2021 (11) TMI 908 - Tri - Insolvency and Bankruptcy

Tribunal admits Company Petition for Insolvency Resolution Process, appoints Interim Professional

M/s Arsenius Skill Capital Versus TV Products India Private Limited

The Tribunal admitted the Company Petition for Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor due to the admitted default in ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- It is seen from the records that the Corporate Debtor through its Reply dated 15.02.2020, has admitted its liability to pay to the Operational Creditor. Further the Corporate Debtor Company is in financial crunches hence there is nothing much to say in defense. The Corporate Debtor has no objection for Admission of this present Petition. On the basis of the evidences on record the Operational Creditor has established that he has delivered services to the Corporate Debtor Company for which an amount of ₹ 5,99,250/- is due and a default has also occurred. Considering these facts and circumstances, the nature of the Debt is an ‘Operational Debt’ as defined under section 5 (21) of the Definitions under The Code. There is a “Default” as defined under section 3 (12) of The Code on the part of the Debtor. The Operational Creditor has successfully demonstrated and proved the debt and default in this case and has also proved that there is absolutely no reason for the Corporate Debtor to hold on to the payment of the invoices. The Operational Creditor has also suggested the name of proposed Interim Resolution Professional along with his consent letter in Form-2 - Petition admitted - moratorium declared. Issues:Initiation of Corporate Insolvency Resolution Process (CIRP) based on default in payment.Analysis:The Operational Creditor filed a Company Petition seeking to initiate CIRP against the Corporate Debtor under Section 9 of the Insolvency and Bankruptcy Code, 2016, alleging default in payment of a specific amount. The Operational Creditor claimed the outstanding amount for services provided from a certain period and supported the claim with evidence such as invoices, agreement, demand notice, and bank statement. The Corporate Debtor admitted the due amount but cited financial difficulties as the reason for non-payment.Upon reviewing the submissions, the Tribunal found that the Corporate Debtor acknowledged the liability and financial constraints, leading to no defense against the claim. The Tribunal noted that the Operational Creditor had established the debt, default, and absence of any dispute regarding the outstanding amount. The Tribunal also verified the notice sent under Section 8 of the Code, confirming the receipt by the Corporate Debtor without payment.Consequently, the Tribunal concluded that the Company Petition deserved admission due to the admitted default by the Corporate Debtor. The Operational Creditor successfully demonstrated the debt and default, meeting the legal requirements for admission under Section 9 of the Code. Thus, the Tribunal allowed the Company Petition, initiating the CIRP against the Corporate Debtor.The Tribunal appointed an Interim Resolution Professional and directed the Operational Creditor to deposit an initial amount towards CIRP costs. Additionally, the Tribunal issued orders for a moratorium on legal actions against the Corporate Debtor, continuation of essential services, and management transfer during the CIRP period. The public announcement of the insolvency resolution process was mandated, and necessary notifications were to be made to regulatory authorities.In conclusion, the Tribunal admitted the Company Petition, appointed an Interim Resolution Professional, and imposed necessary restrictions and directives to facilitate the Corporate Insolvency Resolution Process effectively.