Tribunal Admits CIRP Petition for Defaulted Payment, Appoints IRP, Declares Moratorium

The Tribunal admitted the petition for initiating Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor due to default in payment by the Debtor. The Operational Creditor's claim was deemed admissible, leading to the appointment of an Interim Resolution Professional (IRP). A moratorium was declared, prohibiting certain actions against the Corporate Debtor. The Tribunal directed the Operational Creditor to deposit funds with the IRP for preliminary expenses and scheduled a progress report for a future date.

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Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP).
2. Default in payment by the Corporate Debtor.
3. Admissibility of the Operational Creditor's claim.
4. Appointment of Interim Resolution Professional (IRP).
5. Declaration of moratorium.

Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, by the Operational Creditor, seeking initiation of CIRP against the Corporate Debtor. The Operational Creditor supplied fabrics based on purchase orders from the Corporate Debtor, who failed to make the agreed payments within 60 days.

2. Default in payment by the Corporate Debtor:
The Operational Creditor provided evidence of unpaid invoices and challans, reminders sent to the Corporate Debtor, and ledger statements reflecting the outstanding amount of Rs. 6,33,520/-. Despite part payments, a balance remained unpaid, and the Corporate Debtor acknowledged the debt but failed to settle it.

3. Admissibility of the Operational Creditor's claim:
The Corporate Debtor's reply included negotiations for returning unused lining cloths and a request to waive the interest. However, the Operational Creditor denied these claims, stating that only goods worth Rs. 99,987/- were returned post-application, reducing the claim to Rs. 5,33,533/-. The Corporate Debtor's admission of the debt and lack of plausible defense led to the acceptance of the Operational Creditor's claim.

4. Appointment of Interim Resolution Professional (IRP):
The Tribunal appointed Mr. Pratap Mukherjee as the IRP, as the Operational Creditor did not propose any name. The IRP was tasked with ascertaining the particulars of creditors, convening a Committee of Creditors, and evolving a resolution plan within 105 days.

5. Declaration of moratorium:
A moratorium was declared as per Sections 13 and 15 of the Insolvency & Bankruptcy Code, 2016, prohibiting:
a) Institution or continuation of suits or proceedings against the Corporate Debtor.
b) Transfer, encumbrance, or disposal of the Corporate Debtor's assets.
c) Actions to foreclose or enforce security interests.
d) Recovery of property by owners or lessors.

The moratorium is effective from the date of admission till the completion of the CIRP, ceasing upon approval of a resolution plan or liquidation order.

Conclusion:
The Tribunal admitted the petition for initiating CIRP against the Corporate Debtor, declared a moratorium, and appointed an IRP. The Operational Creditor was directed to deposit Rs. 1,00,000/- with the IRP for preliminary expenses. The Registry was instructed to communicate the order to all concerned parties, with the matter listed for a progress report on 10/08/2022.

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