Tribunal grants insolvency petition under Section 9

The Tribunal admitted the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against the respondent company for an unpaid debt. The demand notice was validly served, the debt was undisputed, and the application was timely filed. Consequently, a moratorium was imposed, appointing an Interim Resolution Professional to manage the debtor's affairs and initiate the insolvency resolution process. The petitioner was directed to deposit funds for immediate expenses, and the resolution process would proceed under the supervision of the appointed professional and a Committee of Creditors.

---

---

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

Issue 1: Validity of Demand Notice Service
The petitioner filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the respondent, a company named Crest Steel UNA Private Limited. The petitioner claimed an amount in default of Rs. 1,52,47,560/- with interest. The first issue addressed was the proper service of the demand notice in Form 3 dated 30.10.2019. The petitioner provided a tracking report indicating that the speed post was delivered to the corporate debtor, establishing the service of the notice.

Issue 2: Disputed Operational Debt
The next issue examined was whether the operational debt was disputed by the corporate debtor. The respondent admitted its liability and inability to pay the debt in its reply. The petitioner also submitted an affidavit stating that the corporate debtor did not raise any dispute regarding the debt. This admission of liability and lack of dispute supported the petitioner's claim for initiating the CIRP.

Issue 3: Timeliness of the Application
Another issue considered was the timeliness of the application. The petition was filed on 15.11.2019, within the limitation period, as the due date of the debt was 02.09.2019. The Adjudicating Authority found the application to be within the prescribed time limit. Additionally, since the respondent admitted the debt and default, the application was deemed timely and valid.

The Tribunal reviewed the complete petition, confirming the unpaid operational debt amount and interest. The corporate debtor failed to make the payment mentioned in the statutory notice, meeting the conditions under Section 9 of the Code. The liability of the corporate debtor was admitted and undisputed, satisfying the threshold for initiating the CIRP. Consequently, the petition was admitted, and a moratorium was imposed, appointing an Interim Resolution Professional. The order of moratorium would remain in effect until the completion of the insolvency resolution process or liquidation of the corporate debtor. The appointed professional was directed to manage the affairs of the corporate debtor, prepare asset inventories, and follow all legal and ethical guidelines.

Furthermore, the Interim Resolution Professional was instructed to make a public announcement, constitute a Committee of Creditors, and submit progress reports regularly. The petitioner was required to deposit a specified amount with the Interim Resolution Professional for immediate CIRP expenses. The Tribunal directed communication of the order to both parties and the appointed professional promptly. The detailed directions aimed at ensuring a structured and transparent resolution process for the corporate debtor's financial obligations.

---