2020 (2) TMI 912 - Tri - Insolvency and Bankruptcy

Successful Company Petition under IBC: CIRP Initiated, Moratorium Imposed

The Company Petition under section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) filed by Arihant Packers against a private limited company for ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- There is no pre-existing dispute regarding the unpaid operational debt, being the principal amount of ₹ 4,39,963. The invoices for the period of 18.11.2016 to 26.12.2016 were raised upon the Corporate Debtor on a running account basis, but the outstanding dues were not paid. Thus, the existence of debt and default is established - The application made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is more than minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, as the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this petition and orders initiation of CIRP against the Corporate Debtor. Petition admitted - moratorium declared. Issues:Company petition under section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) seeking Corporate Insolvency Resolution Process (CIRP) initiation against a private limited company for unpaid dues.Detailed Analysis:1. Jurisdiction and Background:The Company Petition was filed under section 9 of the IBC by Arihant Packers against the Corporate Debtor, a private limited company, for failing to make a payment of a specific sum. The Corporate Debtor was incorporated under the Companies Act, 1956, with jurisdiction falling under the Mumbai Registrar of Companies.2. Unpaid Invoices and Demand Notice:The Operational Creditor supplied various goods to the Corporate Debtor, resulting in unpaid invoices totaling to a significant amount. A Demand Notice was served on the Corporate Debtor, prompting partial payments but leaving a substantial balance outstanding.3. Legal Compliance and Affidavit Submission:The Operational Creditor complied with the legal requirements under the IBC, submitting necessary documents, including a certificate from a bank certifying the absence of credit deposits from the Corporate Debtor. An affidavit was also presented confirming non-payment and absence of disputes.4. Debt and Default Establishment:The Operational Creditor demonstrated the existence of debt and default by detailing the invoices and payments made by the Corporate Debtor. The outstanding amount was clearly established, leading to the conclusion of debt default.5. Admission of Petition and Moratorium Order:The Adjudicating Authority admitted the petition and ordered the initiation of CIRP against the Corporate Debtor. A moratorium was imposed under section 14 of the IBC, affecting various legal actions against the Corporate Debtor and ensuring the continuation of essential services during the process.6. Appointment of IRP and Management during CIRP:As the Operational Creditor did not propose an Interim Resolution Professional (IRP), the Adjudicating Authority would appoint one. The IRP would manage the Corporate Debtor during the CIRP period, with specific directions regarding the transfer of management and provision of necessary information.7. Financial Deposits and Communication:The Operational Creditor was directed to deposit a specific amount with the IRP for expenses related to public notices and claims. The Registry was tasked with communicating the order to relevant parties promptly, ensuring compliance and updating of necessary records.This detailed analysis covers the key aspects of the judgment, outlining the legal proceedings, compliance with the IBC, establishment of debt default, and the subsequent orders issued by the Adjudicating Authority.