Adjudicating Authority admits Insolvency Application against Corporate Debtor, initiates Resolution Process.

The Adjudicating Authority admitted the Operational Creditor's application under Section 9 of the Insolvency and Bankruptcy Code, 2016, for initiation of Corporate Insolvency Resolution Process against the Corporate Debtor. The claimed debt was disputed by the Corporate Debtor, citing delivery delays and order cancellations, but the defense was deemed unsubstantiated. Consequently, the Adjudicating Authority declared a moratorium, appointed an Interim Resolution Professional, and directed actions to manage the CIRP efficiently, ensuring continuity of services and payments.

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Issues:
- Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor.
- Dispute regarding the claimed debt by the Operational Creditor against the Corporate Debtor.
- Appointment of Interim Resolution Professional (IRP) and declaration of moratorium.

Issue 1: Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor.

The Operational Creditor filed an application under Section 9 of the Code seeking initiation of CIRP against the Corporate Debtor for a claimed debt of Rs. 3,67,63,463.80, including interest, with a default date of 21.06.2019. The Operational Creditor supplied medicines to the Corporate Debtor, "Arogya Retail," with invoices raised from 25.05.2019 to 15.10.2020. A demand notice was issued under Section 8(1) of the IBC, 2016, which the Corporate Debtor neither paid nor responded to. The Corporate Debtor disputed the amount claimed, citing delays in delivery and subsequent cancellation of orders due to losses incurred. However, the Adjudicating Authority found the Corporate Debtor's defense as frivolous and lacking evidence, leading to the admission of the application and declaration of moratorium.

Issue 2: Dispute regarding the claimed debt by the Operational Creditor against the Corporate Debtor.

The Corporate Debtor denied the Operational Creditor's claims, alleging delays in delivery and subsequent cancellation of orders due to losses incurred. However, the Corporate Debtor failed to provide evidence to support these claims. The Adjudicating Authority noted the absence of a pre-existing dispute and the Corporate Debtor's failure to respond to the demand notice served under Section 8 of the IBC, 2016. The Adjudicating Authority found the Corporate Debtor's defense unsubstantiated and lacking merit, leading to the admission of the Operational Creditor's application and the appointment of an Interim Resolution Professional (IRP).

Issue 3: Appointment of Interim Resolution Professional (IRP) and declaration of moratorium.

The Adjudicating Authority admitted the application, declared a moratorium, and appointed Mr. Navin Khandelwal as the IRP. The moratorium prohibited various actions against the Corporate Debtor, and the IRP was tasked with managing the CIRP process. The IRP was directed to make a public announcement, call for submission of claims, and ensure continuity of goods/services supply to the Corporate Debtor during the moratorium period. Additionally, the Operational Creditor was directed to pay an advance to the IRP for the smooth conduct of the CIRP. The Registry was instructed to communicate the order to relevant parties promptly.

This comprehensive analysis of the judgment highlights the key issues involved in the case and the detailed findings and decisions made by the Adjudicating Authority regarding the initiation of the Corporate Insolvency Resolution Process.

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