Jaipur NCLT Admits CIRP Application under Insolvency Code: IRP Appointed to Manage Debtor

Sangam (India) Limited Versus Adig Jemtex Pvt. Ltd.

Sangam (India) Limited Versus Adig Jemtex Pvt. Ltd. - TMI Issues:
- Application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 seeking initiation of Corporate Insolvency Resolution Process.
- Liability of the Respondent towards the claimed amount.
- Jurisdiction of the Adjudicating Authority.
- Time-barred debt and period of limitation.
- Completeness of the application and satisfaction of conditions under Section 9(5)(i) of the Code.
- Appointment of Interim Resolution Professional (IRP) and compliance with rules and regulations.
- Consequences of initiation of Corporate Insolvency Resolution Process (CIRP).

Analysis:

1. The Application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by the Operational Creditor seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor. The Applicant had been supplying goods to the Respondent since April 2017, and the Respondent defaulted in making payments from December 2017 to November 2019, leading to a total of 83 unpaid invoices.

2. The Respondent admitted liability towards the claimed amount but cited unforeseeable events for delayed payments. The Adjudicating Authority found that the application was complete, the debt was unpaid, and the demand notice was duly served, leading to the admission of the Application and the initiation of CIRP against the Corporate Debtor.

3. The Adjudicating Authority confirmed that the debt was not time-barred, as the first default occurred within the limitation period. The conditions under Section 9(5)(i) of the Code were satisfied, and no notice of dispute regarding the debt was received from the Respondent.

4. The Operational Creditor proposed the name of an Interim Resolution Professional (IRP) as required under Section 9(4) of the Code. The proposed IRP's credentials were verified, and no adverse findings were reported. The Adjudicating Authority appointed the proposed IRP to oversee the CIRP process.

5. Consequences of initiating CIRP included the IRP taking over the affairs of the Corporate Debtor, invoking moratorium under Section 14 of the Code, and directing the Operational Creditor to deposit a specified sum for the IRP's expenses. The management of the Corporate Debtor's affairs would vest with the IRP, and all personnel were required to cooperate with the IRP during the process.

6. The order for initiation of CIRP was to be communicated promptly to all relevant parties, including the Applicant, Corporate Debtor, and the appointed IRP, with a copy sent to the Insolvency and Bankruptcy Board of India for record-keeping purposes. The Application for initiation of CIRP was admitted by the Adjudicating Authority.

This detailed analysis covers the significant aspects of the judgment delivered by the National Company Law Tribunal, Jaipur Bench, regarding the initiation of Corporate Insolvency Resolution Process in the case discussed.