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Company petition admitted for insolvency proceedings under IBC - interim resolution professional appointed The court admitted the company petition under section 9 of the Insolvency & Bankruptcy Code, 2016, initiating the Corporate Insolvency Resolution ...
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Company petition admitted for insolvency proceedings under IBC - interim resolution professional appointed
The court admitted the company petition under section 9 of the Insolvency & Bankruptcy Code, 2016, initiating the Corporate Insolvency Resolution Process against the Corporate Debtor. An Interim Resolution Professional was appointed, and a moratorium under section 14 of the IBC was declared. The management of the Corporate Debtor vested in the IRP/RP, and the Operational Creditor was directed to deposit a sum for expenses. The Registry was tasked with promptly communicating the order to relevant parties, and the Registrar of Companies was instructed to update the Corporate Debtor's Master Data with a compliance report due within seven days.
Issues: Company petition under section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) for initiation of Corporate Insolvency Resolution Process (CIRP) against a Corporate Debtor.
Analysis: 1. Jurisdiction: The Corporate Debtor is a private company incorporated under the Companies Act, 1956, in Maharashtra, Mumbai. The Bench has jurisdiction to deal with the petition.
2. Default: The Operational Creditor filed the petition due to the Corporate Debtor's failure to pay a principal amount of Rs. 14,78,496 and interest of Rs. 5,83,297, totaling Rs. 20,61,793 as of the default date.
3. Operational Creditor's Case: The Operational Creditor provided goods to the Corporate Debtor under five invoices totaling Rs. 24,78,496. The Corporate Debtor agreed to pay within 10 days or incur interest at 24% p.a. A partial payment of Rs. 10,00,000 was made, leaving a principal amount of Rs. 14,78,496 due along with interest.
4. Demand Notice: A Demand Notice was served on the Corporate Debtor in April 2018, but no reply was received.
5. Admission of Petition: The Bench found the application complete and established the debt owed by the Corporate Debtor. The default was proven, meeting the requirements of the IBC for admission of the petition.
6. Order: The Bench admitted the petition, initiating the CIRP against the Corporate Debtor. An Interim Resolution Professional (IRP) was appointed, and a moratorium under section 14 of the IBC was declared, affecting various actions related to the Corporate Debtor's assets and legal proceedings.
7. Moratorium: The moratorium shall be in effect until the completion of the CIRP, approval of a resolution plan, or liquidation of the Corporate Debtor. Essential supplies to the Corporate Debtor shall continue during this period.
8. Management during CIRP: The management of the Corporate Debtor shall vest in the IRP/RP, and officers/managers must provide necessary documents and information to the IRP.
9. Expenses and Communication: The Operational Creditor must deposit a sum for expenses, and the Registry is directed to communicate the order to relevant parties promptly.
10. Compliance: The Registrar of Companies, Maharashtra, Mumbai, must update the Corporate Debtor's Master Data, and a compliance report is required within seven days.
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