Adjudication: Initiating Corporate Insolvency Resolution Process

The Adjudicating Authority found the petition complete and compliant with Section 9(5)(i) of the Insolvency and Bankruptcy Code. The petitioner proved the debt and default, with the corporate debtor failing to pay post-demand notice, confirming the undisputed debt. Consequently, the Authority admitted the petition, initiating Corporate Insolvency Resolution Process for Fairwealth Housing Pvt. Ltd. Moratorium under Section 14 was imposed, appointing an Interim Resolution Professional, with specific directions and obligations outlined for compliance with the Code and ethical standards. The petitioner was required to deposit funds for CIRP expenses, to be reimbursed by the Committee of Creditors. Immediate implementation of the order was mandated.

---

---

Issues:
1. Validity of demand notice service
2. Dispute of operational debt by corporate debtor
3. Timeliness of the application

Issue 1: Validity of Demand Notice Service
The petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 sought to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Fairwealth Housing Pvt. Ltd. The petitioner, an Operational Creditor, claimed non-payment of dues. The Adjudicating Authority examined the service of the demand notice in Form 3 dated 09.09.2019. The petitioner provided a tracking report indicating delivery to the corporate debtor. As the corporate debtor did not appear despite service, the Authority proceeded ex parte.

Issue 2: Dispute of Operational Debt
Another crucial issue was whether the operational debt was disputed by the corporate debtor. The corporate debtor's non-appearance led to being set ex parte. The petitioner affirmed that no notice or dispute regarding the debt was raised by the corporate debtor. The lack of response from the corporate debtor and the petitioner's compliance with Section 9(3)(b) strengthened the petitioner's claim.

Issue 3: Timeliness of the Application
The Adjudicating Authority also assessed the timeliness of the application. The petition was filed on 18.11.2019, within the limitation period from the default date of 01.07.2019. This timely filing aligned with the requirements under the Code.

Conclusion
The Adjudicating Authority found the petition complete and in compliance with Section 9(5)(i) of the Code. The petitioner demonstrated the debt and default exceeding the threshold limit. The corporate debtor's failure to pay the claimed amount post-demand notice confirmed the debt's undisputed nature. Consequently, the Authority admitted the petition, initiating CIRP for Fairwealth Housing Pvt. Ltd. Moratorium under Section 14 was imposed, appointing an Interim Resolution Professional. The order detailed various directions for the Interim Resolution Professional's actions, emphasizing compliance with the Code and ethical standards. The petitioner was directed to deposit a specific amount for CIRP expenses, to be reimbursed by the Committee of Creditors. The order's communication to the parties and the Interim Resolution Professional was mandated for immediate implementation.

---