Tribunal admits CIRP petition, appoints IRP, declares moratorium, and emphasizes mandatory CIRP initiation upon debt/default proof.

The Tribunal admitted the petition for initiating Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, appointed an Interim Resolution Professional (IRP), and declared a moratorium. The Tribunal found the debt and default were established, dismissed the Corporate Debtor's defenses as unsubstantiated, and emphasized the mandatory nature of initiating CIRP once debt and default are proven under Section 9 of the Insolvency and Bankruptcy Code.

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Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP)
2. Existence of Debt and Default
3. Validity of Claims by Operational Creditor
4. Solvency of Corporate Debtor
5. Disputes and Defenses Raised by Corporate Debtor
6. Procedural Compliance and Legal Notices
7. Appointment of Interim Resolution Professional (IRP)
8. Declaration of Moratorium

Issue-wise Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
The Petitioner, an Operational Creditor, sought to initiate CIRP against the Corporate Debtor under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, due to a default amounting to Rs. 58,68,768 with 18% interest from 10.06.2015. The Tribunal admitted the petition, initiating CIRP against the Corporate Debtor.

2. Existence of Debt and Default:
The Petitioner was employed with the Corporate Debtor from 03.10.2008 to 10.06.2015, and his dues were not settled upon resignation. The Petitioner provided evidence, including emails from the Corporate Debtor's financial department, acknowledging the debt. The Tribunal found that the debt and default were not disputed by the Corporate Debtor.

3. Validity of Claims by Operational Creditor:
The Corporate Debtor contested the claims, arguing that the amounts were either discretionary or fabricated. However, the Tribunal noted that the Petitioner had provided substantial evidence, including certified statements and emails, supporting his claims. The Tribunal dismissed the Corporate Debtor's defenses as moonshine and unsupported by documents.

4. Solvency of Corporate Debtor:
The Corporate Debtor claimed to be solvent and capable of meeting its debts. However, the Tribunal observed that the Corporate Debtor faced multiple legal proceedings, including consumer complaints, cheque bounce cases, and criminal cases, indicating financial distress. The Corporate Debtor failed to provide balance sheets or other financial documents to substantiate its solvency claims.

5. Disputes and Defenses Raised by Corporate Debtor:
The Corporate Debtor raised several defenses, including allegations of conspiracy and misuse of company emails by former employees. The Tribunal found these defenses to be frivolous and unsupported by evidence. The Tribunal emphasized that the Corporate Debtor did not deny the debt in its initial communications and only raised disputes after receiving the demand notice.

6. Procedural Compliance and Legal Notices:
The Petitioner issued a legal notice to the Corporate Debtor, which was acknowledged but not responded to. The Tribunal noted that the Petitioner had previously filed a similar application, which was withdrawn due to technical objections. The present application followed the prescribed procedure under the IBC, and the Tribunal found no procedural lapses.

7. Appointment of Interim Resolution Professional (IRP):
The Tribunal appointed Mr. S. Viswanathan as the Interim Resolution Professional (IRP) to carry out the functions under the IBC. The IRP was directed to file progress reports and follow all extant provisions of the IBC and rules framed by the Insolvency and Bankruptcy Board of India (IBBI).

8. Declaration of Moratorium:
The Tribunal declared a moratorium, prohibiting the institution or continuation of suits or proceedings against the Corporate Debtor, transferring or disposing of assets, and terminating the supply of essential goods or services during the moratorium period. The moratorium would remain in effect until the completion of the CIRP.

Conclusion:
The Tribunal admitted the petition for initiating CIRP against the Corporate Debtor, appointed an IRP, and declared a moratorium, concluding that the debt and default were established, and the Corporate Debtor's defenses were unsubstantiated. The Tribunal emphasized the mandatory nature of initiating CIRP once debt and default are proven under Section 9 of the IBC.

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