Tribunal Confirms Jurisdiction in Insolvency Case, Appoints Interim Resolution Professional

The Tribunal confirmed jurisdiction over the matter, acknowledged non-payment of operational debt by the corporate debtor, and compliance with procedural requirements under the Insolvency and Bankruptcy Code. The corporate debtor admitted default, leading to the appointment of an Interim Resolution Professional. A moratorium was declared, prohibiting certain actions against the corporate debtor. The Tribunal admitted the application, initiated Corporate Insolvency Resolution Process, appointed Mr. Sanjay Kumar Singh as the Interim Resolution Professional, and directed the Registrar of Companies to update the corporate debtor's status.

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Issues Involved:
1. Jurisdiction of the Tribunal.
2. Non-payment of operational debt.
3. Admission of debt and default by the corporate debtor.
4. Compliance with procedural requirements under the Insolvency and Bankruptcy Code, 2016.
5. Appointment of Interim Resolution Professional.
6. Declaration of moratorium.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Tribunal:
The Tribunal confirmed its territorial jurisdiction over the matter as the registered office of the respondent corporate debtor is located in Delhi. This is in accordance with sub-section (1) of Section 60 of the Insolvency and Bankruptcy Code, 2016.

2. Non-payment of operational debt:
The operational creditor, M/s. Adonis Electronics Pvt. Ltd, supplied air conditioners to the corporate debtor, M/s. Saka Ltd., between April 6, 2018, and September 25, 2018, amounting to Rs. 13,30,662/-. Despite reminders and a demand notice sent on October 9, 2019, the corporate debtor failed to make the payment. The corporate debtor acknowledged the debt and expressed willingness to pay but cited financial distress as the reason for non-payment.

3. Admission of debt and default by the corporate debtor:
The corporate debtor admitted the outstanding debt and default in its reply to the petition dated January 23, 2020. The Tribunal noted that the definition of "default" under Section 3(12) includes non-payment of even part of the debt once it becomes due and payable. The corporate debtor's admission of non-payment constituted a clear occurrence of default.

4. Compliance with procedural requirements under the Insolvency and Bankruptcy Code, 2016:
The operational creditor followed the procedure outlined in Section 9 of the Code. The demand notice was sent as per Section 8 on October 9, 2019, and the application was filed in requisite Form-5. The corporate debtor did not dispute the claim in its reply, fulfilling the requirements of Section 9(5)(i)(a) to (d). The application was deemed complete with all necessary particulars and evidence of default.

5. Appointment of Interim Resolution Professional:
The petitioner proposed the name of Mr. Sanjay Kumar Singh as the Interim Resolution Professional (IRP). He satisfied the requirements of Section 7(3)(b) of the Code, with no disciplinary proceedings pending against him. The Tribunal appointed Mr. Sanjay Kumar Singh as the IRP.

6. Declaration of moratorium:
The Tribunal declared a moratorium under Section 14 of the Code, effective from the date of the admission order until the completion of the Corporate Insolvency Resolution Process (CIRP). The moratorium included prohibitions on:
- The institution or continuation of suits or proceedings against the corporate debtor.
- Transferring or disposing of any assets of the corporate debtor.
- Actions to foreclose or enforce security interests.
- Recovery of property by owners or lessors.

The moratorium does not apply to transactions notified by the Central Government or the supply of essential goods or services. The IRP is tasked with managing the corporate debtor's affairs and preserving its property value, with all personnel legally obligated to assist.

Conclusion:
The Tribunal admitted the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, and initiated the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor. The moratorium was declared, and Mr. Sanjay Kumar Singh was appointed as the Interim Resolution Professional. The Registrar of Companies was directed to update the status of the corporate debtor and notify the public.

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