2022 (6) TMI 1186 - 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 - The applicant has claimed the default on part of the Respondent for amount of Rs. 13,98,035 (Rupees Thirteen Lakhs Ninety Eight Thousand and Thirty Five), including 18% interest - In compliance of Section 9(3)(b) of the Insolvency and Bankruptcy Code, 2016, the Operational Creditor has filed affidavit dated 25.07.2019 stating that no notice of any preexisting dispute has been received by the Applicant from the Corporate Debtor relating to the dispute of the un-paid Operational Debt. This Tribunal vide order dated 21.09.2021 directed the counsel of Operational Creditor (Operational Creditor is subjected to CIRP) to file an affidavit cum undertaking to pay an amount of Rs. 2 Lacs to IRP as mobilization advance which may be ordered by the Tribunal if the CIRP is initiated against the Corporate Debtor and also continue to keep paying the fee and expenses of RP until the constitution of CoC. The Liquidator of the Operational Creditor filed an affidavit on 11.01.2022 stating that the Operational Creditor/Applicant has sufficient funds to pay the CIRP Cost, in case CIRP of the Corporate Debtor is admitted, he undertakes to pay the same as directed by this Hon'ble Tribunal. This Adjudicating Authority is of the view that there is an operational debt which is due from the Corporate Debtor and the Corporate Debtor has defaulted in making payment of the amount due and along with that, in the absence of any pre-existing dispute, this tribunal admits this application and initiates CIRP on the Corporate Debtor with immediate effect. Application admitted - moratorium declared.

Summary

Issues:
1. Alleged default in clearing debt by the Respondent.
2. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016.
3. Examination of documents and arguments by the Adjudicating Authority.
4. Appointment of Interim Resolution Professional.
5. Declaration of moratorium under Section 14 of the Code.

Analysis:

1. The Applicant filed an application to initiate CIRP against the Respondent due to an alleged default in clearing a debt of Rs. 13,98,035, including interest. The Applicant provided details of the transactions, invoices raised, and the amount due from the Respondent. Despite notices, the Corporate Debtor did not appear, leading to an ex-parte order against them.

2. The Adjudicating Authority carefully reviewed the documents and arguments presented by the Operational Creditor, confirming the default amount claimed. The Operational Creditor complied with the necessary provisions of the Code, including filing an affidavit stating no pre-existing dispute. The Tribunal admitted the application and initiated CIRP against the Corporate Debtor.

3. An Interim Resolution Professional was appointed to oversee the proceedings. The Liquidator of the Operational Creditor was directed to deposit funds to cover immediate expenses, which would be reimbursed as part of the CIRP costs. Public announcements were mandated, and a moratorium was declared, prohibiting certain actions against the Corporate Debtor.

4. The Interim Resolution Professional's responsibilities were outlined, emphasizing adherence to the Code's provisions and ensuring cooperation from all parties involved. Any violations or illegal transactions by the ex-management were to be reported for appropriate action. The order was to be communicated to relevant parties promptly.

5. The Registrar of Companies was instructed to update the status of the Corporate Debtor and notify the public about the admission of the petition. The judgment aimed to ensure a structured resolution process in line with the Insolvency and Bankruptcy Code, safeguarding the interests of all stakeholders involved.