Corporate Insolvency Process Initiated, Moratorium Declared, Interim Resolution Professional Appointed

The Tribunal admitted the petition under Section 9 of the Insolvency and Bankruptcy Code, initiating the Corporate Insolvency Resolution Process against the Corporate Debtor. A moratorium was declared under Section 14 of the Code, prohibiting suits and recovery actions against the Debtor. Ms. Baiju P. was appointed as the Interim Resolution Professional to manage the Corporate Debtor's affairs during the resolution process. The Operational Creditor was directed to deposit a specified amount with the IRP for expenses.

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Issues Involved:
1. Initiation of Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Existence of debt and default by the Corporate Debtor.
3. Alleged pre-existing dispute regarding the quality of goods supplied.
4. Appointment of an Interim Resolution Professional (IRP).

Issue-wise Detailed Analysis:

1. Initiation of Insolvency Resolution Process:
The application was filed by Ceram Tec Innovative Ceramic Engineering (M) SDN. BHD under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Insolvency Resolution Process against Mariya Healthcare Private Limited. The Operational Creditor claimed an outstanding amount of USD 20,544 as of 1-11-2018, arising from a trade transaction.

2. Existence of Debt and Default:
The Operational Creditor supplied goods as per the Proforma Invoice/Purchase Order and raised Invoice No. 90012278 dated 14-12-2015. The Corporate Debtor paid 50% of the invoice value as a condition precedent for production, with the remaining 50% due upon delivery. Despite repeated assurances and acknowledgments of the debt via emails and legal notices, the Corporate Debtor failed to pay the balance amount. The Corporate Debtor acknowledged the debt and default in a letter dated 29-4-2018, agreeing to pay the outstanding amount along with late fees and court charges if defaulted.

3. Alleged Pre-existing Dispute:
The Corporate Debtor argued that there was a pre-existing dispute regarding the quality of goods supplied, claiming the goods did not meet the specifications and were held by customs for a year. They alleged the product supplied was defective and did not meet the ASTMD 3577 standards, causing business losses. However, the Tribunal found no documentary evidence of any dispute regarding product specifications before the filing of the Reply to the present Application. The Operational Creditor countered that the products met the required specifications and that any claims of defects were an afterthought by the Corporate Debtor.

4. Appointment of an Interim Resolution Professional (IRP):
The Tribunal allowed the Miscellaneous Application No. 14/KOB/2020, accepting the new authorized representative of the Operational Creditor. The Tribunal appointed Ms. Baiju P. as the Interim Resolution Professional (IRP) to carry out the functions as mentioned under the IBC. The IRP is directed to manage the Corporate Debtor's affairs during the CIRP period and ensure compliance with the relevant regulations.

Findings and Order:
The Tribunal concluded that the Corporate Debtor admitted and acknowledged the debt and default through various communications. The application was complete, and there was no evidence of a pre-existing dispute regarding the product specifications. The Tribunal admitted the petition under Section 9 of the IBC, initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. A moratorium was declared under Section 14 of the IBC, prohibiting suits, asset transfers, and recovery actions against the Corporate Debtor during the CIRP period. The Tribunal ordered the public announcement of the CIRP and directed the Operational Creditor to deposit Rs. 2,00,000 with the IRP for expenses.

Order:
(a) The petition under Section 9 of the IBC is admitted.
(b) A moratorium under Section 14 of the IBC is declared.
(c) The IRP, Ms. Baiju P., is appointed to manage the CIRP.
(d) The Operational Creditor is directed to deposit Rs. 2,00,000 with the IRP.
(e) The Registry is instructed to communicate the order to relevant parties and authorities.

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