Insolvency Application Admitted: Moratorium Declared, IRP Appointed

The Tribunal admitted the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, declaring a moratorium and appointing an Interim Resolution Professional (IRP) to manage the Corporate Insolvency Resolution Process. The Corporate Debtor's defenses were deemed weak and unsupported, leading to the initiation of the insolvency proceedings.

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Issues Involved:

1. Initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Alleged non-payment for supplied goods.
3. Dispute regarding the delivery of goods.
4. Legitimacy of the security cheque.
5. Allegations of forgery and fraud.
6. Requirement of a full-fledged trial for adjudication.
7. Moratorium and appointment of Interim Resolution Professional (IRP).

Detailed Analysis:

1. Initiation of Corporate Insolvency Resolution Process (CIRP):
The petition was filed by Venus Creation seeking initiation of CIRP against the Corporate Debtor under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Tribunal convened via video conference to hear the petition.

2. Alleged Non-Payment for Supplied Goods:
The Operational Creditor claimed that the Corporate Debtor placed a work order for gold ornaments worth Rs. 8,93,911/-, which were supplied and received by the Corporate Debtor. The payment made via cheque was dishonored due to insufficient funds.

3. Dispute Regarding the Delivery of Goods:
The Corporate Debtor denied receiving the gold ornaments and claimed that the cheque was issued as a security cheque, not for an actual transaction. The Corporate Debtor alleged that the Operational Creditor did not deliver the goods and was attempting to recover losses through fraudulent means.

4. Legitimacy of the Security Cheque:
The Corporate Debtor argued that the cheque issued was a security cheque, not meant for encashment without the delivery of goods. The Operational Creditor refuted this, stating that the goods were delivered and verified as good by the Corporate Debtor.

5. Allegations of Forgery and Fraud:
The Corporate Debtor accused the Operational Creditor of forgery and fraud, alleging that the Operational Creditor forged the signature and stamp on the invoice. The Tribunal found these claims improbable and unsupported by evidence.

6. Requirement of a Full-Fledged Trial:
The Corporate Debtor contended that the issues required a full-fledged trial with evidentiary proof and cross-examination. However, the Tribunal noted that the dispute raised by the Corporate Debtor was illusory and lacked substance.

7. Moratorium and Appointment of Interim Resolution Professional (IRP):
The Tribunal admitted the application for initiating CIRP and declared a moratorium in accordance with Sections 13 and 15 of the Insolvency and Bankruptcy Code, 2016. Ms. Rachna Jhunjhunwala was appointed as the Interim Resolution Professional (IRP) to manage the CIRP process and convene a Committee of Creditors.

Orders Passed:
1. The application under Section 9 of the Insolvency and Bankruptcy Code, 2016, was admitted.
2. A moratorium was declared, prohibiting suits, asset transfers, and recovery actions against the Corporate Debtor.
3. Ms. Rachna Jhunjhunwala was appointed as the Interim Resolution Professional (IRP).
4. The IRP was directed to convene a meeting of the Committee of Creditors and identify a prospective Resolution Applicant within 105 days.
5. The Operational Creditor was directed to deposit Rs. 1,00,000/- with the IRP for preliminary expenses and fees.
6. The Registry was instructed to communicate the order to all concerned parties and list the matter for a progress report on 22/08/2022.

Conclusion:
The Tribunal found the defenses raised by the Corporate Debtor to be weak and unsupported by evidence, thereby admitting the CIRP application and appointing an IRP to proceed with the insolvency resolution process.

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