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of <h1>Company Petition under Insolvency Code leads to CIRP initiation for non-payment.</h1> The Company Petition filed under section 9 of the Insolvency & Bankruptcy Code sought to initiate Corporate Insolvency Resolution Process against a ... 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 ₹ 6,97,915/-. The invoices for the period of 11.06.2016 to 22.08.2016 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 date of default is 10.10.2016. 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 in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, 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 - From the material available on record, apparently there is nothing that would point to the petition being collusive in nature. Petition admitted - moratorium declared. Issues:- Company petition filed under section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC) seeking Corporate Insolvency Resolution Process (CIRP) against a private company for non-payment.- Existence of debt and default by the corporate debtor.- Acknowledgment of debt by the corporate debtor.- Admission of the petition and initiation of CIRP.- Moratorium under section 14 of the IBC.- Appointment of Interim Resolution Professional (IRP).- Management of the corporate debtor during the CIRP.- Deposit by the operational creditor for expenses.- Communication of the order to relevant parties.Company Petition under IBC:The case involved a Company Petition filed under section 9 of the IBC seeking to initiate Corporate Insolvency Resolution Process against a private company for non-payment of a significant sum. The Operational Creditor, a proprietorship concern, claimed that the Corporate Debtor failed to make payments as per invoices, leading to a total debt of Rs. 9,37,993.00. The petition was supported by evidence such as invoices and bank statements, highlighting the default date as 10.10.2016.Existence of Debt and Default:The Operational Creditor provided detailed evidence of the debt, including invoices and cheques issued by the Corporate Debtor, which were dishonored. The Corporate Debtor acknowledged the liability but expressed inability to make the payment. The Tribunal found that there was no pre-existing dispute regarding the unpaid operational debt, establishing the debt and default clearly.Acknowledgment of Debt:The Corporate Debtor's acknowledgment of the debt was evident from the cheques issued for a partial amount of the outstanding dues. The Corporate Debtor did not contest the petition, further confirming the acknowledgment of the liability towards the Operational Creditor.Admission of the Petition and Initiation of CIRP:After hearing both sides and reviewing the records, the Tribunal found the petition to be complete and in compliance with the law. The default amount exceeded the minimum stipulated under the IBC, leading to the admission of the petition and the initiation of Corporate Insolvency Resolution Process against the Corporate Debtor.Moratorium and Related Orders:The Tribunal ordered a moratorium under section 14 of the IBC, affecting various actions related to the Corporate Debtor's assets and legal proceedings. Essential services to the Corporate Debtor were to continue during the moratorium, with specific provisions outlined by the Central Government. The moratorium was to remain in effect until the completion of CIRP or other specified events.Appointment of Interim Resolution Professional (IRP):As the Operational Creditor did not propose an IRP, the Tribunal ordered the appointment of an IRP compliant with the relevant regulations. The IRP was tasked with managing the affairs of the Corporate Debtor during the CIRP period, with specific responsibilities outlined by the IBC.Deposit for Expenses and Communication of Orders:The Operational Creditor was directed to deposit a sum for expenses related to public notices and claims, subject to approval by the Committee of Creditors. The Tribunal also ordered the immediate communication of the order to all relevant parties and authorities, ensuring compliance and necessary updates.This detailed analysis of the judgment highlights the key legal aspects and decisions made by the Tribunal in the case, ensuring a comprehensive understanding of the issues involved and the resulting orders.
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