Operational debt and default established, leading to admission of a section 9 insolvency application and moratorium.

An operational creditor's section 9 application was admitted after the NCLT found that invoices, a section 8 demand notice, and material showing non-payment established both debt and default. The corporate debtor did not appear despite notice and was proceeded ex parte. On that basis, corporate insolvency resolution process was initiated, moratorium under section 14 was directed, and the proposed interim resolution professional was confirmed to carry out duties under sections 15, 17 and 18 of the Insolvency and Bankruptcy Code, 2016.

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Issues: Whether the operational creditor established the existence of debt and default so as to justify admission of the application under section 9 of the Insolvency and Bankruptcy Code, 2016 and initiation of corporate insolvency resolution process.

Analysis: The application was supported by invoices, demand notice under section 8 of the Insolvency and Bankruptcy Code, 2016, and material showing non-payment of the operational debt. The corporate debtor did not appear despite notice and was proceeded ex parte. On the material placed, the debt and default were found to be established, warranting commencement of corporate insolvency resolution process. Consequent moratorium under section 14 of the Code was directed, and the proposed interim resolution professional was confirmed with directions to perform duties under sections 15, 17 and 18 of the Code.

Conclusion: The application was admitted and corporate insolvency resolution process was initiated against the corporate debtor.

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