2022 (11) TMI 106 - 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 dated 27.08.2018 was properly served? - HELD THAT - The demand notice sent at registered address of the respondent/corporate debtor, as available on the master data of the corporate debtor, was delivered and tracking report showing its delivery has also been annexed with the petition. Whether the operational debt was disputed by the corporate debtor? - HELD THAT - The petitioner/operational creditor has filed an affidavit dated 28.11.2018 under Section 9(3)(b) of the Code, wherein it has been deposed that the operational creditor has not received reply to its demand notice from the respondent/corporate debtor. Further, it has been deposed that there is no notice given by the respondent/corporate debtor relating to a dispute of the unpaid operational debt. Whether this application was filed within limitation? - HELD THAT - A perusal of the case file shows that the present petition was filed vide Diary No.4839 dated 10.12.2018, and the date of default is 11.04.2017 i.e. the date of issuance of invoice (Annexure III). Therefore, this Adjudicating Authority finds that this application has been filed within limitation. There is a total unpaid operational debt of Rs.3,10,000/- as claimed in the petition. As noted above, the operational creditor has provided the details of the debt due and has also annexed with the petition copy of bank account maintained by the operational creditor and the invoice. Accordingly, the petitioner/operational creditor has established the debt and the default, which is more than Rupees one lakh i.e. the threshold limit (pre-revised) - the corporate debtor has failed to make payment of the aforesaid amount due as mentioned in the statutory notice till date. Thus, the conditions under Section 9 of the Code stand satisfied. It is evident from the above-mentioned facts that the liability of the corporate debtor is undisputed and established. Also, there is no rebuttal to the claim filed by the petitioner as respondent/corporate debtor chose not to appear. Accordingly, the petitioner has proved the debt and the default which is above threshold limit. In the present petition, all the requirements have been satisfied. 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 for initiation of the CIRP in the case of the corporate debtor, Vishal Lakto India Limited. is admitted. Petition admitted - moratorium declared.

Issues Involved:
1. Proper service of the demand notice.
2. Dispute of operational debt by the corporate debtor.
3. Filing of the application within the limitation period.
4. Completeness of the application.
5. Satisfaction of conditions under Section 9 of the Insolvency and Bankruptcy Code.
6. Appointment and directions for the Interim Resolution Professional (IRP).
7. Imposition of moratorium.

Issue-wise Detailed Analysis:

1. Proper Service of the Demand Notice:
The tribunal examined whether the demand notice dated 27.08.2018 was properly served. It was established that the demand notice sent to the registered address of the corporate debtor was delivered, as evidenced by the tracking report annexed with the petition.

2. Dispute of Operational Debt by the Corporate Debtor:
The tribunal considered whether the operational debt was disputed by the corporate debtor. The operational creditor filed an affidavit under Section 9(3)(b) of the Code, stating that no reply was received to the demand notice, and there was no notice from the corporate debtor disputing the unpaid operational debt.

3. Filing of the Application within Limitation:
The tribunal reviewed whether the application was filed within the limitation period. The petition was filed on 10.12.2018, and the date of default was 11.04.2017, which was within the permissible period, thus confirming the application was filed within limitation.

4. Completeness of the Application:
The tribunal verified the completeness of the application filed in Form 5. The petition was found to be complete with all necessary details, including the unpaid operational debt of Rs.3,10,000/-, supported by the bank account details and invoice.

5. Satisfaction of Conditions under Section 9 of the Code:
The tribunal assessed whether the conditions under Section 9 of the Code were satisfied. It was noted that the corporate debtor failed to make the payment despite the demand notice, and the liability was undisputed and established. The tribunal concluded that the petitioner proved the debt and default, which was above the threshold limit.

6. Appointment and Directions for the Interim Resolution Professional (IRP):
The tribunal appointed Mr. Ashish Singh as the Interim Resolution Professional (IRP) and provided specific directions:
- The term of appointment in accordance with Section 16(5) of the Code.
- Suspension of the Board of Directors' powers and vesting of management with the IRP.
- The IRP to act in accordance with the Code and professional ethics.
- Public announcement of the CIRP initiation within three days.
- Cooperation from the corporate debtor's management.
- Retrieval of information from the corporate debtor's data systems.
- Constitution of the Committee of Creditors within thirty days and convening the first meeting within seven days.
- Regular progress reports to be sent to the tribunal every fortnight.

7. Imposition of Moratorium:
The tribunal directed a moratorium under Section 14 of the Code, which includes:
- Suspension of suits or proceedings against the corporate debtor.
- Prohibition on transferring or disposing of the corporate debtor's assets.
- Prevention of foreclosure or enforcement of security interests.
- Protection of essential goods or services supply to the corporate debtor during the moratorium period.
- The moratorium to remain effective until the completion of the CIRP or approval of a resolution plan or liquidation order.

Conclusion:
The tribunal admitted the petition for initiating the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor and directed the petitioner to deposit Rs.40,000 with the IRP for immediate CIRP expenses. The order was communicated to both parties and the IRP.

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