Tribunal Admits Petition for Corporate Insolvency Resolution Process, Declares Moratorium

The tribunal admitted the petition for initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, declared a moratorium, and appointed an Interim Resolution Professional. This decision was based on the satisfaction of the conditions outlined in Section 9(5)(i) of the Insolvency and Bankruptcy Code, 2016.

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Issues Involved:

1. Proper service of demand notice.
2. Existence of a dispute regarding the debt.
3. Compliance with Section 9(5)(i) of the Insolvency and Bankruptcy Code, 2016.
4. Appointment of Interim Resolution Professional (IRP).

Issue-wise Detailed Analysis:

1. Proper Service of Demand Notice:

The first issue for consideration was whether the demand notice in Form No.3 dated 19.09.2017 was properly served. The demand notice was sent to the registered office of the Corporate Debtor as per the master data, and the tracking report confirmed its delivery on 23.09.2017. The Corporate Debtor argued that it had relocated to a new address, but the tribunal found that the change of address was registered after the petition was filed. Hence, the service of the demand notice at the registered address was deemed valid.

2. Existence of a Dispute Regarding the Debt:

The tribunal examined whether there was a genuine dispute concerning the debt. The Corporate Debtor claimed that it had paid a total sum of Rs. 58,96,992/- and that Rs. 2,50,000/- was recoverable from the Operational Creditor. However, the tribunal found inconsistencies in the ledger provided by the Corporate Debtor and noted that the invoices from January to April 2017 were not included. The tribunal also considered the allegations of theft and unprofessional conduct by the security guards but found that these issues were amicably settled, as evidenced by the payment of invoices for the months in question. The tribunal concluded that the dispute raised by the Corporate Debtor was spurious, hypothetical, or illusory.

3. Compliance with Section 9(5)(i) of the Insolvency and Bankruptcy Code, 2016:

The tribunal reviewed the application under Section 9(2) of the Code and found it to be complete. It was established that there was an unpaid operational debt amounting to Rs. 13,04,521/-, comprising outstanding invoices of Rs. 11,29,565/- and interest of Rs. 1,74,956/-. The tribunal confirmed that the demand notice was properly delivered, no reply was furnished by the Corporate Debtor, and no pre-existing dispute was proved. As the Operational Creditor did not propose a Resolution Professional, Section 9(5)(i)(e) was not applicable.

4. Appointment of Interim Resolution Professional (IRP):

Since the Operational Creditor did not propose an IRP, the tribunal referred to the panel of resolution professionals approved by the National Company Law Tribunal, New Delhi. Mr. Gyaneshwar Sahai was selected and appointed as the IRP. The tribunal directed the IRP to take control of the Corporate Debtor's assets, make a public announcement, constitute a committee of creditors, and file regular progress reports.

Conclusion:

The tribunal admitted the petition for initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, declared a moratorium, and appointed Mr. Gyaneshwar Sahai as the Interim Resolution Professional. The tribunal's decision was based on the satisfaction of the conditions provided in Section 9(5)(i) of the Insolvency and Bankruptcy Code, 2016.

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