Qualification as Operational Creditor under I & B Code leads to Corporate Insolvency Resolution Process The National Company Law Tribunal, Chennai, determined that the petitioner qualified as an Operational Creditor under the I & B Code, 2016, allowing ...
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Qualification as Operational Creditor under I & B Code leads to Corporate Insolvency Resolution Process
The National Company Law Tribunal, Chennai, determined that the petitioner qualified as an Operational Creditor under the I & B Code, 2016, allowing the application for commencing the corporate insolvency resolution process against the Corporate Debtor. The Tribunal appointed an Interim Resolution Professional and declared a moratorium to protect essential goods and services supplied to the Corporate Debtor. The application was admitted, and further actions were directed to be communicated to both parties.
Issues: Application under Section 9 of the I & B Code, 2016 for recovery of money advanced for services not rendered by the Corporate Debtor.
Analysis: 1. Background of the Case: The petitioner engaged the Corporate Debtor for services related to a Wind power Project in Gujarat. The Corporate Debtor received an advance payment but failed to perform the agreed services. Subsequently, an agreement was made for the refund, which the Corporate Debtor failed to fulfill, leading to a legal notice being issued.
2. Petitioner's Prayer: The petitioner sought winding up of the company, appointment of a liquidator, and other appropriate reliefs due to the Corporate Debtor's failure to repay the advance amount.
3. Procedural History: The petition was transferred to the National Company Law Tribunal, Chennai. Despite proper service to the respondent, the respondent did not appear, leading to the proceeding ex parte.
4. Interpretation of 'Services' and 'Operational Debt': The Tribunal analyzed the definition of 'Operational Creditor' and 'Operational Debt' under the I & B Code, 2016. The petitioner's claim for the advance payment for services not rendered fell within the purview of 'Operational Debt' as defined in the statute.
5. Decision on Operational Creditor Status: The Tribunal determined that the petitioner qualified as an Operational Creditor and allowed the application for commencing the corporate insolvency resolution process.
6. Appointment of Interim Resolution Professional: The Tribunal directed the Registry to refer the matter to the IBBI for recommending the name of an Interim Resolution Professional within a specified timeline.
7. Moratorium Order: A moratorium was declared from the date of the order until the completion of the corporate insolvency resolution process, prohibiting various actions against the Corporate Debtor, including legal proceedings and asset disposal.
8. Protection of Essential Goods and Services: The order ensured that the supply of essential goods or services to the Corporate Debtor would not be terminated during the moratorium period.
9. Admission of Application: The Tribunal admitted the application and directed the Registry to communicate the order to both the operational creditor and the corporate debtor for further action.
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