2021 (12) TMI 906 - Tri - Insolvency and Bankruptcy

Corporate insolvency proceedings initiated against Debtor under Insolvency and Bankruptcy Code

Venketesh Udyog Versus Biharilal Greenwood Pvt. Ltd.

The Tribunal admitted the petition under section 9 of the Insolvency and Bankruptcy Code, 2016, initiating corporate insolvency resolution against the ... 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:- The Operational Creditor has enclosed the copy of the Bank Statement indicating that the advance money had been paid in part, of which was adjusted against the goods received from the Corporate Debtor and for the remaining amount, the Corporate Debtor has failed to refund - This is a clear cut case, in which the Corporate Debtor should have either supplied goods or refunded the amount or at least replied to the notice under section 8 of the Act raising any pre-existing dispute if they had any but they have missed the golden opportunity by not replying to the notice under section 8 of the IBC. The Operational Creditor has a good case. In this petition also the Corporate Debtor has not either appeared or opted to file any reply through its authorised representative. So on both these counts, the Corporate Debtor has failed to defend itself - there is no hesitation in accepting and admitting the petition and order initiation of CIRP against the Corporate Debtor in this matter. Application admitted - moratorium declared. Issues Involved:Petition under section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of corporate insolvency resolution process.Detailed Analysis:1. Background of the Case: The petition was filed by the Operational Creditor, seeking initiation of corporate insolvency resolution process against the Corporate Debtor due to non-supply of goods and failure to refund the advance payment made by the Operational Creditor. The agreement between the parties and the subsequent actions of the Corporate Debtor were outlined in the petition.2. Default and Communication Attempts: The Operational Creditor made advance payments to the Corporate Debtor for goods, but the Corporate Debtor failed to supply the agreed quantity. Despite repeated requests, including emails, letters, and notices, the Corporate Debtor did not respond or refund the outstanding amount along with interest.3. Legal Proceedings: The Operational Creditor filed a petition under section 9 of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor was proceeded ex parte as they did not appear or file a reply. The Operational Creditor provided evidence of the default, including bank statements and communication records.4. Judicial Decision: The Tribunal found the case to be clear-cut, with the Corporate Debtor failing to supply goods, refund the amount, or respond to legal notices. As a result, the petition was admitted, and corporate insolvency resolution process was initiated against the Corporate Debtor.5. Appointment of Interim Resolution Professional: The Tribunal appointed Ms. Meera Prasad as the Interim Resolution Professional to manage the insolvency resolution process. The Operational Creditor proposed the name of the professional, and the appointment was made after ensuring no pending disciplinary proceedings against her.6. Orders and Moratorium: The Tribunal declared a moratorium, initiated public announcements, and prohibited certain actions against the Corporate Debtor during the insolvency resolution process. Essential goods or services were to be continued, and specific transactions exempted from the moratorium were outlined.7. Further Directions: The Interim Resolution Professional was directed to convene a meeting of the Committee of Creditors, identify a Resolution Applicant, and submit a resolution plan within the specified timeline. The Operational Creditor was directed to deposit a certain amount with the Interim Resolution Professional.8. Communication and Future Proceedings: The Registry was directed to communicate the order to all relevant parties, and a progress report filing date was set. Certified copies of the order would be issued upon compliance with formalities.This detailed analysis covers the key aspects of the judgment, including the background of the case, legal proceedings, judicial decision, appointment of professionals, orders, moratorium, further directions, and communication of the decision to the parties involved.