2019 (1) TMI 578 - Tri - Insolvency and Bankruptcy

Tribunal initiates CIRP against Corporate Debtor for non-response to Section 8 notice - IRP appointed

The Tribunal initiated Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor as they failed to respond to the Section 8 notice or ... Recovery of amount defaulted by the Corporate Debtor - dishonor of Cheque - Section 8 of Insolvency and Bankruptcy Code, 2016 - Held that:- In relation to the notice of the proceedings, it is evident that the Corporate Debtor is well aware of the proceedings pending before this Tribunal and despite the same has failed to defend its cause. Since a default as claimed by the petitioner arises out of the supply of materials/goods and also taking into consideration that no notice of dispute has been sent in relation to the Section 8, notice being the notice of default sent by the Operational Creditor to the Corporate Debtor, as well as no reply has been filled before this Tribunal and this tribunal having been satisfied with the claim made and as a default arises thereunder is constrained to initiate Corporate Insolvency Resolution Process (CIRP) as against the Corporate Debtor. Since the petitioner has not proposed any Insolvency Resolution Professional, Mr, Rajneesh Singhvi having IP registration No. IBBI/IPA- 001/IP-P0003712017-18110098 is appointed as IRP. The Operational Creditor to remit a sum of ₹ 2,00,0001- within two days from the date of receipt of this order to the IRP named as above. In view of the admission of this petition the moratoriurn as contemplated under Section 14 of IBC, 2016 be commenced. Application admitted. Issues:Petition by Operational Creditor under Sections 8 and 9 of IBC, 2016 for default in payment by Corporate Debtor.Analysis:1. The Operational Creditor filed a petition against the Corporate Debtor for defaulting on a sum of Rs. 47,89,021 along with claimed interest under the Insolvency and Bankruptcy Code, 2016 (IBC, 2016). The default arose from supplies made to the Corporate Debtor as per invoices raised between 29.06.2017 to 19.01.2018. Despite issuing Section 8 notice, no payment or dispute notice was received from the Corporate Debtor, leading to the petition under Section 9 of IBC, 2016.2. Initially, a director of the Corporate Debtor appeared before the Tribunal but lacked authorization, leading to an adjournment. Subsequently, no one appeared on behalf of the Corporate Debtor on the adjourned date, and the Tribunal proceeded with the case in their absence.3. After further adjournments, the matter was scheduled for an enquiry. The Corporate Debtor sought an adjournment through a letter, but the Tribunal proceeded with the enquiry as no formal application was made to set aside the previous order.4. During submissions, the Operational Creditor presented invoices, lorry receipts, and consignee inspection reports to prove the supply of goods to the Corporate Debtor. The balance due after accounting for payments received was highlighted, along with bank statements for verification.5. The Section 8 notice, served via postal and email communication, was returned as 'refused,' indicating acknowledgment. The Tribunal deemed the notice duly served, as the Corporate Debtor was aware of the proceedings but failed to respond or dispute the claim.6. As the Corporate Debtor failed to defend the claim or send a notice of dispute, the Tribunal initiated Corporate Insolvency Resolution Process (CIRP) against them. An Insolvency Resolution Professional (IRP) was appointed, and the Operational Creditor was directed to remit a specified sum to the IRP within two days to commence the moratorium under Section 14 of IBC, 2016.7. The powers of the Board of Directors of the Corporate Debtor were suspended, and the IRP was tasked with managing the company's affairs. Cooperation with the IRP was mandated from all involved parties, and regular status reports on the CIRP progress were required.8. The IRP was instructed to operate within the confines of IBC, 2016, and all parties were directed to comply with the orders. The communication of the order to relevant parties and authorities was mandated within a specified timeline, and the application was admitted by the Tribunal.