2019 (7) TMI 1637 - Tri - Insolvency and Bankruptcy

Court admits petition for corporate insolvency resolution process, appoints interim resolution professional

The petition for initiating the corporate insolvency resolution process (CIRP) against the corporate debtor was admitted. The moratorium was declared, and ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues or not - existence of debt and dispute or not - service of demand notice - whether the demand notice in Form No. 4 dated March 8, 2018 was properly served? - HELD THAT:- Vide Diary No. 1870 dated April 11, 2019 it is submitted that the demand notice dated March 8, 2019 was also served to the key managerial person of the corporate debtor vide e-mail dated March 9, 2018 with whom the operational creditor had repeated correspondence in relation to the related transaction. The copy of the e-mail has been filed as annexure A1 thereof. During the course of the hearing on July 19, 2019, it was stated by learned counsel for the operational creditor that the e-mail at page 7 of Diary No. 1870, dated April 11, 2019 did not bounce. Therefore, the service of the demand notice by the operational creditor is held to be a proper service. Whether the operational debt was disputed by the corporate debtor? - HELD THAT:- he demand notice in Form No. 4 issued on March 8, 2018 was properly served. We have also discussed above that Mr. Rahul Gupta, authorized representative of the financial creditor has filed an affidavit dated May 1, 2018 stating that no reply was given by the corporate debtor to the demand notice and that there is no dispute of unpaid operational debt pending between the parties against the claim - It is found that despite service of notice for hearing on December 13, 2018 there was no representation from the corporate debtor. Therefore, any dispute with regard to the operational debt is not proved. Thus, the demand notice in Form No. 4 dated March 8, 2018 was properly delivered by the operational creditor and that no reply thereof was furnished by the corporate debtor and no pre-existing dispute is also proved. No interim resolution professional has been proposed - In view of the satisfaction of the conditions provided for in section 9(5)(i) of the Code, the petition is admitted for initiation of the CIRP process in the case of the corporate debtor M/s. Siwana Solar Power Pvt. Ltd. and direct moratorium and appointment of the interim resolution professional. Petition admitted - moratorium declared. Issues Involved:1. Jurisdiction of the Tribunal2. Existence of Operational Debt3. Proper Service of Demand Notice4. Dispute of Operational Debt5. Compliance with Section 9(5)(i) of the Insolvency and Bankruptcy Code, 20166. Declaration of Moratorium7. Appointment of Interim Resolution ProfessionalDetailed Analysis:1. Jurisdiction of the Tribunal:The registered office of the corporate debtor is located at Plot No. 109, Sector-27/28, Hissar HR, 125005, which falls under the jurisdiction of the Chandigarh Bench of the National Company Law Tribunal (NCLT). This was confirmed by the master data at page 36 of the petition and noted in the order dated October 26, 2018.2. Existence of Operational Debt:The operational creditor was approached by the corporate debtor and awarded a work order for the supply, commissioning, and service of a Solar Power Project. An EPC agreement dated May 1, 2014, was entered into for the project execution. Two invoices dated January 31, 2015, amounting to Rs. 28,45,00,000, and additional security charges of Rs. 73,682 were issued, totaling Rs. 28,45,73,682. Payments amounting to Rs. 25,63,24,719 were received, with the last payment of Rs. 2,00,000 received on July 25, 2016. The total amount of debt claimed is Rs. 2,82,48,963 along with interest at 18% per annum.3. Proper Service of Demand Notice:A demand notice in Form No. 4 was issued on March 8, 2018, and served by speed post on March 13, 2018. Additionally, the notice was served to the key managerial person of the corporate debtor via email on March 9, 2018. The email did not bounce, confirming proper service of the demand notice.4. Dispute of Operational Debt:No reply was given by the corporate debtor to the demand notice, and no dispute of unpaid operational debt was raised. Despite being duly served, there was no representation from the corporate debtor on the hearing dates of December 13, 2018, January 8, 2019, February 4, 2019, February 25, 2019, and July 19, 2019. Thus, no dispute regarding the operational debt was proved.5. Compliance with Section 9(5)(i) of the Insolvency and Bankruptcy Code, 2016:The application filed in Form No. 5 was found to be complete. There was an unpaid operational debt of Rs. 2,82,48,963 along with interest at 18% per annum. The financial statements and a CA certificate confirmed the debt outstanding. The demand notice was properly delivered, and no reply was received, proving no pre-existing dispute. No interim resolution professional was proposed by the operational creditor.6. Declaration of Moratorium:The Tribunal declared a moratorium under section 14(1) of the Code, which includes the suspension of suits or proceedings against the corporate debtor, prohibition of transferring or disposing of any assets, and actions to foreclose or recover any property. The supply of essential goods or services to the corporate debtor shall not be terminated during the moratorium period.7. Appointment of Interim Resolution Professional:The Tribunal appointed Mr. Mukesh Kumar as the interim resolution professional, as per the panel approved for the NCLT Chandigarh Bench. His credentials were verified, and there was nothing adverse against him. The interim resolution professional is to exercise all powers vested under the Code and perform duties, including taking control and custody of the corporate debtor's assets. He is directed to make a public announcement, constitute a committee of creditors, and submit regular progress reports to the Tribunal.Conclusion:The petition for initiating the corporate insolvency resolution process (CIRP) against the corporate debtor was admitted. The moratorium was declared, and Mr. Mukesh Kumar was appointed as the interim resolution professional. The operational creditor is to deliver a copy of the order to the interim resolution professional, and the Registry is directed to send a copy of the order to his email address forthwith. The order was pronounced in open court on July 26, 2019.