Tribunal Admits Corporate Insolvency Petition, Declares Moratorium

The Tribunal admitted the petition for initiating the Corporate Insolvency Resolution Process against ADI Automotives Private Limited, declaring a moratorium and appointing Mr. Sanjay Kumar Dewani as the Interim Resolution Professional. The Tribunal found jurisdiction with the Chandigarh Bench of the National Company Law Tribunal, established the existence of operational debt and default, confirmed completeness of the application under Section 9 of the Insolvency and Bankruptcy Code, and directed compliance with the moratorium provisions.

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Issues Involved:
1. Jurisdiction of the Tribunal
2. Existence of operational debt and default
3. Notice of dispute and reply by the corporate debtor
4. Completeness of the application under Section 9 of the Insolvency and Bankruptcy Code, 2016
5. Appointment of Interim Resolution Professional (IRP)
6. Declaration of Moratorium

Issue-wise Detailed Analysis:

1. Jurisdiction of the Tribunal:
The corporate debtor, incorporated as a Public Limited Company on 16.03.2004 under the Companies Act, 2013, has its registered office in Gurgaon, Haryana. Therefore, the jurisdiction for this case lies with the Chandigarh Bench of the National Company Law Tribunal (NCLT).

2. Existence of Operational Debt and Default:
The operational creditor has been supplying raw material to the corporate debtor since February 2010, maintaining a running account where payments were adjusted on a First in First Out (FIFO) basis. An outstanding amount of Rs. 4,85,239.34 with additional interest @ 12% per annum remained unpaid. The business relationship soured in 2017 due to delayed payments. Despite continued supplies based on verbal assurances, the corporate debtor failed to clear the outstanding dues. The last payment of Rs. 10 lacs was made on 28.03.2018. Detailed evidence, including unpaid invoices, bank statements, and ledger accounts, was provided.

3. Notice of Dispute and Reply by the Corporate Debtor:
A demand notice in Form No. 4 was issued on 17.04.2019, calling for payment within 10 days. The corporate debtor, in its reply dated 26.04.2019, denied the claimed amount, stating no adjudicated claim existed, thus no default. However, the corporate debtor later admitted its inability to repay the debts, requesting the petition's admission.

4. Completeness of the Application under Section 9 of the Insolvency and Bankruptcy Code, 2016:
The petition was filed by an authorized director of the operational creditor, with an affidavit verifying the contents. The proposed IRP, Mr. Sanjay Kumar Dewani, consented to his appointment, confirming no disciplinary proceedings against him. The Tribunal found the application complete, with no objections raised regarding its completeness.

5. Appointment of Interim Resolution Professional (IRP):
The Tribunal appointed Mr. Sanjay Kumar Dewani as the IRP, directing him to take control and custody of the corporate debtor's assets, prepare an inventory, and act in accordance with the Code and professional ethics. He was also instructed to make a public announcement, call for claims, constitute a committee of creditors, and submit regular progress reports.

6. Declaration of Moratorium:
The Tribunal declared a moratorium effective from the date of the order until the completion of the Corporate Insolvency Resolution Process (CIRP) or approval of the resolution plan or liquidation order. The moratorium includes:
- Suspension of suits or proceedings against the corporate debtor
- Prohibition on transferring or disposing of assets
- Restriction on recovering or enforcing security interests
- Continuation of essential goods or services supply

The Tribunal directed all parties to cooperate with the IRP and ensured communication of the order to both parties and the IRP.

Conclusion:
The Tribunal, satisfied with the conditions under Section 9(5)(i) of the Code, admitted the petition for initiating the CIRP against ADI Automotives Private Limited, declaring a moratorium and appointing Mr. Sanjay Kumar Dewani as the IRP.

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