2020 (9) TMI 746 - Tri - Insolvency and Bankruptcy

NCLT admits Company Petition under IBC, initiates CIRP with IRP appointment and moratorium

The NCLT admitted the Company Petition under section 9 of the IBC against the Corporate Debtor, finding the debt and default established by the ... 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 made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC at the relevant time. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Petition admitted - moratorium declared. Issues involved:Company Petition under section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking Corporate Insolvency Resolution Process (CIRP) against a Corporate Debtor.Detailed Analysis:1. Jurisdiction and Background: The Corporate Debtor is a private company incorporated under the Companies Act, 1956, with jurisdiction falling under the Mumbai Bench of the National Company Law Tribunal (NCLT). The Operational Creditor filed the petition due to the Corporate Debtor's failure to pay a principal amount, leading to a default.2. Debt and Default: The Operational Creditor, as the sole proprietor of a proprietary entity, supplied goods to the Corporate Debtor under multiple invoices. Despite partial payments, a significant amount remained unpaid, leading to a total outstanding debt of Rs. 33,99,714.00. The Corporate Debtor issued a cheque that subsequently bounced, further confirming the default.3. Legal Proceedings: The Operational Creditor followed the legal process by serving a Demand Notice to the Corporate Debtor in accordance with section 8 of the IBC. The Corporate Debtor responded by denying the default but admitted the liability, citing temporary financial difficulties.4. Admission of Petition: After considering both parties' arguments and submissions, the NCLT found the Operational Creditor's petition to be complete and in compliance with the law. The existence of debt and default was established, leading to the admission of the petition and initiation of CIRP against the Corporate Debtor.5. Order and Moratorium: The NCLT issued a detailed order admitting the petition, appointing an Interim Resolution Professional (IRP), and imposing a moratorium under section 14 of the IBC. The moratorium included restrictions on legal actions against the Corporate Debtor's assets and allowed for the continuation of essential supplies during the CIRP period.6. Operational Procedures: The order specified the responsibilities of the IRP, the management of the Corporate Debtor during CIRP, and the submission of progress reports to the NCLT. Additionally, the Operational Creditor was directed to deposit a sum with the IRP for expenses related to public notices and claims.7. Communication and Compliance: The NCLT directed the immediate communication of the order to all relevant parties through various means, including Speed Post, email, and WhatsApp. Furthermore, the Registrar of Companies was instructed to update the Corporate Debtor's information promptly.In conclusion, the NCLT's judgment admitted the petition for CIRP against the Corporate Debtor based on the established debt and default, initiating the resolution process with specific directives and procedures to be followed during the proceedings.