Tribunal Admits CIRP Application Against Private Company Over Unpaid Debt

The Tribunal admitted the application for initiation of Corporate Insolvency Resolution Process (CIRP) against a Private Limited Company due to undisputed unpaid operational debt of Rs. 82,27,392. An Interim Resolution Professional (IRP) was appointed to manage the CIRP, invoking a moratorium on the Corporate Debtor's affairs. The Operational Creditor was directed to deposit funds for the IRP's expenses, and cooperation from all personnel of the Corporate Debtor was mandated. Communication of the order to relevant parties and compliance with the Insolvency and Bankruptcy Code, 2016 provisions were required within a week.

---

---

Issues: Application under Section 9 of IBC for initiation of CIRP against a Private Limited Company for unpaid operational debt.

Analysis:
1. Jurisdiction and Timeliness: The Adjudicating Authority found the application in order, establishing jurisdiction due to the Respondent's registered office in Jaipur. The application was within the Law of Limitation, filed timely after the default date.

2. Service of Demand Notice: The demand notice in Form 3 dated 05.11.2019 was sent via registered post to the Respondent's registered office, with evidence of delivery attached to the application, ensuring proper service.

3. Dispute of Operational Debt: Despite the demand notice and application, the Respondent did not dispute the operational debt, nor provided any representation, establishing the lack of dispute regarding the liability towards the Operational Creditor.

4. Unpaid Operational Debt: The total outstanding amount of Rs. 82,27,392 was substantiated with the invoice, demand notice, and an affidavit confirming no dispute from the Respondent, leading to a clear default on payment.

5. Initiation of CIRP: Considering the non-payment and fulfillment of conditions under Section 9 of the Code, the Adjudicating Authority decided to initiate the Corporate Insolvency Resolution Process against the Respondent.

6. Appointment of IRP: The Operational Creditor did not propose an Interim Resolution Professional, leading the Authority to appoint Mr. Rajendra Singh Sunda as the IRP for the Corporate Debtor, with specified responsibilities under the Code.

7. Consequences of CIRP: Upon admission, the IRP is directed to take over the Corporate Debtor's affairs, invoke moratorium, and manage the CIRP as per the specified timelines. The Operational Creditor is directed to deposit funds for the IRP's expenses, and all personnel of the Corporate Debtor must cooperate with the IRP.

8. Communication and Compliance: The order's communication to all relevant parties, including the Applicant, Corporate Debtor, and IRP, along with informing the IBBI for records, is mandated within a week from the order date to ensure compliance with the Code.

In conclusion, the Tribunal admitted the application for initiation of CIRP against the Private Limited Company due to the undisputed unpaid operational debt, appointing an IRP to oversee the resolution process as per the provisions of the Insolvency and Bankruptcy Code, 2016.

---