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Debt admission due to failure to respond to demand notice triggers moratorium for Corporate Debtor The petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor was admitted by the Tribunal as the Corporate ...
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Debt admission due to failure to respond to demand notice triggers moratorium for Corporate Debtor
The petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor was admitted by the Tribunal as the Corporate Debtor failed to respond to the demand notice, resulting in deemed admission of debts. An Interim Resolution Professional was appointed to manage the resolution process, and a moratorium was ordered under Section 13(1)(a) of the IB Code. The moratorium prohibits various actions against the Corporate Debtor and ensures uninterrupted essential goods and services supply. The order of moratorium will be in force until the completion of the Corporate Insolvency Resolution Process.
Issues: - Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process. - Admission of debts by the Corporate Debtor. - Appointment of Interim Resolution Professional. - Order of moratorium under Section 13(1)(a) of the IB Code.
Analysis: 1. The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor, Maruti Koatsu Cylinders Limited. The Operational Creditor sought to trigger the insolvency process due to unpaid debts amounting to Rs. 2,33,278/- plus interest at 20% per annum.
2. The CEO of the Corporate Debtor admitted the outstanding amount of Rs. 2,33,278/- and expressed no objection to the initiation of the Corporate Insolvency Resolution Process. The Operational Creditor had issued a statutory demand notice under section-8, providing supporting documents to establish the default by the Corporate Debtor.
3. The Tribunal found the filing of the petition in order, meeting the statutory requirements of the Code. As the Corporate Debtor failed to respond to the demand notice, it was deemed an admission of debts. Consequently, the petition was admitted for the commencement of the Corporate Insolvency Resolution Process against the Corporate Debtor.
4. An Interim Resolution Professional was appointed by the Adjudicating Authority to manage the resolution process. The appointed professional was directed to cause a public announcement of the initiation of the process and call for submission of claims as per the regulations.
5. A moratorium was ordered under Section 13(1)(a) of the IB Code, prohibiting various actions against the Corporate Debtor, including instituting suits, transferring assets, and enforcing security interests. Essential goods and services supply to the Corporate Debtor were to remain uninterrupted during the moratorium period, subject to certain exceptions notified by the Central Government.
6. The order of moratorium was to be in force from the date of the order until the completion of the Corporate Insolvency Resolution Process. The petition was disposed of with no order as to costs, and the order was to be communicated to all relevant parties involved in the proceedings.
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