate Debtor. 2. Verification of outstanding debt and default date. 3. Collusive filing of the petition. 4. Appointment of Interim Resolution Professional (IRP). 5. Declaration of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016. 6. Direction for continuation of supplies and protection of assets during moratorium. 7. Communication and dissemination of the order. Issue 1: Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 filed by Operational Creditor against Corporate Debtor: The Operational Creditor, M/s. Chandraudai Automobiles Private Limited, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor, M/s. Rajpal Abhikaran Private Limited, citing a default amount of &8377; 69,34,699/-. The Operational Creditor had sold three cars to the Corporate Debtor, raising invoices for a total value of &8377; 88,85,100/-, out of which only &8377; 19,50,400/- was paid, leaving a balance unpaid. A notice of demand under Section 8 of the Code was served on the Corporate Debtor on 06.09.2019, with proof of service provided. Issue 2: Verification of outstanding debt and default date: The Operational Creditor's Counsel presented the facts and documentary evidence supporting the claim of the due and payable amount, which the Corporate Debtor admitted. There were concerns raised regarding the collusive nature of the petition, but it was clarified that there was no relationship between the Operational Creditor and the Corporate Debtor. The application was found to be complete and defect-free, meeting the requirements of the Insolvency and Bankruptcy Code, 2016, with the debt amount exceeding the threshold for initiating the Corporate Insolvency Resolution Process. Issue 3: Collusive filing of the petition: Despite initial concerns about collusiveness, it was established that there was no such relationship between the Operational Creditor and the Corporate Debtor, with another application under Section 7 pending against the Corporate Debtor. This clarification dispelled any doubts about the collusive nature of the filing. Issue 4: Appointment of Interim Resolution Professional (IRP): Although the appointment of an IRP was not mandatory for applications under Section 9 of the Code, a proposed IRP was named, as per Section 16(3) of the Code. The proposed IRP's consent was on record, with no pending disciplinary proceedings against them. Ms. Teena Saraswat Pandey was appointed as the IRP to conduct the Corporate Insolvency Resolution Process in accordance with the provisions of the Code. Issue 5: Declaration of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016: The Tribunal declared a moratorium under Section 14 of the Code, prohibiting various actions against the Corporate Debtor, including the institution of suits, transferring of assets, enforcement of security interests, and recovery of property. The moratorium would be in effect until the completion of the Corporate Insolvency Resolution Process or until a resolution plan is approved or liquidation is ordered. Issue 6: Direction for continuation of supplies and protection of assets during moratorium: During the moratorium period, the IRP was directed to ensure the continuation of supplies to the Corporate Debtor and to protect and manage its assets as a going concern. The Operational Creditor was instructed to pay an advance of &8377; 50,000/- to the IRP for the smooth conduct of the Corporate Insolvency Resolution Process, with further interim funds to be provided as per rules. Issue 7: Communication and dissemination of the order: The Registry was directed to communicate the order to the Operational Creditor, Corporate Debtor, IRP, and the Registrar of Companies. Additionally, the order was to be uploaded on the website, and the IRP was required to file progress reports for the Authority's record. This detailed analysis covers the key issues addressed in the judgment, providing a comprehensive understanding of the Tribunal's decision in the matter.
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