Operational Creditor Seeks Insolvency Action for Unpaid Debt

The Operational Creditor filed an application under section 9 of the Insolvency & Bankruptcy Code, 2016 against the Corporate Debtor for default in payment. The debt was supported by evidence, and despite acknowledgment by the Corporate Debtor, the outstanding amount remained unpaid. The Applicant fulfilled procedural requirements, and the Bench admitted the application. Mr. Laxman Digambar Pawar was appointed as the Interim Resolution Professional. A moratorium was declared under section 14 of the I&B Code, ensuring the continuation of essential supplies. The resolution process was initiated, and relevant parties were promptly informed of the order.

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Issues:
1. Application under section 9 of Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP).
2. Default in payment by Corporate Debtor to Operational Creditor.
3. Compliance with procedural requirements under the I&B Code.
4. Appointment of Interim Resolution Professional.
5. Declaration of moratorium and consequential directions.

Analysis:
1. The application (CP 3641/2018) was filed by the Operational Creditor against the Corporate Debtor under section 9 of the Insolvency & Bankruptcy Code, 2016, seeking initiation of CIRP. The debt of Rs. 7,00,020 was claimed by the Applicant for transformer lamination supplied to the Corporate Debtor, supported by invoices and communication evidences.

2. The Applicant proved the default in payment by the Corporate Debtor through documents like demand notices, email conversations, and bank statements. Despite acknowledging the debt and assuring payment, the Corporate Debtor failed to clear the outstanding amount, justifying the initiation of CIRP.

3. The Applicant complied with the procedural requirements of the I&B Code, including filing necessary affidavits, serving court notices, and demonstrating that the Corporate Debtor did not raise any objections or disputes regarding the debt. The Bench found the application complete and admitted it for further proceedings.

4. The Bench noted that the Applicant did not propose the name of a registered Insolvency Resolution Professional (IRP) for appointment. Consequently, the Bench appointed Mr. Laxman Digambar Pawar as the Interim Resolution Professional to carry out the functions as per the I&B Code, ensuring compliance with IBBI regulations regarding the fee payable to IRP/RP.

5. The Bench declared a moratorium under section 14 of the I&B Code, prohibiting various actions against the Corporate Debtor, ensuring continuity of essential supplies, and specifying the effect of the moratorium until the completion of the resolution process or liquidation. The public announcement of the insolvency resolution process was ordered, and the Registry was directed to communicate the order promptly to all relevant parties.

This detailed analysis of the judgment highlights the key issues addressed by the Tribunal, including the application for CIRP, default in payment, procedural compliance, appointment of IRP, and the declaration of moratorium with consequential directions.

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