NCLT Chandigarh: Proper Service of Demand Notice, Uncontested Debt, and Appointment of Interim Resolution Professional

The National Company Law Tribunal, Chandigarh Bench found the demand notice properly served and the operational debt undisputed. The application was timely filed, meeting the conditions under Section 9 of the Insolvency and Bankruptcy Code. An Interim Resolution Professional was appointed, and directions were given for a moratorium on certain actions and management of the corporate debtor's affairs. The petitioner was required to deposit funds for immediate expenses of the Corporate Insolvency Resolution Process, recoverable as part of the process costs.

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Issues Involved:
1. Validity of demand notice served to the corporate debtor
2. Dispute regarding the operational debt by the corporate debtor
3. Timeliness of the application filed
4. Satisfaction of conditions under Section 9 of the Insolvency and Bankruptcy Code
5. Appointment of Interim Resolution Professional
6. Directions for moratorium and management of corporate debtor's affairs
7. Deposit for immediate expenses of the Corporate Insolvency Resolution Process (CIRP)

Detailed Analysis:

1. Validity of Demand Notice:
The Tribunal considered whether the demand notice in Form 3 dated 31.07.2018 was properly served. The service through publication was done, and it was noted that the operational debtor did not appear despite repeated service, leading to the respondent being set ex parte.

2. Dispute Regarding Operational Debt:
The issue of whether the operational debt was disputed by the corporate debtor was examined. It was highlighted that the corporate debtor did not appear despite repeated service and was set ex parte. The petitioner affirmed that the corporate debtor did not issue any notice or raise any dispute regarding the debt, supporting the initiation of the petition.

3. Timeliness of Application:
The Tribunal reviewed whether the application was filed within the limitation period. The application was filed on 23.01.2020, whereas the default date was 21.01.2019, indicating that the application was timely filed within the limitation period.

4. Satisfaction of Conditions under Section 9:
The Tribunal assessed the satisfaction of conditions under Section 9 of the Code. It was established that the petitioner proved the debt and default, exceeding the threshold limit, leading to the admission of the petition for the initiation of the Corporate Insolvency Resolution Process.

5. Appointment of Interim Resolution Professional:
Ms. Shilpa Singhal was appointed as the Interim Resolution Professional, with specific directions regarding her term of appointment, responsibilities, and filing requirements. The powers of the Board of Directors were suspended, and management vested in the Interim Resolution Professional.

6. Moratorium and Management of Affairs:
The Tribunal directed a moratorium on certain actions, including suits against the corporate debtor and asset disposal, with provisions for essential goods or services supply. The Interim Resolution Professional was tasked with managing the affairs of the corporate debtor and preparing an inventory of assets.

7. Deposit for Immediate Expenses:
The petitioner was instructed to deposit a specified amount with the Interim Resolution Professional to cover immediate expenses of the CIRP. This amount would be reimbursed by the Committee of Creditors and recovered as part of the CIRP costs.

This comprehensive analysis covers the key issues addressed in the judgment delivered by the National Company Law Tribunal, Chandigarh Bench.

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