2022 (2) TMI 459 - Tri - Insolvency and Bankruptcy

Company Petition Admitted: Corporate Insolvency Resolution Process Commenced

D.R.M. Prasada Rao Versus Confro Agros Ltd.

The Tribunal admitted the Company Petition and ordered the commencement of the Corporate Insolvency Resolution Process against the Corporate Debtor. Mr. ... 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 Counsel appearing for the Corporate Debtor does not deny the fact that the amount claimed by the Operational Creditor is due. Counsel for the Operational Creditor submits that though the Corporate Debtor took time on earlier occasions stating that they would settle the matter, it could not be done. The Counsel appearing for the Corporate Debtor submits that the Corporate Debtor is not in a position to discharge the amount due to the Operational Creditor and agreed for the CIRP to be initiated. It is a fit case to admit and initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor is ordered - petition admitted - moratorium declared. Issues:Initiation of Corporate Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code, 2016.Analysis:The petition was filed by an Operational Creditor seeking initiation of Corporate Insolvency Resolution Process against a Corporate Debtor for defaulting on a payment of professional fees. The Operational Creditor alleged that the Corporate Debtor owed an amount of Rs. 3,16,565 for liaising with departments and institutions for the financial year 2017-18. The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, along with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The Operational Creditor, being a professional, had issued a demand notice to the Corporate Debtor, who did not respond. The Corporate Debtor, in its counter, admitted the debt. The Counsel for the Operational Creditor requested the Tribunal to admit the Company Petition based on these grounds.The Counsel representing the Corporate Debtor did not dispute the amount owed to the Operational Creditor. Despite previous assurances of settling the matter, the Corporate Debtor expressed its inability to make the payment and agreed to the initiation of the Corporate Insolvency Resolution Process. Consequently, the Tribunal found it appropriate to admit the petition and order the commencement of the Corporate Insolvency Resolution Process against the Corporate Debtor. The Operational Creditor suggested a specific individual, Mr. Bala Subrahmanya Siva Prasad Varanasi, as the Insolvency Resolution Professional (IRP), who was duly appointed by the Tribunal.In the final order, the Tribunal admitted the Company Petition and directed the commencement of the Corporate Insolvency Resolution Process against the Corporate Debtor, with a stipulated completion period of 180 days. Mr. Bala Subrahmanya Siva Prasad Varanasi was appointed as the Interim Resolution Professional, with specific directions to take charge of the Corporate Debtor's management and proceed with the CIRP in accordance with the relevant sections of the Insolvency and Bankruptcy Code and associated rules. A moratorium was declared in respect of the Corporate Debtor, and the Directors, Promoters, or any other individuals associated with the management were instructed to cooperate with the IRP as per the provisions of the Code. The Registry was tasked with communicating the order to the concerned parties promptly, and both the Operational Creditor and the Registry were required to provide a copy of the order to the IRP for necessary compliance.