Adjudication admits insolvency petition, deems dishonoured cheque admission of debt, initiates resolution process

The adjudicating authority admitted the insolvency petition under Section 9 of The Insolvency and Bankruptcy Code, 2016, finding the operational debt due and payable. The respondent's dishonoured cheque was deemed an admission of debt, leading to the initiation of the insolvency resolution process. A moratorium was declared under Section 13 of the Code, appointing an Interim Resolution Professional to manage the resolution process. The order prohibited actions against the corporate debtor and directed the IRP to initiate the corporate insolvency resolution process, ensuring regulatory compliance and protection of stakeholders' interests.

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Issues Involved:
Admission of insolvency petition under Section 9 of The Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:
1. Operational Creditor's Petition: The operational creditor filed a petition under Section 9 of The Insolvency and Bankruptcy Code, 2016, stating that the respondent company is in default of a substantial amount, including interest. The operational creditor highlighted that despite reminders and a demand notice, the respondent failed to pay the outstanding dues.

2. Submission of Documents: The operational creditor submitted various documents to support the claim, such as invoices, demand notice, statement of accounts, bank statement, authority letter, affidavit, and consent letter of the Interim Resolution Professional (IRP) in form No. 2.

3. Non-Compliance by Respondent: The respondent, despite multiple opportunities, did not file a reply and sought adjournments on the pretext of settlement. The respondent's cheque issued for settlement was dishonoured, indicating non-compliance with the payment obligations.

4. Judicial Precedent Consideration: Referring to the case of Mobilox Innovative Private Limited vs. Kirusa Software Private Limited, the adjudicating authority assessed the conditions required for admitting an application under Section 9 of the Act, emphasizing the need to establish the existence of operational debt, due payment, and absence of dispute.

5. Decision and Order: The adjudicating authority found the operational debt due and payable, meeting the requirements of the Insolvency & Bankruptcy Code. The authority noted the dishonoured cheque as an admission of debt by the respondent, leading to the initiation of the insolvency resolution process. The authority declared a moratorium under Section 13 of the Code and appointed an Interim Resolution Professional (IRP) to manage the resolution process.

6. Moratorium and Direction: The order declared a moratorium, prohibiting various actions against the corporate debtor, and directed the IRP to make a public announcement initiating the corporate insolvency resolution process. The order specified the effect and duration of the moratorium until the completion of the resolution process or liquidation, as applicable.

7. Appointment of IRP: The authority appointed Mr. Paresh Chandulal Mehta as the Interim Resolution Professional, following the proposal by the operational creditor. The communication of the order was directed to the applicant, corporate debtor, and the appointed IRP for necessary action.

8. Regulatory Compliance: The registry was instructed to inform the Registrar of Companies about the corporate insolvency resolution process to prevent any proceedings for striking off the respondent company's name, ensuring the protection of stakeholders' interests during the resolution process.

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