2021 (4) TMI 1145 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT - It is found that the petitioner has filed all the documents and the petition is complete in all respect. Service is complete. That, the petitioner received the last payment on 25.04.2018, therefore, the date of default is 25.04.2018 - 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 pre-existing dispute regarding the operational debt from the side of the corporate debtor. 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' - this adjudicating authority is of the considered view that operational debt is due to the Applicant and it fulfilled the requirement of I B Code. No dispute has been raised by the respondent at any point of time. That, Applicant is an Operational Creditor within the meaning of Section 5 sub-section 20 of the Code. From the material on record, petitioner is able to establish that there exists debt as well as occurrence of default and the amount claimed by operational creditor is payable in law by the corporate debtor as the same is not barred by any law of limitation and/or any other law for the time being in force. It is evident that the corporate debtor has committed default in payment of operational debt and, therefore, it is a fit case to initiate Insolvency Resolution Process by admitting the Application under Section 9(5)(1) of the Code - petition admitted and the moratorium is declared for prohibiting all of the following in terms of sub-section (1) of Section 14 of the Code.

Summary

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

Analysis:
1. The operational creditor, a logistics service provider, filed a petition under Section 9 of The Insolvency and Bankruptcy Code, 2016 against the corporate debtor, a private limited company, for non-payment of operational debt amounting to ?13,51,214. The applicant provided services for international freight forwarding and raised invoices, to which the respondent made partial payments, leading to outstanding debt.
2. Despite numerous attempts to recover the debt, including a Memorandum of Understanding for payment, the corporate debtor failed to settle the outstanding amount. The operational creditor issued a demand notice under section 8 of the Code, which remained unanswered by the respondent, indicating a clear default in payment.
3. The Adjudicating Authority found the application complete with supporting documents like invoices, board resolution, and demand notice. The authority ascertained the default date, confirmed the absence of pre-existing disputes, and established the debt and default, satisfying the conditions under Section 9 of the Act.
4. Referring to the Mobilox case, the authority confirmed the existence of operational debt exceeding ?1.00 lac, due and payable with no dispute raised by the respondent. The authority declared a moratorium, directing the Interim Resolution Professional to initiate the Corporate Insolvency Resolution Process and manage the corporate debtor's operations during the resolution process.
5. The order of moratorium prohibited legal actions against the corporate debtor, asset alienation, and enforced the continuation of essential services. An Interim Resolution Professional was appointed, and the operational creditor was directed to provide advance funds for the resolution process. The authority communicated the order to all relevant parties and instructed the Registrar of Companies to refrain from striking off the respondent's name during the insolvency resolution process.