Tribunal Admits Creditor's Insolvency Application, Initiates Corporate Resolution Process

The Tribunal admitted the Operational Creditor's application under Sections 8 and 9 of the Insolvency & Bankruptcy Code, 2016, initiating the Corporate Resolution Process for the Corporate Debtor due to non-payment of dues. A moratorium order was issued, prohibiting actions against the Corporate Debtor, and an Insolvency Resolution Professional was appointed to convene a meeting of the Committee of Creditors. The Tribunal found the application in compliance with the I&B Code, leading to the initiation of the Corporate Resolution Process.

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Issues:
Initiation of corporate insolvency resolution process under Section 9 of the Insolvency and Bankruptcy Code, 2016 for non-payment of dues by the Corporate Debtor.

Analysis:
The Operational Creditor, engaged in the manufacturing and sale of welding consumables, filed a petition under Section 9 of the Insolvency and Bankruptcy Code against the Corporate Debtor for non-payment of dues amounting to Rs. 7,70,196/- as of 05.02.2015, comprising principal amount and interest. The Corporate Debtor had failed to make any payment despite repeated reminders and a credit given to them. A Demand Notice was issued on 24.10.2017, but no response was received. The Operational Creditor had complied with all formalities to maintain the petition, including submitting necessary documents like invoices, demand notice, and a certificate from the bank confirming non-receipt of payments.

The Tribunal found that the Operational Creditor had supplied goods to the Corporate Debtor and raised invoices amounting to Rs. 4,55,907/-. Despite repeated requests and the issuance of a Demand Notice under Section 8(1) of the I&B Code, the Corporate Debtor did not make any repayments. The records indicated no evidence of repayment by the Corporate Debtor within the statutory period, allowing the Operational Creditor to file the application under Section 9 of the I&B Code. The Tribunal noted that all compliances required for admitting the application had been fulfilled by the Operational Creditor, and there was no proof of any pending dispute regarding the claim amount.

The Tribunal admitted the application under Sections 8 and 9 of the Insolvency & Bankruptcy Code, 2016, initiating the Corporate Resolution Process for the Corporate Debtor. A moratorium order was passed for a public announcement as per Section 13 of the IBC, 2016. The moratorium prohibited various actions against the Corporate Debtor, including instituting suits, transferring assets, and enforcing security interests. Essential goods or services supply to the Corporate Debtor could not be terminated during the moratorium period. The order of moratorium would be in effect until the completion of the Corporate Insolvency Resolution Process, subject to approval of a resolution plan or liquidation order by the Adjudicating Authority. An Insolvency Resolution Professional was appointed to ascertain creditors' particulars and convene a meeting of the Committee of Creditors for evolving a resolution plan.

In conclusion, the Tribunal found the Operational Creditor's application complete and in compliance with the requirements of the I&B Code, leading to the admission of the application and the initiation of the Corporate Resolution Process for the Corporate Debtor.

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