Tribunal Admits Insolvency Petition Against Addinath Rubbers Private Limited The Tribunal admitted the petition for initiation of the Corporate Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code ...
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Tribunal Admits Insolvency Petition Against Addinath Rubbers Private Limited
The Tribunal admitted the petition for initiation of the Corporate Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code against the Corporate Debtor, Addinath Rubbers Private Limited. Moratorium was declared, appointing an Interim Resolution Professional to manage the affairs of the Corporate Debtor. The Corporate Debtor's partial payment reduced the outstanding debt, and no dispute was found regarding the debt and default. The Tribunal directed cooperation with the Interim Resolution Professional for asset management and claims submission, with regular progress reports to be provided to the Tribunal.
Issues: Initiation of Corporate Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code, 2016.
Analysis: The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by an Operational Creditor against a Corporate Debtor for initiating the Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor was engaged in the manufacturing of rubber products and had entered into an agreement with the Operational Creditor for the sale of raw materials. Invoices were issued from 10.05.2016 to 30.10.2018, totaling a debt of Rs. 55,28,133. A demand notice was issued on 31.10.2018, and a partial payment of Rs. 90,000 was made by the Corporate Debtor after the notice.
The Corporate Debtor denied the liability in its reply to the demand notice, citing ongoing settlement issues with its bank. The Operational Creditor verified the contents of the petition through affidavits and proposed an Interim Resolution Professional. The respondent-Corporate Debtor failed to file a reply despite being granted time to do so. The respondent later admitted to defaulting on the payment, indicating no dispute regarding the debt and default by the Corporate Debtor.
The Tribunal referenced the case of Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited, emphasizing the need for a plausible contention requiring further investigation to reject a dispute. The Operational Creditor provided evidence of the unpaid debt through ledger statements and accounts. The Corporate Debtor's partial payment reduced the outstanding debt to Rs. 54,38,133. The Tribunal found no dispute as to the debt and default by the Corporate Debtor.
The Tribunal admitted the petition for initiation of the CIRP process against the Corporate Debtor, Addinath Rubbers Private Limited. Moratorium was declared, suspending legal actions against the Corporate Debtor and appointing an Interim Resolution Professional. The Interim Resolution Professional was directed to manage the affairs of the Corporate Debtor, prepare asset inventories, and conduct public announcements for claims submission. The Corporate Debtor and its management were instructed to cooperate with the Interim Resolution Professional, who would provide regular progress reports to the Tribunal.
The Tribunal communicated the order to both parties and directed the petitioner to deliver a copy to the Interim Resolution Professional. The Registry was tasked with sending a copy of the order to the Interim Resolution Professional via email.
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