Petition Admitted: Corporate Insolvency Process Initiated under Section 9

The tribunal admitted the petition under Section 9 of the Insolvency and Bankruptcy Code, initiating Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. A moratorium was declared, an Interim Resolution Professional (IRP) appointed, and specific directions were given for the CIRP process. The tribunal found the evidence presented by the Operational Creditor sufficient to establish the debt and default, leading to the admission of the petition and commencement of the insolvency proceedings.

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Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP)
2. Existence of Debt and Default
3. Validity of Demand Notice and Response
4. Appointment of Interim Resolution Professional (IRP)
5. Declaration of Moratorium

Issue-wise Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
The petition under Section 9 of the Insolvency and Bankruptcy Code (IBC) was filed by the Operational Creditor seeking initiation of CIRP against the Corporate Debtor. The Operational Creditor supplied Alloys Steel Bar/Round and raised invoices amounting to Rs. 8,74,459/- for sales made between 18th July 2018 and 25th July 2018. The Corporate Debtor made a partial payment of Rs. 2,00,000/- on 6th April 2019, leaving an outstanding balance of Rs. 6,74,459/- plus 18% interest. Despite several requests, the Corporate Debtor defaulted in making further payments.

2. Existence of Debt and Default:
The Operational Creditor provided evidence of the outstanding debt through GST B2B invoices and a bank statement showing no further payments after 6th April 2019. The Corporate Debtor acknowledged the liability but failed to clear the dues. The Corporate Debtor argued that the application was not maintainable, citing no record of default with the information utility and disputing the existence of debt and default. However, the tribunal found the Operational Creditor's evidence sufficient to establish the debt and default.

3. Validity of Demand Notice and Response:
The Operational Creditor issued a Demand Notice on 1st July 2019, demanding Rs. 8,22,800/- inclusive of interest. The notice was duly served, but no reply was received from the Corporate Debtor. According to Section 8(2) of the IBC, the Corporate Debtor had ten days to bring any dispute or proof of payment to the notice of the Operational Creditor, which it failed to do. The Corporate Debtor's subsequent reply to the petition contained vague grounds and was not convincing to the tribunal.

4. Appointment of Interim Resolution Professional (IRP):
The Operational Creditor did not propose the name of any Insolvency Resolution Professional. Consequently, the tribunal appointed Mr. Nitin Daga as the IRP, as per Section 16(3)(a) of the IBC. The IRP was tasked with filing Form-2 and ensuring no disciplinary proceedings were pending against him.

5. Declaration of Moratorium:
The tribunal declared a moratorium in accordance with Sections 13, 14, and 15 of the IBC. The moratorium prohibits:
a. Institution or continuation of suits or proceedings against the Corporate Debtor.
b. Transferring or disposing of any assets by the Corporate Debtor.
c. Foreclosure or enforcement of any security interest.
d. Recovery of any property by an owner or lessor.
The moratorium will remain effective until the completion of the CIRP or until the tribunal approves a resolution plan or orders liquidation.

Orders:
1. The petition under Section 9 of the IBC for initiating CIRP against the Corporate Debtor is admitted.
2. A moratorium is declared, and a public announcement is to be made immediately.
3. Mr. Nitin Daga is appointed as the IRP.
4. The Operational Creditor is directed to deposit Rs. 1,00,000/- with the IRP within three days.
5. The IRP is to convene a meeting of the Committee of Creditors and identify a prospective Resolution Applicant within 105 days.
6. The registry is directed to communicate the order to all concerned parties by Speed Post and email.
7. The matter is listed for filing a Progress Report on 15/03/2022.

The tribunal concluded that the petition was complete in all respects and found it fit to admit the petition and initiate CIRP against the Corporate Debtor.

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