Tribunal Admits Insolvency Application: Moratorium Imposed on Corporate Debtor

The Tribunal admitted the Application under section 9 of the Insolvency and Bankruptcy Code, 2016, filed by the Operational Creditor against the Corporate Debtor. The Corporate Insolvency Resolution Process was initiated, a moratorium was declared, and an Interim Resolution Professional was appointed. The Tribunal found the claim valid, as the Corporate Debtor did not dispute it and the Operational Creditor provided supporting documents. The moratorium was imposed on the Corporate Debtor, and the Interim Resolution Professional was directed to manage the process until a Resolution Plan or liquidation order was approved.

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Issues:
Application filed under section 9 of the Insolvency and Bankruptcy Code, 2016 by Operational Creditor against Corporate Debtor for admission, initiation of Corporate Insolvency Resolution Process, declaration of moratorium, and appointment of Interim Resolution Professional.

Analysis:
1. The Application was filed under section 9 of the Insolvency and Bankruptcy Code, 2016 by the Operational Creditor against the Corporate Debtor, seeking admission, initiation of Corporate Insolvency Resolution Process, declaration of moratorium, and appointment of an Interim Resolution Professional. The Operational Creditor, a Private Limited Company, claimed an operational debt of Rs. 2,74,86,933 arising from airtime advertisement services provided to the Corporate Debtor for the brand 'Abirami Rice.'

2. The Corporate Debtor did not dispute the claim, and despite efforts to settle with the Operational Creditor, no resolution was reached. The Operational Creditor issued a Notice of Termination due to non-payment, followed by a Demand Notice under section 8 of the I&B Code, 2016. The Corporate Debtor did not respond to the notices, indicating admission of the claim.

3. The Operational Creditor submitted documents supporting the claim, including bills and agreements specifying payment terms. The claim was within the limitation period and exceeded the statutory minimum amount required for approaching the Tribunal. Therefore, the Tribunal deemed it fit to admit the Application and initiate the Corporate Insolvency Resolution Process against the Corporate Debtor.

4. As the Operational Creditor did not propose an Interim Resolution Professional, the Tribunal appointed Ms. Srividhya Subramanian as the Interim Resolution Professional. The moratorium under section 14(1) of the IBC, 2016 was imposed on the Corporate Debtor, restricting certain actions like instituting suits, transferring assets, or foreclosing security interests.

5. The moratorium period specified in section 14(4) of the Code would remain in effect until the completion of the Corporate Insolvency Resolution Process, subject to approval of a Resolution Plan or liquidation order by the Adjudicating Authority. The Operational Creditor was directed to pay Rs. 2,00,000 to the Interim Resolution Professional for expenses, as per the Code's regulations.

6. The Tribunal's Order was communicated to the Operational Creditor, Corporate Debtor, and the Insolvency and Bankruptcy Board of India (IBBI). The Interim Resolution Professional was tasked with informing the Registrar of Companies about the initiation of the Corporate Insolvency Resolution Process for the Corporate Debtor.

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