Initiation of Insolvency Resolution Process under Section 9: Moratorium declared for corporate debtor

The Tribunal admitted the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, initiating the Insolvency Resolution Process against the corporate debtor for non-payment of outstanding dues. An Interim Insolvency Professional was appointed, and a moratorium was declared to facilitate the resolution process, including public announcements and submission of claims. The Tribunal's decision was based on the lack of dispute regarding the operational debt and the legal requirements under the Code, ensuring compliance and proper handling of the insolvency proceedings.

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Issues:
1. Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for triggering Insolvency Resolution Process against a corporate debtor.
2. Determination of operational debt and non-payment by the corporate debtor.
3. Examination of documentary evidence and existence of dispute between the parties.
4. Appointment of Interim Insolvency Professional and declaration of moratorium.

Issue 1: Application under Section 9 of the Insolvency and Bankruptcy Code, 2016
The application was filed by an operational creditor seeking to trigger the Insolvency Resolution Process against the corporate debtor for non-payment of outstanding dues. The applicant provided details of the parties involved, the nature of business, and the outstanding amount along with interest.

Issue 2: Determination of operational debt and non-payment by the corporate debtor
The applicant stated that the corporate debtor failed to make payments for invoices raised, leading to a total outstanding due. Despite attempts to recover the amount, including issuing a demand notice and legal notice for dishonored cheques, the debt remained unpaid. The respondent admitted liability for the outstanding dues in an email response.

Issue 3: Examination of documentary evidence and existence of dispute between the parties
The Tribunal found that the respondent did not raise any dispute against the claim and admitted liability for the outstanding dues. The Tribunal examined the requirements under Section 9 of the Act, including the existence of operational debt exceeding a specified amount and the absence of a dispute between the parties.

Issue 4: Appointment of Interim Insolvency Professional and declaration of moratorium
The Tribunal approved the appointment of an Interim Insolvency Professional and declared a moratorium to initiate the Corporate Insolvency Resolution Process. The order included directions to the Insolvency Resolution Professional for public announcements and submission of claims. The moratorium prohibited various actions against the corporate debtor and ensured the continuity of essential services during the process.

In conclusion, the Tribunal admitted the application under Section 9(5)(1) of the Code, initiated the Insolvency Resolution Process, appointed an Interim Insolvency Professional, and declared a moratorium to facilitate the resolution of the outstanding dues. The detailed analysis of the issues involved and the legal provisions applied ensured a comprehensive decision in line with the Insolvency and Bankruptcy Code, 2016.

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