2022 (1) TMI 453 - 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 - time limitation - service of demand notice - HELD THAT - The demand notice dated 05.11.2019 was sent through a registered post at the registered office of the Respondent. The postal receipt and tracking report are found to be attached on Page 251 of the Application. Whether the operational debt was disputed by the Respondent? - HELD THAT - The Respondent Corporate Debtor has not filed a reply to the Demand Notice nor the instant Application. Moreover, despite service, there is no representation for the Respondent. Thus, there is no dispute as to the liability of the Respondent Corporate Debtor towards the Applicant Operational Creditor - The Applicant has filed an affidavit under Section 9(3)(b) of the Code to the effect that there is no notice given by the Respondent relating to the dispute of the unpaid operational debt. This Adjudicating Authority has held above that the demand notice in Form No. 3 was properly delivered by the Operational Creditor and no pre-existing dispute is proved. It has been shown that the Corporate Debtor has failed to make payment of the aforesaid amount as mentioned in the statutory notice to date. It is also observed that the conditions under Section 9 of the Code stand satisfied. Hence, this Adjudicating Authority is inclined to initiate CIRP against the Corporate Debtor as envisaged under the provisions of IBC, 2016. Application admitted - moratorium declared.

Summary

Issues: Application under Section 9 of IBC for initiation of CIRP against a Private Limited Company for unpaid operational debt.

Analysis:
1. Jurisdiction and Timeliness: The Adjudicating Authority found the application in order, establishing jurisdiction due to the Respondent's registered office in Jaipur. The application was within the Law of Limitation, filed timely after the default date.

2. Service of Demand Notice: The demand notice in Form 3 dated 05.11.2019 was sent via registered post to the Respondent's registered office, with evidence of delivery attached to the application, ensuring proper service.

3. Dispute of Operational Debt: Despite the demand notice and application, the Respondent did not dispute the operational debt, nor provided any representation, establishing the lack of dispute regarding the liability towards the Operational Creditor.

4. Unpaid Operational Debt: The total outstanding amount of ?82,27,392 was substantiated with the invoice, demand notice, and an affidavit confirming no dispute from the Respondent, leading to a clear default on payment.

5. Initiation of CIRP: Considering the non-payment and fulfillment of conditions under Section 9 of the Code, the Adjudicating Authority decided to initiate the Corporate Insolvency Resolution Process against the Respondent.

6. Appointment of IRP: The Operational Creditor did not propose an Interim Resolution Professional, leading the Authority to appoint Mr. Rajendra Singh Sunda as the IRP for the Corporate Debtor, with specified responsibilities under the Code.

7. Consequences of CIRP: Upon admission, the IRP is directed to take over the Corporate Debtor's affairs, invoke moratorium, and manage the CIRP as per the specified timelines. The Operational Creditor is directed to deposit funds for the IRP's expenses, and all personnel of the Corporate Debtor must cooperate with the IRP.

8. Communication and Compliance: The order's communication to all relevant parties, including the Applicant, Corporate Debtor, and IRP, along with informing the IBBI for records, is mandated within a week from the order date to ensure compliance with the Code.

In conclusion, the Tribunal admitted the application for initiation of CIRP against the Private Limited Company due to the undisputed unpaid operational debt, appointing an IRP to oversee the resolution process as per the provisions of the Insolvency and Bankruptcy Code, 2016.