2021 (4) TMI 632 - Tri - Insolvency and Bankruptcy

Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - existence of debt and dispute or not - HELD THAT - The petitioner has filed all the documents and the petition is complete in all respect. Service is complete and the default occurred on 16.08.2019 - The Adjudicating Authority is only required to consider whether there is any default and the debt is due and payable. In the instant case, the applicant has placed on record enough documents evidencing the default and hence, the present application deserves to be admitted. 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 due and payable 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'. Petition admitted - moratorium declared.

Summary

Issues:
- Petition under Section 9 of The Insolvency and Bankruptcy Code, 2016
- Default in payment of operational debt by the corporate debtor
- Adjudicating the admission of the application and declaring a moratorium

Analysis:
1. The applicant, an operational creditor, filed a petition under Section 9 of The Insolvency and Bankruptcy Code, 2016, against the respondent, a private limited company engaged in the business of trading and selling food products. The applicant alleged that the respondent failed to clear outstanding dues despite repeated promises and assurances.

2. The applicant provided evidence of the debt, including invoices, delivery challans, and a demand notice. The respondent, despite multiple opportunities, did not file a reply to the application. The applicant demonstrated that the default occurred on 16.08.2019, and the respondent changed advocates during the process.

3. The Adjudicating Authority examined the completeness of the petition, the existence of a debt, and the occurrence of default. It was found that the applicant had met all requirements, and there was no pre-existing dispute regarding the operational debt from the respondent's side.

4. Referring to the Mobilox case, the Authority assessed the operational debt exceeding ?1.00 lac, the due and payable status of the debt, and the absence of any dispute from the respondent. The Authority concluded that the operational debt was due and payable, fulfilling the requirements of the Insolvency & Bankruptcy Code.

5. Consequently, the Authority invoked Section 13 of the Code to declare a moratorium, initiating the Corporate Insolvency Resolution Process. An Interim Resolution Professional was appointed, and the moratorium was imposed to prohibit various actions against the corporate debtor, ensuring the continuation of essential services.

6. The order of moratorium was to remain in effect until the completion of the corporate insolvency resolution process or until the approval of a resolution plan or liquidation. The Registry was directed to notify the Registrar of Companies about the corporate insolvency resolution process to avoid any actions detrimental to the process.