Tribunal Admits CIRP Application, Appoints IRP, Validates Creditor's Claim

The tribunal admitted the Corporate Insolvency Resolution Process (CIRP) application, declaring a moratorium and appointing an Interim Resolution Professional (IRP). The Operational Creditor's claim for unpaid fees was deemed valid, and the Corporate Debtor's defenses were dismissed as frivolous. The IRP was directed to manage the CIRP proceedings, including public announcements and claims submission, while the moratorium protected the Corporate Debtor from legal actions until resolution. Mr. Manish Jain was appointed as the IRP, and the Operational Creditor was instructed to deposit funds for preliminary expenses. The matter was scheduled for a progress report filing.

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Issues Involved:
1. Existence of Operational Debt and Default.
2. Validity of Demand Notice.
3. Pre-existing Disputes.
4. Admission of Corporate Insolvency Resolution Process (CIRP).

Issue-wise Detailed Analysis:

1. Existence of Operational Debt and Default:
The Operational Creditor, engaged in real estate consulting, facilitated a transaction between the Corporate Debtor and ESAB India Ltd. An agreement was executed in March 2017, and the Operational Creditor's fee was confirmed at Rs. 1,00,00,000/- plus taxes, payable upon invoice receipt. The invoice dated 31st January 2018, amounting to Rs. 1,18,00,000/- inclusive of GST, was delivered to the Corporate Debtor, with payment due on 2nd March 2018. Despite multiple reminders, the Corporate Debtor failed to pay. The Operational Creditor issued a notice under section 8 of IBC on October 15, 2020, demanding payment within 10 days. The Corporate Debtor denied receiving the invoice and claimed ignorance of the transaction.

2. Validity of Demand Notice:
The Corporate Debtor argued that the demand notice was defective and not in the prescribed form, thus invalid. However, the Operational Creditor maintained that all procedural formalities were duly complied with, including the filing of an affidavit under section 9(3)(b). The tribunal found the petition complete in all respects.

3. Pre-existing Disputes:
The Corporate Debtor contended that there were pre-existing disputes regarding the property, including its classification as agricultural land and issues with obtaining necessary clearances. They also claimed that the Operational Creditor misrepresented the property's status. The Operational Creditor denied these allegations, stating that the scope of their service was limited to executing the agreement for sale. The tribunal found no genuine or pre-existing disputes that could invalidate the claim.

4. Admission of Corporate Insolvency Resolution Process (CIRP):
The tribunal, after considering the documents and arguments, found that the Operational Creditor had a valid claim and that the Corporate Debtor's defenses were frivolous. The tribunal admitted the application under Section 9 of the Insolvency & Bankruptcy Code, 2016, and declared a moratorium as per Sections 13 and 15 of the I & B Code, 2016. An Interim Resolution Professional (IRP) was appointed to initiate the Corporate Insolvency Resolution Process.

Orders:
1. The application for initiating CIRP against the Corporate Debtor is admitted.
2. A moratorium is declared in accordance with Sections 13 and 15 of the I & B Code, 2016.
3. The IRP is to make a public announcement and call for claims submission.
4. The moratorium prohibits suits, asset transfers, foreclosure actions, and property recovery against the Corporate Debtor.
5. Essential goods or services to the Corporate Debtor shall not be interrupted during the moratorium.
6. The moratorium remains effective until the completion of the CIRP or approval of a resolution plan.
7. Mr. Manish Jain is appointed as the IRP, subject to compliance with requisite formalities.
8. The Operational Creditor is directed to deposit Rs. 2,00,000/- with the IRP for preliminary expenses and fees.
9. The registry is directed to communicate the order to all concerned parties.
10. The matter is listed for filing of the progress report on 12/07/2022.

Conclusion:
The tribunal admitted the CIRP application, finding that the Operational Creditor's claim was valid and that the Corporate Debtor's defenses were insufficient to dispute the debt. The process for resolving the Corporate Debtor's insolvency was initiated, with specific directives for the IRP and the moratorium period.

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