2017 (10) TMI 857 - Tri - Insolvency and Bankruptcy

Tribunal Admits Petition for Insolvency Resolution Process: Respondent in Clear Default

The Tribunal admitted the petition under Section 9 of the Insolvency and Bankruptcy Code, finding a clear default by the respondent, with no dispute ... Corporate insolvency process - lack of notice of dispute - whether there is any notice of the dispute on behalf of the Corporate Debtor received by the Operational Creditor? - Held that:- There is an affidavit dated 21.08.2017 by the Authorised Representative that the petitioner has not received the full payment despite the service of demand notice nor the Operational Creditor has received any notice of dispute from the Corporate Debtor. There is a clear default committed by the respondent and this fact has not even been disputed nor any response has been filed despite opportunity having been granted. No defect in the application has been found or pointed out and there is compliance of the mandatory requirements of Section 9 (3) (b) and (c) of the Code. The petitioner has delivered the invoices for payment to the Corporate Debtor. The petitioner has even filed a copy of the statement of the bank of account i.e. its financial institution HDFC maintaining the account of the petitioner. The petitioner has also proposed the name of the Insolvency Resolution Process Mr.Adesh Kumar Singla, who has given the written communication in Form 2 giving all the necessary particulars. That communication is found to be in order.In view of the above, the petition deserves to be admitted. Issues: Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating insolvency resolution process.Analysis:1. Jurisdiction and Background: The petitioner, an Operational Creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 against the respondent, a Corporate Debtor, seeking initiation of the insolvency resolution process. The petitioner company supplied products to the respondent, leading to an outstanding amount due. The respondent was incorporated in 2000 with its registered office in Ludhiana, falling under the territorial jurisdiction of the National Company Law Tribunal, Chandigarh.2. Debt and Demand: The petitioner maintained a running account of the respondent's transactions and outstanding dues, supported by invoices and ledger entries. Despite sending demand notices and invoices to the respondent, no payment was made within the stipulated time frame, and no notice of dispute was received from the respondent.3. Response of Corporate Debtor: The respondent, through its authorized representative, expressed the intention to pay the outstanding amount in installments due to financial constraints. However, the petitioner did not agree to this arrangement, leading to a dispute over the repayment terms.4. Legal Provisions and Compliance: The judgment referred to Section 9 of the Insolvency and Bankruptcy Code, outlining the conditions for initiating the insolvency resolution process. It highlighted the requirements for admitting or rejecting the application, emphasizing the need for complete applications, absence of repayment, delivery of invoices, and lack of dispute notices.5. Decision and Order: The Tribunal found a clear default by the respondent, with no response or dispute raised. The petitioner complied with the mandatory requirements of the Code, including delivering invoices and proposing an Insolvency Resolution Professional. Consequently, the petition was admitted, and the matter was listed for the formal appointment of the IRP on a specified date.In conclusion, the judgment analyzed the petition's legal grounds, debt details, compliance with statutory provisions, and the response of both parties, leading to the admission of the petition for initiating the insolvency resolution process against the respondent.