2019 (2) TMI 1833 - Tri - Insolvency and Bankruptcy

Tribunal Admits Creditor's Insolvency Petition Against Debtor, Declares Moratorium

M/s. Cosmic Chemicals Versus M/s. Yag Mag Labs Private Limited

The Tribunal admitted the Operational Creditor's petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor for ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- The notice was sent to the Corporate Debtor vide its order dated 23.10.2018 which is directed by the Tribunal to the Operational Creditor. The Demand Notice issued to the Corporate Debtor. There was no reply to the Demand Notice. Corporate Debtor did not raise any dispute - The Operational Creditor filed Form-3 and 4. It is clear from the record that Operational Creditor issued Demand Notice/ Invoices. The operational creditor also filed order dated 23.05.2018 passed by Micro and Small Enterprises Facilitation Council. The Operational Creditor also filed postal receipts evidencing the dispatch of demand notice. The Operational Creditor also filed copy of Bank Account statement (State Bank of India) Thus, Operational Creditor filed documentary proof in support of the claim and also placed evidence that Corporate Debtor committed default. Therefore, petition is liable to be admitted. The Adjudicating Authority is satisfied that the Corporate Debtor failed to discharge its liability mentioned in the Petition filed by the Operational Creditor under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC), resulting occurrence of default for an amount of ₹ 32,02,543/-. Petition is admitted - Moratorium declared. Issues involved:Petition filed by Operational Creditor under Section 9 of Insolvency and Bankruptcy Code, 2016 for default in repayment by Corporate Debtor.Analysis:The petition was filed by the Operational Creditor, M/S. Cosmic Chemicals, against the Corporate Debtor for defaulting on a repayment amount of Rs. 32,02,543. The Operational Creditor, a partnership firm engaged in the manufacture of Chemicals, had a business relationship with the Corporate Debtor since 2015. The Corporate Debtor had raised purchase orders for the supply of magnesium Nitrate, amounting to Rs. 49,20,225, with a payment condition of 75 days. The Operational Creditor supplied the materials as per the specifications and satisfaction of the Corporate Debtor, totaling Rs. 33,16,275, which remained unpaid. Invoices were raised, acknowledged by the Corporate Debtor, and payment of Rs. 1,13,732 was made, leaving an outstanding balance of Rs. 32,02,543.The Corporate Debtor, despite demands, resorted to the Micro and Small Enterprises Facilitation Council for a claim under the MSME Act, 2016. After conciliation and arbitration, an order was passed directing the Corporate Debtor to pay the outstanding amount, which was not complied with. The Operational Creditor, due to non-compliance of the demand notice, approached the Tribunal under the IBC 2016 to admit and adjudicate the Company Petition.The Tribunal found that the Corporate Debtor did not dispute the demand notice and failed to reply, confirming the default. The Operational Creditor submitted documentary proof, including invoices, orders, and postal receipts, supporting the claim and default by the Corporate Debtor. Consequently, the petition was admitted by the Adjudicating Authority under Section 9 of the IBC, 2016.The Adjudicating Authority declared a moratorium under Section 14 of the Code, prohibiting legal actions against the Corporate Debtor, transferring or disposing of assets, and ensuring the supply of essential goods or services is not interrupted. An Interim Resolution Professional was appointed to oversee the Corporate Insolvency Resolution Process, with the moratorium effective until the completion of the resolution process or liquidation approval, whichever is earlier. Public announcement of the insolvency resolution process was mandated, and the petition was admitted accordingly.