Tribunal Initiates CIRP under I&B Code: Moratorium Declared, IRP Appointed

The Tribunal admitted the application under Section 9(5) of the I&B Code 2016, initiating the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor. A moratorium was declared, and Mr. P. Sriram was appointed as the Interim Resolution Professional (IRP) to manage the insolvency resolution process. The Tribunal's order and the moratorium details were communicated to the operational creditor, corporate debtor, and the Insolvency and Bankruptcy Board of India (IBBI).

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Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP)
2. Existence and Validity of Operational Debt
3. Delay in Project Completion and Payment Disputes
4. Appointment of Interim Resolution Professional (IRP)
5. Declaration of Moratorium

Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
The application was filed by the operational creditor under Section 9 of the Insolvency and Bankruptcy Code, 2016 (I&B Code 2016), seeking to initiate the CIRP against the corporate debtor. The operational creditor requested the Tribunal to declare a moratorium and appoint an interim resolution professional.

2. Existence and Validity of Operational Debt:
The operational creditor claimed a sum of Rs. 77,52,613 plus interest at 18% per annum from March 1, 2018, aggregating to Rs. 7,36,497, arising from a works contract for the sale and supply of HI-Mast sporting floodlights and related work at Jawaharlal Nehru Stadium, Coimbatore. The debt was supported by invoices and a demand notice issued on September 10, 2018, with no response or dispute from the corporate debtor.

3. Delay in Project Completion and Payment Disputes:
The corporate debtor contended that the floodlights were not ready by the agreed deadline, impacting their ability to host I-League matches with the required LUX levels for live TV coverage. The operational creditor argued that delays were due to late advance payments by the corporate debtor, which were made only on February 2, 2018. The operational creditor also provided evidence of a dishonoured cheque for Rs. 50,00,000 issued by the corporate debtor.

4. Appointment of Interim Resolution Professional (IRP):
The operational creditor proposed Mr. P. Sriram as the IRP, whose particulars were provided in the application. The Tribunal appointed Mr. P. Sriram as the IRP, with the Registration Number IBBI/IPA-002/IP-N00292/2017-18/10895, to take forward the CIRP of the corporate debtor.

5. Declaration of Moratorium:
The Tribunal declared a moratorium as per Section 14(1) of the I&B Code 2016, which included:
- Suspension of suits or continuation of pending suits or proceedings against the corporate debtor.
- Prohibition on transferring, encumbering, alienating, or disposing of the corporate debtor’s assets.
- Prohibition on actions to foreclose, recover, or enforce any security interest.
- Prohibition on recovery of any property by an owner or lessor occupied by the corporate debtor.

The moratorium shall remain effective until the completion of the CIRP, or until the Tribunal approves a resolution plan or passes an order for liquidation.

Conclusion:
The Tribunal admitted the application under Section 9(5) of the I&B Code 2016, initiating the CIRP against the corporate debtor. A moratorium was declared, and Mr. P. Sriram was appointed as the IRP to manage the insolvency resolution process. The Tribunal's order and the moratorium details were communicated to the operational creditor, corporate debtor, and the Insolvency and Bankruptcy Board of India (IBBI).

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