2022 (8) TMI 713 - Tri - Insolvency and Bankruptcy

Maintainability of petition - 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 - whether the demand notice in Form 3 dated 20.07.2020 was properly served? - HELD THAT - The petitioner has placed a copy of e-mail which was delivered to the corporate debtor and reply to that has been duly received. Whether the operational debt was disputed by the corporate debtor? - HELD THAT - It is to be noted that none appeared on behalf of the corporate debtor despite repeated service and has been set ex parte vide order dated 27.05.2022. Moreover, the petitioner has appended affidavit u/s 9(3)(b) stating that even after reply to the demand notice, the corporate debtor has not cleared the outstanding dues and instead stated that payments will be made after the receipt of payment by the corporate debtor from M/s Hyosung India Pvt. Ltd., for which the present petition has been filed by the operational creditor. Whether this application is filed within limitation? - HELD THAT - This application was filed on 17.09.2020 vide Diary No.01038. Whereas the date of default is 17.10.2019, therefore, this Adjudicating Authority finds that this application has been filed within limitation. Thus, there is a total unpaid operational debt (in default) of ₹1,27,40,356/-. The operational creditor has provided construction services to the corporate debtor and raised invoices attached as Annexure A-4. Accordingly, the petitioner proved the debt and the default, which is more than Rupees one lakh (prior to the amendment in threshold limit of one crore vide notification No. S.O.1205(E) dated 24.03.2020) by the respondent-corporate debtor - It is seen that the petition preferred by the petitioner is complete in all respects. The material on record clearly goes to show that the respondent committed default in payment of the claimed operational debt even after demand made by the petitioner. Petition admitted - moratorium declared.

Summary

Issues:
1. Proper service of demand notice
2. Disputed operational debt by the corporate debtor
3. Filing of the application within limitation

Analysis:

Issue 1: Proper service of demand notice
The petitioner served a demand notice in Form 3 dated 20.07.2020 to the operational creditor through email, which was not bounced back, as evidenced by the reply received. The Adjudicating Authority found that the demand notice was properly served, meeting the requirements under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC).

Issue 2: Disputed operational debt by the corporate debtor
Despite repeated service, the corporate debtor did not appear, and the petitioner's affidavit stated that the outstanding dues were not cleared even after the demand notice. The corporate debtor mentioned that payments would be made after receiving funds from another entity. The lack of response from the corporate debtor and the petitioner's submission indicated an undisputed liability, satisfying the conditions under Section 9 of the Code.

Issue 3: Filing of the application within limitation
The application was filed on 17.09.2020, within the limitation period, as the default occurred on 17.10.2019. The Adjudicating Authority confirmed that the application was timely filed, meeting the statutory requirements.

The Adjudicating Authority reviewed the complete petition, confirming the unpaid operational debt of Rs. 1,27,40,356, and the petitioner's compliance with all necessary documentation and forms. The Authority admitted the petition, initiating the Corporate Insolvency Resolution Process (CIRP) for the Corporate Debtor. The Authority also imposed a moratorium under Section 14 of the Code, restricting certain actions against the Corporate Debtor's assets.

Additionally, the Authority appointed an Interim Resolution Professional, Mr. Harsh Garg, with specific directions regarding the management of the Corporate Debtor's affairs, cooperation requirements, and reporting obligations. The Interim Resolution Professional was tasked with constituting a Committee of Creditors and providing regular progress reports to the Tribunal.

The petitioner was directed to deposit a specified amount with the Interim Resolution Professional for immediate CIRP expenses, to be reimbursed by the Committee of Creditors. The order was communicated to both parties, and the Registry was instructed to provide a copy to the Interim Resolution Professional promptly.

In conclusion, the petition was allowed and admitted, setting the CIRP process in motion for the Corporate Debtor, M/s SNH Construction Private Limited.