Operational Creditor Granted CIRP Admission & Moratorium | Insolvency Law The Tribunal admitted the Corporate Debtor into Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, ...
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Operational Creditor Granted CIRP Admission & Moratorium | Insolvency Law
The Tribunal admitted the Corporate Debtor into Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016. A moratorium was declared under Section 14 of the Code, appointing an Insolvency Resolution Professional (IRP) to oversee the process. The Operational Creditor's application was found complete, meeting the prescribed threshold amount and limitations, leading to an ex-parte decision against the Corporate Debtor. The IRP was tasked with conducting the CIRP, ensuring the continuity of goods/services supply during the moratorium, with instructions for the Operational Creditor to pay an advance for the process.
Issues: Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 by Operational Creditor against Corporate Debtor.
Analysis: The Operational Creditor filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, citing a debt in default of Rs. 8,58,956/- including interest, with the default date as 16.08.2017. The Operational Creditor had a business relationship with the Corporate Debtor, supplying goods as per requirements. The debt amount included principal outstanding and interest. A demand notice was issued to the Corporate Debtor on 11.12.2019, which was delivered on 19.12.2019, but no repayment or response was received.
The Tribunal noted that the Operational Creditor had supplied goods and raised an invoice of Rs. 5,51,933/-, with supporting documents annexed. Despite multiple opportunities for the Corporate Debtor to contest the application, no appearance was made on its behalf. The Tribunal found the application complete under Section 9(5) of the IB Code, meeting the prescribed threshold amount and limitations. Consequently, the Tribunal decided to proceed ex-parte against the Corporate Debtor.
The Tribunal admitted the Corporate Debtor into CIRP, declaring a moratorium under Section 14 of the Code, prohibiting various actions against the Corporate Debtor's assets. An Insolvency Resolution Professional (IRP) was appointed from the list provided by IBBI. The IRP was directed to conduct the CIRP and make a public announcement, ensuring the continuity of goods/services supply to the Corporate Debtor during the moratorium period. The Operational Creditor was instructed to pay an advance to the IRP for the smooth conduct of CIRP.
The Tribunal directed the Registry to communicate the order to all relevant parties and upload it on the website. The application was allowed and disposed of, marking the completion of the proceedings.
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