Tribunal admits petition under Section 9 of Insolvency and Bankruptcy Code, declares moratorium

The tribunal found the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 to be maintainable. The petition was admitted, and a moratorium was declared, appointing an Interim Insolvency Resolution Professional to oversee the corporate insolvency resolution process. The tribunal determined that there was valid service of demand notice and no evidence of a prior dispute, leading to the continuation of the insolvency proceedings.

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Issues Involved:
1. Maintainability of the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Service of demand notice.
3. Existence of prior dispute.
4. Admission of the petition and declaration of moratorium.

Issue-wise Detailed Analysis:

1. Maintainability of the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016:
The petitioner, M/s. Windson Chemical Private Limited, sought initiation of the corporate insolvency resolution process against M/s. Jason Dekor Private Ltd. under Section 9 of the Insolvency and Bankruptcy Code, 2016. The respondent argued that the petition was not maintainable due to the absence of a valid demand notice. The tribunal found that the petition was complete in all respects and that the petitioner was the operational creditor. The corporate debtor had issued cheques for the amount due, which were dishonored, indicating an admission of debt.

2. Service of demand notice:
The respondent contended that no demand notice was served upon them, making the petition invalid. The tribunal noted that the first demand notice dated 05.08.2017 was withdrawn and replaced with a fresh notice dated 09.11.2017, which was returned undelivered. Subsequently, the petitioner sent another notice on 09.12.2017 via email to the address listed in the Ministry of Corporate Affairs' Master Data. Rule 5(2)(b) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, allows service of demand notice by email, making the service of notice complete and valid.

3. Existence of prior dispute:
The respondent claimed a prior dispute existed, citing a vernacular letter dated 01.03.2016. However, the tribunal found no evidence that the letter was received by the petitioner. The petitioner provided an affidavit from the courier agency confirming that no such letter was sent on the claimed date. The tribunal concluded that the letter was fabricated and that the respondent failed to prove the existence of a prior dispute.

4. Admission of the petition and declaration of moratorium:
The tribunal admitted the petition and declared a moratorium under Section 14 of the Code. The moratorium prohibits the institution or continuation of suits, transferring or disposing of assets, and actions to foreclose or recover property. The tribunal appointed Mr. Pinakin Surendra Shah as the Interim Insolvency Resolution Professional (IRP) and directed him to make a public announcement of the initiation of the Corporate Insolvency Process and call for submission of claims under Section 15 of the Code. The order of moratorium will remain effective until the completion of the corporate insolvency resolution process or until a resolution plan is approved or an order for liquidation is passed.

Conclusion:
The tribunal found the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, to be maintainable, with valid service of demand notice and no prior dispute. The petition was admitted, and a moratorium was declared, with the appointment of an IRP to proceed with the corporate insolvency resolution process.

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