2020 (8) TMI 878 - Tri - Insolvency and Bankruptcy

Tribunal admits application under Insolvency and Bankruptcy Code, declares moratorium, appoints Resolution Professional

The Tribunal admitted the Operational Creditor's application under section 9 of the Insolvency and Bankruptcy Code, 2016, against the Corporate Debtor for ... Seeking order of injunction restraining the Corporate Debtor and/or its Officers and/or any third party from dealing/ alienating / transferring/ selling the assets of the Corporate Debtor during pendency of this application - time limitation - HELD THAT:- The OC has succeeded in placing all the relevant documents so as to comply with the requirements to be meted out u/s.9 (3) of the Code. Pressing for an order of injunction in a case of this nature does not by itself indicate that this application was filed by the OC for recovery of money found admittedly due to the OC. Therefore the submission that the intention on the side of the OC is not to initiate CIRP but to initiate recovery proceedings is devoid of any merit. The application therefore is perfectly maintainable u/s. 9 of the Code. The admitted correspondence letters (Annexure- G) exchanged in between the OC and the CD, proves that the amount as claimed by the OC is due and payable by the CD. The claim of the OC is also not barred by limitation - the application is complete, there is no payment of unpaid operational debt despite receipt of the demand notice, and there is no disciplinary proceeding pending against the insolvency resolution professional. Application admitted - moratorium declared. Issues:Application under section 9 of the Insolvency and Bankruptcy Code, 2016 for non-payment by the Corporate Debtor to the Operational Creditor.Detailed Analysis:1. The Operational Creditor (OC) filed an application against the Corporate Debtor (CD) for non-payment, seeking an order of injunction to prevent asset transfer by the CD.2. Due to disruptions caused by the Covid-19 pandemic, the hearing was conducted via video conference. The CD argued against granting an injunction, claiming the OC was using coercive tactics for recovery.3. The OC provided evidence of supplying marble slabs to the CD for a hotel project, with payments remaining due. The CD acknowledged the debt but cited financial constraints for non-payment.4. Despite multiple requests, the CD failed to pay the outstanding amount, acknowledging the debt in correspondence. The OC issued a demand notice under the IBC, which was replied to by the CD seeking more time for payment.5. The CD's attempts to arrange funds were unsuccessful, leading to non-payment. The CD denied asset transfer and argued against the application as a recovery proceeding.6. The Tribunal found the OC had met all requirements under section 9(3) of the Code, with no merit in the CD's argument against the application.7. The correspondence between the OC and CD, along with supporting documents, proved the debt was due and not barred by limitation.8. The Tribunal admitted the application under section 9 of the Code, declaring a moratorium and initiating the Corporate Resolution Process against the CD.9. The moratorium prohibited suits against the CD, asset transfer, and enforced the supply of essential goods/services. An Interim Resolution Professional was appointed to manage the process.10. The Tribunal directed the IRP to conduct the Corporate Insolvency Resolution Process within the prescribed timeline, convene a meeting of creditors, and identify a resolution applicant.11. The Registry was instructed to communicate the order to all parties, with subsequent progress reports required. Certified copies of the order were to be issued upon formalities' compliance.