2022 (4) TMI 80 - Tri - Insolvency and Bankruptcy

Tribunal Admits Company Petition under Insolvency Code Section 9: Corporate Debtor Faces CIRP

Satyam Traders Versus Subhlaxmi Compusis Private Limited

Satyam Traders Versus Subhlaxmi Compusis Private Limited - TMI Issues:1. Company Petition under section 9 of the Insolvency and Bankruptcy Code, 2016.2. Failure of Corporate Debtor to make payment leading to Corporate Insolvency Resolution Process (CIRP).3. Dispute over outstanding dues between Operational Creditor and Corporate Debtor.4. Admittance of default by Corporate Debtor but failure to settle dues.5. Legal procedures and orders for initiating CIRP and appointing Interim Resolution Professional.Issue 1: Company Petition under section 9 of the Insolvency and Bankruptcy Code, 2016The Tribunal, in response to a Company Petition filed under section 9 of the Insolvency and Bankruptcy Code, 2016, by an Operational Creditor against a Corporate Debtor, examined the grounds of the petition. The petition highlighted the failure of the Corporate Debtor to make a payment of a significant sum, leading to the initiation of the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor provided detailed evidence of invoices issued, notices sent, and the subsequent lack of payment from the Corporate Debtor.Issue 2: Failure of Corporate Debtor to make payment leading to Corporate Insolvency Resolution Process (CIRP)The Tribunal noted that the Corporate Debtor had failed to make a payment of a substantial amount, as evidenced by invoices and notices provided by the Operational Creditor. Despite the Corporate Debtor acknowledging the outstanding dues and expressing willingness to settle the matter, no concrete steps were taken to clear the debts. The Tribunal found the petition to be complete in all legal aspects, establishing the default by the Corporate Debtor, exceeding the minimum amount stipulated under the Code.Issue 3: Dispute over outstanding dues between Operational Creditor and Corporate DebtorThe Tribunal observed that the Corporate Debtor did not dispute the services provided by the Operational Creditor or deny the existence of outstanding dues. Despite admitting their willingness to settle the dues, the Corporate Debtor failed to take any substantial action towards resolving the matter. The lack of response or appearance by the Corporate Debtor in subsequent proceedings further solidified the Operational Creditor's claim regarding the default in payment.Issue 4: Admittance of default by Corporate Debtor but failure to settle duesThe Tribunal highlighted the admission of default by the Corporate Debtor in their communication with the Operational Creditor. However, the lack of proactive measures to clear the dues, coupled with the absence of any response or appearance in the legal proceedings, indicated a significant lapse on the part of the Corporate Debtor. This non-compliance and inaction further supported the Tribunal's decision to admit the Company Petition and initiate the CIRP against the Corporate Debtor.Issue 5: Legal procedures and orders for initiating CIRP and appointing Interim Resolution ProfessionalIn its final orders, the Tribunal admitted the Company Petition, initiating the Corporate Insolvency Resolution Process against the Corporate Debtor. The Tribunal imposed a moratorium under section 14 of the IBC, appointed an Interim Resolution Professional (IRP), and directed the management of the Corporate Debtor to vest in the IRP during the CIRP period. Various procedural requirements, including public announcements, progress reports, and financial deposits, were outlined to ensure the smooth progress of the resolution process.---