Corporate Debtor's Insolvency Application Admitted, Resolution Process Initiated

The application under Section 9 of the Insolvency & Bankruptcy Code was admitted against the Corporate Debtor due to default in payment. The Operational Creditor's claim of Rs. 3,13,409/- was unpaid, leading to the initiation of the Corporate Insolvency Resolution Process. A moratorium was declared to protect the Corporate Debtor from legal actions, and an Interim Resolution Professional was appointed to manage the debtor's affairs. The Corporate Debtor's admission of inability to repay debts and failure to meet obligations resulted in the court's decision for insolvency proceedings to proceed.

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Issues:
Admission of application under Section 9 of the Insolvency & Bankruptcy Code, 2016; Default in payment by Corporate Debtor; Declaration of moratorium; Appointment of Interim Resolution Professional (IRP).

Admission of Application:
The Operational Creditor filed an application under Section 9 of the Insolvency & Bankruptcy Code, 2016 seeking admission to initiate Corporate Insolvency Resolution Process against the Corporate Debtor. The claimed outstanding amount was Rs. 3,13,409/- as of 30.09.2018. The Corporate Debtor failed to pay the debt. The Operational Creditor complied with all requirements, including issuing a Demand Notice under Section 8 of the Code. The Corporate Debtor admitted its inability to repay the debt, leading to the satisfaction of default by the Authority. The application was admitted, and the Corporate Insolvency Resolution Process was initiated.

Default in Payment:
The case involved an order placed by the Operational Creditor for paint coating services with the Corporate Debtor. Despite receiving an advance of Rs. 1,75,000/-, the Corporate Debtor canceled the order and assured to return the advance. Subsequent demands for repayment were unmet, leading to the Operational Creditor seeking legal recourse. The Corporate Debtor admitted its failure to perform obligations or repay the amount received, acknowledging the outstanding debt. The Corporate Debtor's inability to make payments in the near future was recognized, further supporting the admission of the application.

Declaration of Moratorium:
Upon admission of the application, the Tribunal declared a moratorium effective from the date of the order until the completion of the Corporate Insolvency Resolution Process. The moratorium prohibited various actions against the Corporate Debtor, including legal proceedings, asset transfers, and enforcement of security interests. Essential supplies to the Corporate Debtor were safeguarded during this period, ensuring continuity of operations.

Appointment of IRP:
Mr. J. Manivannan was appointed as the Interim Resolution Professional (IRP) as proposed by the Operational Creditor. The IRP was directed to take charge of the Corporate Debtor's management immediately, initiate the public announcement process, and call for creditor claims. The Directors and management associates of the Corporate Debtor were instructed to cooperate with the IRP in discharging his duties. The Registry was tasked with communicating the order to all relevant parties for compliance.

This detailed analysis summarizes the legal judgment involving the admission of an insolvency application, default in payment by the Corporate Debtor, declaration of moratorium, and appointment of an Interim Resolution Professional in a comprehensive manner, preserving key legal terminology and significant details from the original text.

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