2018 (8) TMI 1986 - Tri - Insolvency and Bankruptcy

Operational Creditor Petition Leads to Corporate Insolvency Resolution Process.

S.K. Construction Versus Kohinoor Power Private Limited.

The petition under section 9 of the Insolvency & Bankruptcy Code, 2016 was filed by an Operational Creditor against a Corporate Debtor for outstanding ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- Upon receipt of notice of this petition, the Corporate Debtor appeared. In spite of opportunity given to the Corporate Debtor, they did not file any affidavit- in-reply. The Ld. Counsel for the Corporate Debtor made a statement that the Corporate Debtor is not in a position to pay the debt. The Authority may decide the matter on its own merit - Since the Corporate Debtor did not dispute the fact that they are liable to pay a sum of ₹ 5,59,198/- to the Operational Creditor and that they did not pay the same, nothing left for this Authority to decide the petition but to admit the same. It is not in dispute that notice under section 8 of Code was given to the Corporate Debtor. Operational Creditor produced on record the bills on which his claim is based. He also produced on record the certificate issued by his Banker stating that the amount claimed herein has not been received in his account. This fact is otherwise not in dispute. There is no disciplinary proceeding pending against the proposed IRP, whose name is suggested herein by the Operational Creditor. Petition admitted - moratorium declared. Issues:1. Filing of petition under section 9 of the Insolvency & Bankruptcy Code, 2016 by Operational Creditor against Corporate Debtor for outstanding debt.2. Failure of Corporate Debtor to pay despite demand notice under section 8 of I&B Code.3. Admission of petition by the Authority due to non-dispute by Corporate Debtor.4. Appointment of Insolvency Resolution Professional and initiation of Corporate Insolvency Resolution Process.5. Declaration of moratorium under Sections 13 and 14 of the IBC, 2016.6. Prohibitions and provisions under the moratorium period.7. Continuation and completion of Corporate Insolvency Resolution Process.8. Appointment of Interim Resolution Professional and convening of Committee of Creditors.9. Timeline for finalizing Resolution Plan and progress reporting.Detailed Analysis:1. The petition was filed under section 9 of the Insolvency & Bankruptcy Code, 2016 by the Operational Creditor against the Corporate Debtor, seeking to initiate the Corporate Insolvency Resolution Process due to the Corporate Debtor's inability to pay an outstanding debt despite demand.2. The Operational Creditor provided details of services rendered to the Corporate Debtor in 2015, amounting to a sum of Rs. 5,59,198, which remained unpaid despite repeated demands and a formal notice under section 8 of the I&B Code.3. The Corporate Debtor, upon receiving the petition, did not dispute the debt or make any payments, leading the Authority to admit the petition as the Corporate Debtor acknowledged the liability to pay the outstanding amount.4. Following the admission of the petition, the Operational Creditor proposed the appointment of an Insolvency Resolution Professional (IRP) to oversee the resolution process, ensuring no conflict of interest or pending disciplinary proceedings against the proposed IRP.5. The Authority issued an order admitting the application under Section 9 of the IBC, 2016, initiating the Corporate Insolvency Resolution Process for the Corporate Debtor, and declaring a moratorium to prevent certain actions against the Corporate Debtor during the resolution process.6. The moratorium under Sections 13 and 14 of the IBC, 2016 prohibited various actions, including legal proceedings, asset transfers, enforcement of security interests, and termination of essential services during the resolution period.7. The order specified the continuation of the Corporate Insolvency Resolution Process, with provisions for the appointment of an Interim Resolution Professional to manage creditor details and convene a Committee of Creditors for developing a resolution plan within a specified timeline.8. The Interim Resolution Professional was tasked with convening meetings, finalizing the resolution plan within 105 days, and submitting the plan for approval by the Committee of Creditors, ensuring compliance with the amended provisions of the I&B Code.9. The Authority directed the registry to communicate the order to all relevant parties, including the Operational Creditor, Corporate Debtor, and Interim Resolution Professional, and scheduled a progress report filing for a future date to monitor the resolution process.