Tribunal admits CIRP application, declares moratorium for Corporate Debtor

The Tribunal admitted the application for Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency & Bankruptcy Code, 2016, against the Corporate Debtor, declaring a moratorium. Substituted service was permitted for notice to the Corporate Debtor. The debt and default were determined, finding no dispute on the amount due. The application was filed within the limitation period. An Interim Resolution Professional (IRP) was appointed, and a moratorium was declared until CIRP completion or liquidation. The IRP was tasked with managing the Corporate Debtor and complying with relevant provisions of the IBC, 2016.

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Issues Involved:
1. Admission of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency & Bankruptcy Code, 2016.
2. Service of notice to the Corporate Debtor.
3. Determination of debt and default.
4. Limitation period for filing the application.
5. Appointment of Interim Resolution Professional (IRP).
6. Declaration of moratorium.

Issue-wise Detailed Analysis:

1. Admission of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency & Bankruptcy Code, 2016:
The application CP(IB)/1(CHE)/2021 was filed by the Operational Creditor under Section 9 of IBC, 2016, seeking initiation of CIRP against the Corporate Debtor. The Operational Creditor claimed an outstanding amount of Rs. 8,02,39,787/- including interest at 24% p.a. The Tribunal admitted the application, initiating CIRP against the Corporate Debtor and declared a moratorium.

2. Service of notice to the Corporate Debtor:
The Tribunal noted that several attempts were made to serve notice to the Corporate Debtor at its registered office and other known addresses, all of which were returned with endorsements like 'unclaimed', 'left', and 'no such office'. The Tribunal permitted substituted service through newspaper publication. The Operational Creditor effected publication in Makkal Kural and Indian Express, and the Corporate Debtor was set ex-parte. The Tribunal referenced the Hon'ble NCLAT decisions in Shri Bijay Pratap Singh -Vs-Unimax International and Ashok Agarwal -Vs- Amitex Polymers Private Limited, affirming that service of notice under Section 8 of IBC, 2016 via official email ID or registered office is valid and proper.

3. Determination of debt and default:
The Corporate Debtor acknowledged a debt of Rs. 3,90,38,461/- as on 31.03.2018. The Tribunal found no dispute raised by the Corporate Debtor regarding the amount due. The Tribunal concluded that there was an 'operational debt' and the Corporate Debtor had committed 'default' in repayment.

4. Limitation period for filing the application:
The invoices were raised between 28.04.2016 and 23.05.2016, with the last payment made on 30.06.2018. The application was filed on 16.12.2020, within the limitation period. The Tribunal noted that the default occurred before the Covid-19 pandemic, thus Section 10A of IBC, 2016 was not applicable.

5. Appointment of Interim Resolution Professional (IRP):
The Tribunal appointed Mr. Kabiladoss R. as the IRP, as the Operational Creditor did not propose a name. The IRP was directed to take charge of the Corporate Debtor's management immediately, make a public announcement, and call for creditor claims. The IRP was also instructed to file a report within 30 days and comply with Sections 13(2), 15, 17, and 18 of IBC, 2016.

6. Declaration of moratorium:
The Tribunal declared a moratorium under Section 14(1) of IBC, 2016, prohibiting suits, asset transfers, foreclosure actions, and recovery of property. The moratorium period would last until the completion of CIRP or approval of a resolution plan or liquidation order. The Tribunal also directed the IRP to ensure the supply of essential goods or services during the moratorium.

Conclusion:
The application for initiating CIRP was admitted, and a moratorium was declared. The IRP was appointed and directed to take necessary steps for managing the Corporate Debtor and conducting the CIRP. The Tribunal scheduled the next hearing for 25.04.2022.

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