Tribunal initiates CIRP, imposes moratorium, appoints IRP, and orders funds deposit for expenses.

The tribunal admitted the petition, initiated Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, imposed a moratorium under Section 14 of the Insolvency & Bankruptcy Code, 2016, appointed Mr. Manohar Lal Vij as the Interim Resolution Professional (IRP), and directed the Operational Creditor to deposit funds for IRP expenses.

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Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency & Bankruptcy Code, 2016.
2. Validity of the operational debt claimed by the Operational Creditor.
3. Compliance with Section 8 of the Insolvency & Bankruptcy Code, 2016.
4. Existence of a dispute regarding the claimed debt.
5. Appointment of Interim Resolution Professional (IRP).
6. Imposition of moratorium under Section 14 of the Insolvency & Bankruptcy Code, 2016.
7. Directions for the Operational Creditor to deposit funds for IRP expenses.

Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
The petition was filed under Section 9 of the Insolvency & Bankruptcy Code, 2016, seeking initiation of CIRP against the Corporate Debtor due to its inability to liquidate its operational debt. The Operational Creditor had issued a Demand Notice on 06.06.2019 under Section 8 of the Code, which was duly served to the Corporate Debtor but received no reply.

2. Validity of the Operational Debt:
The Operational Creditor claimed an outstanding balance of Rs. 18,02,043/- towards the principal amount and interest of Rs. 8,52,243/-. The Corporate Debtor contended that only certain invoices were acknowledged and stamped, amounting to Rs. 30,372/-, and claimed that the rest were invalid as they were neither stamped nor signed. The Corporate Debtor also mentioned having paid Rs. 6,00,000/- through a demand draft towards all pending liabilities, including interest.

3. Compliance with Section 8 of the Insolvency & Bankruptcy Code:
The tribunal referred to Section 8 of the Code, which mandates the Corporate Debtor to respond to the Demand Notice within ten days, either disputing the debt or providing proof of payment. The Corporate Debtor failed to comply with this requirement, as no response was sent to the Demand Notice, and no pre-existing dispute was raised.

4. Existence of a Dispute:
The tribunal cited the Supreme Court's decision in "Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software (P) Limited," which clarifies that the existence of a dispute must be pre-existing before the receipt of the Demand Notice. Since the Corporate Debtor did not raise any dispute within the stipulated time, the tribunal found no valid dispute existed regarding the claimed debt.

5. Appointment of Interim Resolution Professional (IRP):
The Operational Creditor proposed the name of Mr. Manohar Lal Vij as the IRP. The tribunal confirmed his appointment, noting that his consent and necessary details were on record and that there were no disciplinary proceedings pending against him.

6. Imposition of Moratorium:
The tribunal imposed a moratorium under Section 14 of the Code, which includes:
- Suspension of institution or continuation of suits or proceedings against the Corporate Debtor.
- Prohibition on transferring, encumbering, or disposing of any assets of the Corporate Debtor.
- Suspension of actions to foreclose or enforce security interests.
- Protection of essential goods or services to the Corporate Debtor from termination or suspension during the moratorium period.

7. Directions for Operational Creditor to Deposit Funds:
The tribunal directed the Operational Creditor to deposit Rs. 2 lakhs to cover the immediate expenses of the IRP, which would be accountable and reimbursed by the Committee of Creditors (CoC) as CIR costs.

Conclusion:
The tribunal admitted the petition, initiated CIRP against the Corporate Debtor, and imposed a moratorium. The tribunal also appointed Mr. Manohar Lal Vij as the IRP and directed the Operational Creditor to deposit funds for IRP expenses. The case was renotified for the IRP's report.

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