Insolvency Application Admitted, Resolution Process Initiated, Moratorium Declared

The application under section 9 of the Insolvency and Bankruptcy Code, 2016 was admitted by the National Company Law Tribunal, New Delhi. The respondent company's admission of non-payment constituted a default, leading to the commencement of the Corporate Insolvency Resolution Process. Mr. Vikram Singh Rathore was appointed as the Interim Resolution Professional, and a moratorium was declared to facilitate the resolution process, prohibiting certain actions against the corporate debtor. The Tribunal directed compliance with various provisions of the Code and communication of the order to relevant parties and authorities.

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Issues Involved:
1. Jurisdiction and Admissibility of Application
2. Existence of Operational Debt and Default
3. Compliance with Procedural Requirements under Section 9 of the Insolvency and Bankruptcy Code, 2016
4. Appointment of Interim Resolution Professional
5. Declaration of Moratorium

Issue-wise Detailed Analysis:

1. Jurisdiction and Admissibility of Application:
The application was filed under section 9 of the Insolvency and Bankruptcy Code, 2016, read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by the operational creditor against the respondent company. The respondent company is incorporated under the Companies Act, 1956, with its registered office in New Delhi, thus falling under the territorial jurisdiction of the National Company Law Tribunal, New Delhi, in accordance with sub-section (1) of section 60 of the Code.

2. Existence of Operational Debt and Default:
The applicant supplied 3,64,500 kgs of Arecanuts to the respondent corporate debtor in June 2016, amounting to Rs. 9,74,37,329/-. Partial payments totaling Rs. 8,42,99,990/- were made, leaving an outstanding amount of Rs. 1,31,37,429/-. The respondent admitted the outstanding debt and sought additional time for payment due to financial difficulties. The Tribunal noted that "default" under section 3(12) includes non-payment of debt once it becomes due and payable, even if partially. The respondent's admission of non-payment constituted a clear occurrence of default.

3. Compliance with Procedural Requirements under Section 9 of the Insolvency and Bankruptcy Code, 2016:
The applicant issued a demand notice in Form-3 on 27-09-2019, as required under section 8 of the Code. The respondent acknowledged the debt and expressed financial difficulties in response, without disputing the claim. The application under section 9 was filed in requisite Form-5, which included all necessary documents such as invoices, ledger accounts, financial statements, and bank statements. The application was deemed complete, satisfying the requirements of section 9(3) and section 9(5) of the Code.

4. Appointment of Interim Resolution Professional:
The petitioner proposed Mr. Vikram Singh Rathore as the Interim Resolution Professional (IRP), with a declaration that no disciplinary proceedings were pending against him. The Tribunal appointed Mr. Rathore as the IRP, directing the petitioner to pay Rs. 1 lakh to meet the expenses for performing his functions, subject to adjustment by the Committee of Creditors.

5. Declaration of Moratorium:
The Tribunal declared a moratorium under section 14 of the Code, effective from the date of the order until the completion of the Corporate Insolvency Resolution Process. The moratorium included prohibitions on:
- Institution or continuation of suits or proceedings against the corporate debtor.
- Transferring, encumbering, or disposing of assets of the corporate debtor.
- Actions to foreclose or enforce security interests.
- Recovery of property occupied by the corporate debtor.

The Tribunal clarified that the moratorium does not apply to transactions notified by the Central Government or the supply of essential goods or services to the corporate debtor. The IRP was directed to perform duties under sections 15, 17, 18, 19, 20, and 21 of the Code, with all personnel connected to the corporate debtor required to cooperate with the IRP.

Conclusion:
The application was admitted, and the Corporate Insolvency Resolution Process commenced from the date of the order. The IRP was appointed, and a moratorium was declared to facilitate the resolution process. The Tribunal directed communication of the order to relevant parties and authorities, including updating the status of the corporate debtor on the Registrar of Companies' website.

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