2021 (2) TMI 775 - Tri - Insolvency and Bankruptcy

Corporate Debtor Admitted to Insolvency Process: Moratorium Declared, IRP Appointed

The National Company Law Tribunal, Ahmedabad Bench, admitted a Corporate Debtor in the Corporate Insolvency Resolution Process (CIRP) under Section 9 of ... 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 Operational Creditor has produced all invoices, delivery challans under the case were sold and supplied to the Corporate Debtor. He has also produced a copy of demand notice under Section 8 of the LB. Code and postal tracking record shows that the notice was delivered to the Corporate Debtor - The Operational Creditor also produced on record the affidavit of compliance of provision under Section 9(3)(b) and 9(3)(c) of the LB. Code. The application is defect free. In spite of notice, no one appeared on behalf of the Corporate Debtor. The notice was also published in local newspapers. The Corporate Debtor did not give any response. From the evidence, it is clear that the amount of debt ₹ 25,25,672/- is due and payable to the Operational Creditor - Application deserves to be admitted. Application admitted - moratorium declared. Issues:Admission of Corporate Debtor in Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016.Detailed Analysis:The judgment delivered by the National Company Law Tribunal, Ahmedabad Bench, involved the admission of a Corporate Debtor in the Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016. The case was brought by an Operational Creditor against the Corporate Debtor, alleging default in payment of operational debt amounting to Rs. 25,25,672. The Operational Creditor provided evidence including invoices, delivery challans, and a copy of the demand notice under Section 8 of the Code, which was delivered to the Corporate Debtor. The tribunal noted that despite notice and publication in local newspapers, the Corporate Debtor did not respond. Consequently, the tribunal found the debt to be due and payable, leading to the admission of the Corporate Debtor in CIRP.The tribunal, in its order, declared a moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016, prohibiting various actions against the Corporate Debtor, including the institution of suits, transferring of assets, enforcing security interests, and property recovery. The moratorium was to be in effect until the completion of the CIRP or until a resolution plan was approved or liquidation ordered. Additionally, the tribunal appointed an Interim Resolution Professional (IRP) to conduct the CIRP, outlining the IRP's duties and obligations under the Code.Furthermore, the tribunal directed the IRP to make a public announcement of the initiation of CIRP, called for submission of claims, and ensured the continuity of the supply of goods/services to the Corporate Debtor during the moratorium period. The IRP was tasked with protecting and preserving the value of the Corporate Debtor's property and managing its operations as a going concern. The Operational Creditor was instructed to pay an advance to the IRP for the smooth conduct of the CIRP.The registry was directed to communicate the order to all relevant parties and upload it on the website. Ultimately, the judgment admitted the Corporate Debtor in CIRP, emphasizing compliance with the provisions of the Insolvency and Bankruptcy Code, 2016, and the regulations thereunder.