Debt admission triggers insolvency process. Interim Resolution Professional appointed.

The petition seeking initiation of Corporate Insolvency Resolution Process against the Respondent Corporate Debtor for non-payment of goods supplied was admitted by the Tribunal. The Corporate Debtor admitted the debt, leading to a moratorium under Section 14 of the Insolvency and Bankruptcy Code. Nirmal Kumar Bhesoni was appointed as the Interim Resolution Professional (IRP) to undertake necessary steps, including convening the Committee of Creditors meeting. The next hearing was scheduled for 20th November 2017 for further proceedings.

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Issues involved:
Initiation of Corporate Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code, 2016.

Analysis:
The petitioner, claiming to be an Operational Creditor, filed a petition seeking initiation of Corporate Insolvency Resolution Process against the Respondent Corporate Debtor for non-payment of goods supplied. The Operational Creditor invoiced a total sum of Rs. 9,26,22,218 from July 2014 to May 2017, with a remaining outstanding liability of Rs. 5,55,14,360. The petition was filed under Section 9 of the Code, following compliance with mandatory provisions, including notice issuance under Section 8(1) and submission of ledger accounts and balance confirmation statements. The Corporate Debtor, upon notice, admitted the amount due but cited inability to liquidate the financial debt due to business inactivity for the past 2 years.

Implications of Admission:
The Director of the Corporate Debtor, upon appearance, admitted the debt owed to the petitioner and did not contest the petition. With compliance with all requirements under the Code, including confirmation of the outstanding liability, the admission by the Corporate Debtor led to the petition being admitted by the Tribunal. Consequently, a moratorium was imposed under Section 14 of the Code, prohibiting various actions against the Corporate Debtor, including suits, asset disposal, and recovery actions.

Appointment of IRP:
The petitioner proposed Nirmal Kumar Bhesoni as the Interim Resolution Professional (IRP) for the case, who consented to the appointment and confirmed no disciplinary proceedings against him. The Tribunal confirmed Mr. Bhesoni as the IRP and directed him to undertake necessary steps under Sections 15, 17, and 18 of the Code, including convening the Committee of Creditors (COC) meeting and submitting a report within 30 days.

Next Hearing:
The case was scheduled to come up for further proceedings on 20th November 2017, indicating the timeline for the IRP to carry out the necessary actions as per the Code.

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