Corporate Insolvency Process Initiated under Section 9

The tribunal admitted the application under section 9 of the Insolvency and Bankruptcy Code, appointed an interim resolution professional (IRP), and initiated the corporate insolvency resolution process. This decision was based on the non-payment of operational debt by the corporate debtor and the valid service of the demand notice. A moratorium was declared to protect the interests of all parties involved, with the IRP tasked to manage the operations of the corporate debtor and ensure the continuation of supplies during this period.

---

---

Issues:
1. Application under section 9 of the Insolvency and Bankruptcy Code, 2016 for corporate insolvency resolution process.
2. Dispute regarding non-payment of operational debt by the corporate debtor.
3. Validity of demand notice under section 8 of the Insolvency and Bankruptcy Code, 2016.
4. Appointment of interim resolution professional (IRP) and initiation of corporate insolvency resolution process (CIRP).

Issue 1: Application under section 9 of the Insolvency and Bankruptcy Code, 2016 for corporate insolvency resolution process:
The operational creditor filed an application under section 9 of the Insolvency and Bankruptcy Code to initiate the corporate insolvency resolution process against the corporate debtor for defaulting on an operational debt of Rs. 13,24,748. The operational creditor supplied the materials as per the purchase order, but some items were delivered after a significant delay, leading to a dispute regarding the timeliness of delivery.

Issue 2: Dispute regarding non-payment of operational debt by the corporate debtor:
The corporate debtor raised defenses claiming that the operational creditor did not supply the goods ordered on time, resulting in losses, and that they had disputed the late delivery before the demand notice was served. However, the tribunal found that the corporate debtor accepted the remaining goods without protest, indicating that the dispute over late delivery was no longer valid. The tribunal held that the demand notice was served correctly, and the corporate debtor failed to respond within the stipulated time, justifying the initiation of the corporate insolvency resolution process.

Issue 3: Validity of demand notice under section 8 of the Insolvency and Bankruptcy Code, 2016:
The corporate debtor contended that the demand notice was not served upon them, citing various judgments to support their argument. However, the tribunal established that the demand notice was sent to the registered office of the corporate debtor and was duly served, as evidenced by the postal track report. The tribunal emphasized the importance of delivering the demand notice for initiating the insolvency resolution process.

Issue 4: Appointment of interim resolution professional (IRP) and initiation of corporate insolvency resolution process (CIRP):
The tribunal admitted the application, declared a moratorium, and appointed an IRP to oversee the corporate insolvency resolution process. The IRP was directed to perform various functions as per the Insolvency and Bankruptcy Code. Additionally, the tribunal ordered the IRP to make a public announcement of the CIRP, manage the operations of the corporate debtor, and ensure the continuation of supplies during the moratorium period. The operational creditor was instructed to pay an advance to the IRP for the smooth conduct of the CIRP.

In conclusion, the tribunal admitted the application, appointed an IRP, and initiated the corporate insolvency resolution process based on the non-payment of operational debt by the corporate debtor and the valid service of the demand notice. The moratorium was declared, and necessary steps were taken to protect the interests of all parties involved in the resolution process.

---