2022 (8) TMI 1055 - 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 - service of notice - time limitation - whether the demand notice in Form 3 dated 16.08.2019 was properly served? - HELD THAT - The petitioner has placed a tracking report, whereunder it was stated that the speed post 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 06.07.2022. 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, which is reflected in the certificate issued under Section 9(3)(c) of the Code, 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 28.02.2019 vide Diary No.1015. Whereas the date of default is 09.05.2017, therefore, this Adjudicating Authority finds that this application has been filed within limitation. There is a total unpaid operational debt (in default) of ₹22,40,288/-. The operational creditor has supplied goods 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. In view of the satisfaction of the conditions provided for in Section 9(5)(i) of the Code, the petition is admitted. Petition admitted - moratorium declared.

Issues Involved:
1. Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP).
2. Territorial jurisdiction of the Adjudicating Authority.
3. Default in payment of operational debt by the Corporate Debtor.
4. Validity of demand notice.
5. Disputed operational debt.
6. Timeliness of the application.
7. Completeness of the application and proof of debt.
8. Satisfaction of conditions under Section 9 of the Code for admission of the petition.
9. Appointment of Interim Resolution Professional.
10. Directions for moratorium and management of affairs during CIRP.

Detailed Analysis:

1. Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC):
The petition was filed by the Operational Creditor under Section 9 of the IBC to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor for defaulting on operational debts.

2. Territorial Jurisdiction:
The Corporate Debtor was incorporated under the Companies Act, 1956, with its registered office falling within the territorial jurisdiction of the Adjudicating Authority, the National Company Law Tribunal, Chandigarh Bench.

3. Default in Payment of Operational Debt:
The Operational Creditor provided goods to the Corporate Debtor, who failed to clear the outstanding dues, leading to the default in payment. The petitioner submitted evidence of unpaid operational debt and default occurrence.

4. Validity of Demand Notice:
A demand notice in Form 3 was issued to the Corporate Debtor, and evidence of proper service and receipt of the notice was presented, indicating compliance with the procedural requirements.

5. Disputed Operational Debt:
Despite repeated service and setting the Corporate Debtor ex parte, no appearance was made to dispute the operational debt. Affidavit and certificate confirmed the debt was not cleared even after the demand notice, supporting the petition.

6. Timeliness of the Application:
The application was filed within the limitation period, considering the date of default and the filing date, meeting the requirement for timely submission.

7. Completeness of the Application and Proof of Debt:
The application filed by the petitioner was found to be complete, providing details of the unpaid operational debt, invoices, and supporting documents, satisfying the conditions for admission under Section 9 of the Code.

8. Satisfaction of Conditions under Section 9 for Admission:
The Adjudicating Authority found that all requirements for admission of the petition were met, with clear evidence of default in payment of operational debt, justifying the initiation of the CIRP against the Corporate Debtor.

9. Appointment of Interim Resolution Professional:
An Insolvency Resolution Professional was appointed to manage the affairs of the Corporate Debtor during the CIRP, with specific directions and responsibilities outlined for effective resolution process.

10. Directions for Moratorium and Management of Affairs:
Moratorium was imposed to protect the assets of the Corporate Debtor, and directions were given for the management of affairs, cooperation from all involved parties, constitution of a Committee of Creditors, and regular reporting to the Tribunal.

This detailed analysis covers the key issues addressed in the judgment, outlining the legal proceedings and decisions made by the National Company Law Tribunal, Chandigarh Bench.

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