Operational debt and default established for insolvency admission, triggering moratorium and appointment of an interim resolution professional.

An operational creditor's Section 9 application under the Insolvency and Bankruptcy Code was treated as complete because unpaid invoices, a confirmed balance of accounts, and a valid demand notice established default; the application was also within limitation and the corporate debtor remained ex parte, so admission was ordered. On admission, the statutory consequences followed: moratorium under Section 14 was declared, its prohibitions were set out, and an interim resolution professional was appointed from the regulator's panel where no proposed professional had been named. The matter accordingly proceeded as corporate insolvency resolution process against the respondent.

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Issues: (i) Whether the operational creditor established the existence of operational debt and default so as to warrant admission of the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016. (ii) Whether, upon admission, moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 was required to be declared and an interim resolution professional appointed.

Issue (i): Whether the operational creditor established the existence of operational debt and default so as to warrant admission of the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The claim was founded on unpaid invoices, a confirmed balance of accounts, and a demand notice issued under the Code. The application was found to be within limitation, the corporate debtor remained ex parte, and the record was treated as sufficient to establish default and satisfaction of the statutory requirements for a section 9 application.

Conclusion: The petition was held to be complete, default was established, and admission under Section 9(5) was ordered in favour of the petitioner.

Issue (ii): Whether, upon admission, moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 was required to be declared and an interim resolution professional appointed.

Analysis: On admission of the petition, the statutory consequences under the Code followed. Moratorium was declared, the prohibitory effects of Section 14 were set out, and in the absence of a proposed resolution professional, an interim resolution professional was appointed from the panel maintained by the regulator.

Conclusion: Moratorium was declared and an interim resolution professional was appointed to conduct the corporate insolvency resolution process.

Final Conclusion: The application succeeded and the corporate insolvency resolution process against the respondent was initiated with consequential moratorium and insolvency administration directions.

Ratio Decidendi: Where the operational creditor proves default, compliance with the statutory pre-admission requirements, and the application is otherwise complete and within limitation, the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 is liable to be admitted and the statutory consequences under Section 14 follow.

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