2022 (6) TMI 384 - Tri - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process Initiated for M/s Swati Cast & Forge Pvt. Ltd.

The petition was admitted for the initiation of the Corporate Insolvency Resolution Process (CIRP) for the corporate debtor, M/s Swati Cast & Forge ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Service of demand notice - time limitation - whether the demand notice in Form 3 dated 29.08.2019 was properly served? - HELD THAT:- The petitioner has placed a tracking report, whereunder it was stated that the speed post was delivered to the corporate debtor. Whether the operational debt was disputed by the corporate debtor? - HELD THAT:- It is to be noted that respondentcorporate debtor in its reply has admitted that its liability and inability to pay the debt. Moreover, petitioner has appended affidavit u/s 9(3)(b) stating that corporate debtor has not issued any notice or raised any dispute regarding the debt for which the present petition has been filed by the operational creditor. Whether this application is filed within limitation? - HELD THAT:- This application was filed on 19.09.2019 vide Diary No.4927. Whereas the date of default is 07.03.2017 i.e. date of written acknowledgement of the debt, therefore, this Adjudicating Authority finds that this application has been filed within limitation. Apart liability of debt is admitted by respondent-corporate debtor. There is a total unpaid operational debt Rs.2,37,8812/-(Rs. 882128/- plus delayed payment interest @ 24 % p.a. amounting to Rs.1,44,6684/- and legal fee of Rs.50,000/-). The operational creditor has provided Labour Job Forging to the corporate debtor and raised invoices attached as Annexure-4. Accordingly, the petitioner proved the debt and the default, which is more than Rupees one lakh (prior to the amendment in threshold limit of one crore vide notification No. S.O.1205(E) dated 24.03.2020) by the respondent-corporate debtor - It is noted that the corporate debtor has failed to make payment of the aforesaid amount due as mentioned in the statutory notice till date. Thus, the conditions under Section 9 of the Code stand satisfied. It is evident that from the facts that the liability of the corporate debtor is undisputed. Accordingly, the petitioner proved the debt and the default, which is above threshold limit. In the present petition all the aforesaid requirements have been satisfied. It is seen that the petition preferred by the petitioner is complete in all respects. The material on record clearly goes to show that the respondent committed default in payment of the claimed operational debt even after demand made by the petitioner. Application admitted - moratorium declared. Issues involved:1. Validity of the demand notice served2. Dispute over the operational debt3. Timeliness of the application4. Satisfaction of conditions under Section 9 of the Insolvency and Bankruptcy CodeValidity of the demand notice served:The petitioner submitted a tracking report indicating proper service of the demand notice to the corporate debtor through speed post. The report confirmed delivery to the corporate debtor. This issue was crucial in determining the initiation of the Corporate Insolvency Resolution Process (CIRP).Dispute over the operational debt:The respondent-corporate debtor, in its reply, acknowledged its liability and inability to pay the debt, indicating a lack of dispute over the operational debt. Additionally, the petitioner provided an affidavit stating that the corporate debtor did not raise any dispute regarding the debt, further supporting the petitioner's claim.Timeliness of the application:The application was filed within the statutory limitation period, with the default date being acknowledged as 07.03.2017. The application was submitted on 19.09.2019, well within the limitation period. The respondent-corporate debtor's admission of liability further strengthened the timeliness of the application.Satisfaction of conditions under Section 9 of the Insolvency and Bankruptcy Code:The petitioner successfully demonstrated the existence of a total unpaid operational debt, including interest and legal fees, exceeding the threshold limit. The corporate debtor failed to make payments despite demand, leading to the satisfaction of conditions under Section 9(5)(i) of the Code. Consequently, the petition was admitted for the initiation of the CIR Process for the corporate debtor.The Tribunal acknowledged the completeness of the petition, the undisputed liability of the corporate debtor, and the petitioner's fulfillment of all necessary requirements. Consequently, the petition was admitted for the initiation of the CIR Process for the corporate debtor, M/s Swati Cast & Forge Pvt. Ltd. The Tribunal also directed the imposition of a moratorium under Section 14 of the Code, suspending certain actions against the corporate debtor's assets.The Tribunal appointed an Interim Resolution Professional, Mr. Pawan Sharma, with specific directions regarding his role, responsibilities, and the management of the corporate debtor's affairs during the CIR Process. The order of moratorium was to remain in effect until the completion of the corporate insolvency resolution process or until the approval of a resolution plan or liquidation order.Furthermore, the petitioner was directed to deposit a specified amount with the Interim Resolution Professional to cover immediate CIRP expenses, which would be reimbursed by the Committee of Creditors. The Tribunal emphasized the importance of cooperation from all parties involved and set forth detailed instructions for the Interim Resolution Professional to follow throughout the resolution process.