2020 (6) TMI 230 - Tri - Insolvency and Bankruptcy

Company Faces Insolvency Process for Unpaid Debt: Key Details

The Adjudicating Authority admitted the petition for initiating the Corporate Insolvency Resolution Process under section 9 of the Insolvency & ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- The Application has been filed on 16-7-2019 for unpaid operational debt due and defaulted of ₹ 12,21,200.00 as per the Invoices enclosed. Dates of invoice are 21-3-2018, 25-3-2018, & 28-3-2018 - Date of first default is 21-3-2018. Respondent has admitted the default by filing an Affidavit dated:22-8-2019 by the Director of the Corporate Debtor Shri Gopal J. Shelani having office at New Sardar Marketing Yard, Shop no. A-174, 8B National Highway, Gondal Rajkot-360311, Gujarat. However, Copy of the Board Resolution of the Corporate Debtor in respect of admission of the default is not made available. Application is filed within the limitation period as the date of default is 21-3-2018 and the date of filing this petition under section 9 of IBC is 16-7-2019 - No pre-existing dispute before the filing of this application is observed. This Adjudicating Authority is satisfied that there is existence of debt and default has occurred on21-3-2018 - Petition has been filed within the limitation period as the date of default is 21-3-2018 and the petition has been filed on 16-7-2019. Petition admitted - moratorium declared. Issues:Initiation of Corporate Insolvency Resolution Process under section 9 of the Insolvency & Bankruptcy Code, 2016 for unpaid Operational Debt due.Analysis:1. Background and Parties Involved:The petitioner, engaged in the cotton ginning and pressing business, filed a petition under section 9 of the Insolvency & Bankruptcy Code, 2016 against the respondent, a company engaged in the purchase of cotton for ginning and pressing purposes. The respondent had placed orders with the petitioner for cotton supply between 21-3-2018 to 28-3-2018, amounting to INR 12,21,200.00.2. Operational Debt and Default:The operational creditor submitted that the respondent failed to pay the amount claimed for the supplied cotton, leading to a default on the part of the corporate debtor. The operational debt due was INR 12,21,200.00, as per invoices raised on specific dates in March 2018.3. Legal Proceedings and Admissions:The operational creditor dispatched a demand notice to the respondent, which remained unanswered. The respondent later admitted the default through an affidavit and expressed no objection to the commencement of Corporate Insolvency Resolution Process (CIRP).4. Adjudicating Authority's Decision:After considering the evidence and submissions, the Adjudicating Authority found the petition admissible. The authority noted the existence of debt, due payment, occurrence of default, and timely filing within the limitation period. Consequently, the petition was admitted for initiating the CIRP against the respondent.5. Appointment of Interim Resolution Professional:As the operational creditor did not suggest a name for an Interim Resolution Professional, the Adjudicating Authority appointed an Insolvency Professional to oversee the resolution process. The appointed professional was directed to comply with the provisions of the Insolvency and Bankruptcy Code diligently.6. Moratorium and Further Directions:A moratorium was declared to prohibit certain actions against the corporate debtor. The Interim Resolution Professional was instructed to make a public announcement of the moratorium and manage the affairs of the corporate debtor in accordance with the Code's provisions. The authority emphasized the cooperation required from all parties involved in the resolution process.7. Communication and Conclusion:The order of admission, along with observations and directions, was communicated to the operational creditor, corporate debtor, and relevant authorities. The Corporate Insolvency Resolution Process was officially initiated on 18-2-2020 based on the findings and directions outlined by the Adjudicating Authority.