2018 (1) TMI 952 - Tri - Insolvency and Bankruptcy

Tribunal admits insolvency petition against company for non-payment: Interim Resolution Professional appointed

Maharashtra Tourism Development Corporation Versus Luxury Train Private Limited

The Tribunal admitted the insolvency application under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed by a government-owned concern against ... Corporate insolvency proceedings - 'existence of dispute' - Held that:- Operational Creditor is a person to whom operational debt is owed and includes any person to whom such debt has been assigned or transferred. The definition of Operational Creditor is not exhaustive but illustrative. It is capable of covering those heads which are not specifically mentioned in the definition. The definition of operational debt postulates that it is a claim in respect of the provision of ‘goods’ or ‘services’ including employment etc. A perusal of Annexure P-4 to P-6 suggests beyond doubt that the work i.e. tour operated by the respondent company fulfils the requirement of word i.e. ‘services’ as defined in Section 5(21) of the Code. Therefore, ‘Operational Creditor’ fulfils and comes under the purview of aforesaid Sections. Corporate Debtor has committed default and the amount of ₹ 20,07,53,000/- has remained unpaid since 15.02.2015. For extinguishing such liability to some extent Corporate Debtor had issued various cheques in favour of ‘Operational Creditor’ which were returned back with the endorsement of ‘insufficient funds’ and at present proceedings under Section 138 of Negotiable Instrument Act are in progress before the learned Metropolitan Magistrate, Mumbai. Suit for recovery of money under Order XXXVII of the Code of Civil Procedure, 1908 is also pending before the Hon’ble High Court of Bombay. Thus, there is default committed on the part of the Corporate Debtor within the meaning of Section 3(12) read with Section 4 and Section 9(1) of the Code, 2016. Operational Creditor has also proposed the name of Interim Insolvency Professional namely Mr. Manoj Kulshrestha, 4th Floor, CS 14, Ansal Plaza, Vaishali (Opp. Dabur), Ghaziabad, UP-201010, who has made declaration in accordance with the provisions of Rule 9 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. This petition is admitted and Mr. Manoj Kulshrestha is appointed as an Interim Resolution Professional. Issues:1. Application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016.2. Claim of being an 'Operational Creditor' against a 'Corporate Debtor'.3. Default in payment by the Corporate Debtor.4. Appointment of an Interim Resolution Professional.5. Declaration of moratorium under Section 14 of the Code.Analysis:1. The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, along with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The petitioner claimed to be an 'Operational Creditor' with the respondent being a 'Corporate Debtor'.2. The petitioner, a concern owned by the Government of Maharashtra, was engaged in tourism development and maintenance activities. The respondent, a company incorporated under the Companies Act, 1956, was involved in luxury train operations and tourism consultancy. The petitioner alleged non-payment of dues by the respondent, leading to financial disputes.3. The Corporate Debtor defaulted on payments amounting to Rs. 20,07,53,000/- since February 15, 2015. Various cheques issued by the respondent bounced due to insufficient funds. Legal actions, including proceedings under the Negotiable Instrument Act and a suit for recovery, were initiated against the Corporate Debtor.4. An Interim Resolution Professional, Mr. Manoj Kulshrestha, was appointed to oversee the insolvency resolution process. The professional was required to make a public announcement regarding the admission of the application and declare a moratorium under Section 14 of the Code, imposing restrictions on legal proceedings and asset disposal by the Corporate Debtor.5. The Tribunal directed the Interim Resolution Professional to diligently perform his duties as outlined in the Code, ensuring the preservation of the Corporate Debtor's assets and adherence to insolvency procedures. Cooperation from all involved parties was mandated, with provisions for legal action in case of non-compliance.This detailed analysis of the judgment highlights the key legal aspects and proceedings involved in the case, leading to the admission of the insolvency application and the subsequent appointment of an Interim Resolution Professional for the resolution process.