Tribunal Admits Petition for Corporate Insolvency Resolution Process Due to Payment Default

The Tribunal admitted the petition for initiating the Corporate Insolvency Resolution Process against the Corporate Debtor for defaulting on a payment of Rs. 3,08,290. It appointed an Interim Resolution Professional and declared a Moratorium to oversee the resolution process until completion or liquidation of the Corporate Debtor.

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Issues:
1. Petition seeking Corporate Insolvency Resolution Process (CIRP) initiation against Corporate Debtor for default in payment.
2. Details of purchase orders, invoices, and outstanding balance.
3. Communication between Petitioner and Corporate Debtor regarding payment.
4. Demand notice issued under Section 8 of the Insolvency & Bankruptcy Code.
5. Lack of response from Corporate Debtor to demand notice.
6. Hearing and decision on the petition.
7. Appointment of Interim Resolution Professional and declaration of Moratorium.

Issue 1: Petition seeking Corporate Insolvency Resolution Process (CIRP) initiation against Corporate Debtor for default in payment.

The Petitioner, Onward Chemicals Private Limited, filed a company petition to commence the Corporate Insolvency Resolution Process (CIRP) against Supreme Bituchem India Private Limited, the Corporate Debtor, for defaulting on a payment of Rs. 3,08,290 along with interest. The petition invoked Sections 8 and 9 of the Insolvency & Bankruptcy Code, alleging non-payment by the Corporate Debtor.

Issue 2: Details of purchase orders, invoices, and outstanding balance.

The Petition highlighted that the Corporate Debtor had placed purchase orders with the Petitioner, who subsequently invoiced for a total of Rs. 12,16,580. Despite partial payments and adjustments, a balance of Rs. 3,08,290 remained unpaid by the Corporate Debtor. The material was delivered and accepted by the Corporate Debtor as per the purchase orders.

Issue 3: Communication between Petitioner and Corporate Debtor regarding payment.

The Petitioner sent multiple reminders via email to the Corporate Debtor requesting payment of the outstanding balance. The Corporate Debtor acknowledged the delay in payment due to unforeseen reasons but assured that the payment would be made shortly. However, no payment was received by the Petitioner despite assurances.

Issue 4: Demand notice issued under Section 8 of the Insolvency & Bankruptcy Code.

In response to the non-payment, the Petitioner issued a Demand Notice under Section 8 of the Code, demanding Rs. 6,08,209. Subsequently, the Corporate Debtor made a partial payment of Rs. 3,00,000, leaving the balance of Rs. 3,08,290 unpaid. The Corporate Debtor did not respond to the Demand Notice.

Issue 5: Lack of response from Corporate Debtor to demand notice.

The Corporate Debtor failed to respond to the Demand Notice issued by the Petitioner, indicating a lack of dispute regarding the outstanding amount. Despite being served the petition and informed of the hearing, the Corporate Debtor did not provide any representation during the proceedings.

Issue 6: Hearing and decision on the petition.

After reviewing the petition and hearing the submissions of the Petitioner's counsel, the Tribunal found that the Corporate Debtor was liable to pay the outstanding amount of Rs. 3,08,290 but had defaulted on the payment. Consequently, the Tribunal admitted the Petition for initiating the Corporate Insolvency Resolution Process.

Issue 7: Appointment of Interim Resolution Professional and declaration of Moratorium.

The Tribunal, satisfied with the application filed by the Operational Creditor in compliance with Sections 8 and 9 of the Insolvency & Bankruptcy Code, admitted the application. It declared a Moratorium, prohibiting legal actions against the Corporate Debtor and appointed Ms. Pinkush Jaiswal as the Interim Resolution Professional to oversee the resolution process until completion or liquidation of the Corporate Debtor.

This detailed analysis covers the key legal aspects and proceedings outlined in the judgment delivered by the National Company Law Tribunal, Mumbai Bench.

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