2020 (12) TMI 245 - Tri - Insolvency and Bankruptcy

Tribunal Admits Petition for Insolvency Proceedings Against Corporate Debtor

The Tribunal admitted the petition filed by the operational creditor under Section 9 of The Insolvency and Bankruptcy Code, 2016, against the corporate ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - time limitation - Ex-parte order - HELD THAT:- It is found that the instant petition filed on 23rd January, 2020 was notified for the first time on 11.02.2020. Thereafter, despite giving number of opportunities, the respondent has not filed any reply. As per the records respondent appeared through counsel after lockdown when the matter was fixed on 05.08.2020 and again prayed for time. Two weeks' time was granted, but, having failed to file reply, the matter is heard on 27.08.2020 ex-parte. On perusal of the record it is found that the demand notice issued by the applicant under section 8 of the I&B Code on 17.12.2019 has been served upon the corporate debtor, but, no dispute has been raised. Therefore, the petitioner has also filed affidavit of no dispute dated 18.01.2020 - the instant petition filed by the applicant is well within limitation and there is no denial of the operational debt or any pre-existing dispute regarding the operational debt from the side of the corporate debtor. The documents produced by the operational creditor clearly establish the 'debt' and there is default on the part of the Corporate Debtor in payment of the 'operational debt'. This Authority is satisfied that the application is complete in all respect and the Corporate Debtor committed default in paying the operational debt due and payable to the Applicant - Application admitted. Issues involved:- Filing of petition under Section 9 of The Insolvency and Bankruptcy Code, 2016- Operational debt due and payable by the corporate debtor- Default in payment of operational debt- Adjudication of the application under Section 9(5)(1) of the Code- Declaration of moratorium and appointment of Interim Resolution ProfessionalAnalysis:1. The appellant, as an operational creditor, filed a petition under Section 9 of The Insolvency and Bankruptcy Code, 2016, seeking to recover outstanding dues from the respondent, a corporate debtor. The operational creditor detailed the history of transactions between the parties, stating that the corporate debtor started delaying payments from March 2018, resulting in a total outstanding amount of Rs. 15,99,418 as of 12.12.2019, inclusive of interest.2. Despite numerous reminders and a demand notice issued under Section 8 of the I&B Code, the corporate debtor failed to clear the dues, leading the operational creditor to file the petition. The applicant submitted various documents, including unpaid invoices, ledger entries, bank statements, and proof of service, to support the claim.3. The Tribunal noted that the respondent did not file a reply despite multiple opportunities and that the demand notice was served without any dispute raised by the corporate debtor. The petition was found to be within the limitation period, with no denial of the operational debt or pre-existing disputes.4. Referring to the Mobilox Innovative Private Limited vs. Kirusa Software Private Limited case, the Tribunal emphasized the need to establish the existence of operational debt exceeding Rs. 1.00 lac, the due and payable status of the debt, and the absence of disputes or pending legal proceedings. The Tribunal found the operational debt due and payable, meeting the requirements of the I&B Code.5. Consequently, the Tribunal admitted the petition, declared a moratorium, and appointed an Interim Resolution Professional to oversee the insolvency resolution process. The moratorium prohibits legal actions against the corporate debtor, asset transfers, enforcement of security interests, and property recovery during the resolution period.6. The order of moratorium will remain in effect until the completion of the insolvency resolution process or until a resolution plan is approved or liquidation is ordered. The Tribunal appointed an Interim Resolution Professional and directed communication of the order to relevant parties, ensuring compliance with the insolvency resolution process and protecting stakeholders' interests.