Tribunal Initiates Insolvency Process for Corporate Debtor

The Tribunal acknowledged identical claims by Operational Creditors against the Corporate Debtor and initiated Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Tribunal verified compliance with Section 9(3) requirements, declared a moratorium under Section 14, and appointed an Interim Resolution Professional. The applications for CIRP were admitted, and an IRP was appointed to oversee the proceedings, with Operational Creditors directed to deposit funds for initiation. The order was dated 23rd March 2021.

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Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Default and outstanding dues by the Corporate Debtor.
3. Compliance with Section 9(3) of the Insolvency and Bankruptcy Code, 2016.
4. Declaration of Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016.
5. Appointment of Interim Resolution Professional (IRP).

Issue-wise Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016:
The applications were filed by the Operational Creditors, M/s. Ambani Vitrified Pvt Limited and M/s. Airson Ceramic Industries, under Section 9 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against the Corporate Debtor, M/s. Nassco Trading India Private Limited. The Tribunal acknowledged that both applications contained identical claims and thus clubbed them together for a common order.

2. Default and outstanding dues by the Corporate Debtor:
- M/s. Ambani Vitrified Pvt Limited: Supplied vitrified tiles worth Rs. 44,02,946 between 26.05.2016 and 15.08.2016. After partial payment, an outstanding amount of Rs. 77,34,614, including interest, remained due from 30.11.2019. Despite a demand notice issued on 12.12.2019, the Corporate Debtor failed to clear the dues.
- M/s. Airson Ceramic Industries: Supplied ceramic tiles worth Rs. 1,83,73,901 between 01.04.2016 and 31.04.2017. After partial payment, an outstanding amount of Rs. 67,06,869 remained due. Despite a demand notice issued on 31.08.2019, the Corporate Debtor failed to clear the dues.

3. Compliance with Section 9(3) of the Insolvency and Bankruptcy Code, 2016:
The Tribunal verified compliance with Section 9(3) of the Code, which mandates:
- A copy of the invoice demanding payment or demand notice.
- An affidavit stating no notice of dispute from the Corporate Debtor.
- A certificate from financial institutions confirming no payment of the unpaid operational debt.
The Tribunal confirmed that the Operational Creditors had complied with these requirements, and the claim amounts satisfied the minimum default requirement under Section 4 of the Code.

4. Declaration of Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016:
The Tribunal declared a moratorium under Section 14(1) of the Code, prohibiting:
- Institution or continuation of suits or proceedings against the Corporate Debtor.
- Transfer, encumbrance, alienation, or disposal of any assets by the Corporate Debtor.
- Foreclosure, recovery, or enforcement of any security interest.
- Recovery of any property by an owner or lessor.
The moratorium will remain effective until the completion of the CIRP, approval of the Resolution Plan, or an order for liquidation.

5. Appointment of Interim Resolution Professional (IRP):
As the Applicants did not propose an IRP, the Tribunal appointed Mr. Renahan Vamakesan as the IRP from the panel of Insolvency Professionals for Kerala. The IRP is tasked with functions under Sections 15, 17, 18, 19, 20, and 21 of the Code. The Operational Creditors were directed to deposit Rs. 2,00,000 with the IRP for initiating the proceedings.

Conclusion:
The Tribunal admitted the applications IBA/22/KOB/2020 and IBA/23/KOB/2020, initiating CIRP against the Corporate Debtor. The Registry was directed to communicate the order to all relevant parties immediately. The order was dated 23rd March 2021.

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