Chartered Accountant's Services Deemed 'Operational Debt' under Insolvency Code

The Tribunal determined that professional services provided by a Chartered Accountant constitute "Operational Debt" under the Insolvency and Bankruptcy Code, 2016. The Petitioner's claim for non-payment of services met the criteria for debt and default under the Code. Despite the Operational Debtor's non-response, the Tribunal initiated the Corporate Insolvency Resolution Process. An Interim Resolution Professional was appointed with specified duties and responsibilities, including compliance with the Moratorium under Section 14 of the Code. The petition was admitted and disposed of according to the Tribunal's judgment.

---

---

Issues:
- Petition filed under Insolvency and Bankruptcy Code, 2016 by the Operational Creditor.
- Determination of whether professional services provided by a Chartered Accountant constitute "Operational Debt" under the Code.
- Examination of the existence of debt and default as defined under the Code.
- Analysis of the provisions of sections 8 and 9 of the Code regarding the Demand Notice and initiation of Corporate Insolvency Resolution Process.
- Appointment of an Interim Resolution Professional and the implications of Moratorium under Section 14 of the Code.
- Obligations of the Interim Resolution Professional under Section 18 of the Code.

Detailed Analysis:

1. The Petitioner filed a petition under the Insolvency and Bankruptcy Code, 2016 as an Operational Creditor, citing non-payment of professional and advisory services by the Corporate Debtor. Attempts were made to serve the Petition through various means, including registered post and email.

2. The key issue addressed was whether the professional services provided by the Chartered Accountant fell under the definition of "Operational Debt" as per Section 5(21) of the Code. The Tribunal held that professional services constitute "services" as defined in the Code, making the debt claim eligible for adjudication under the Code.

3. The Tribunal examined the existence of debt and default as defined under the Code, determining that the Petitioner's claim met the criteria for both debt and default under Sections 3(11) and 3(12) of the Code.

4. Provisions of sections 8 and 9 of the Code were analyzed concerning the Demand Notice and the initiation of the Corporate Insolvency Resolution Process. Despite the Operational Debtor's non-response, the Tribunal found grounds for initiating the resolution process.

5. An Interim Resolution Professional was appointed to oversee the resolution process, with specific duties and responsibilities outlined under Section 18 of the Code. The implications of Moratorium under Section 14 were discussed, prohibiting certain actions during the resolution process.

6. The Tribunal directed the Interim Resolution Professional to provide updates on the progress of the Resolution Plan and compliance with the Order. The petition was admitted and disposed of based on the terms outlined in the judgment.

---