Adjudicating Authority Initiates Corporate Insolvency Resolution Process

The Adjudicating Authority confirmed proper service of the demand notice, undisputed operational debt by the corporate debtor, and timely filing of the application. The Authority admitted the petition, initiating the Corporate Insolvency Resolution Process (CIRP) for the Corporate Debtor, imposing a moratorium under Section 14 of the Insolvency and Bankruptcy Code. Mr. Harsh Garg was appointed as the Interim Resolution Professional to manage the affairs of the Corporate Debtor, with directions to constitute a Committee of Creditors and provide progress reports. The petitioner was directed to deposit funds for immediate CIRP expenses.

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Issues:
1. Proper service of demand notice
2. Disputed operational debt by the corporate debtor
3. Filing of the application within limitation

Analysis:

Issue 1: Proper service of demand notice
The petitioner served a demand notice in Form 3 dated 20.07.2020 to the operational creditor through email, which was not bounced back, as evidenced by the reply received. The Adjudicating Authority found that the demand notice was properly served, meeting the requirements under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC).

Issue 2: Disputed operational debt by the corporate debtor
Despite repeated service, the corporate debtor did not appear, and the petitioner's affidavit stated that the outstanding dues were not cleared even after the demand notice. The corporate debtor mentioned that payments would be made after receiving funds from another entity. The lack of response from the corporate debtor and the petitioner's submission indicated an undisputed liability, satisfying the conditions under Section 9 of the Code.

Issue 3: Filing of the application within limitation
The application was filed on 17.09.2020, within the limitation period, as the default occurred on 17.10.2019. The Adjudicating Authority confirmed that the application was timely filed, meeting the statutory requirements.

The Adjudicating Authority reviewed the complete petition, confirming the unpaid operational debt of Rs. 1,27,40,356, and the petitioner's compliance with all necessary documentation and forms. The Authority admitted the petition, initiating the Corporate Insolvency Resolution Process (CIRP) for the Corporate Debtor. The Authority also imposed a moratorium under Section 14 of the Code, restricting certain actions against the Corporate Debtor's assets.

Additionally, the Authority appointed an Interim Resolution Professional, Mr. Harsh Garg, with specific directions regarding the management of the Corporate Debtor's affairs, cooperation requirements, and reporting obligations. The Interim Resolution Professional was tasked with constituting a Committee of Creditors and providing regular progress reports to the Tribunal.

The petitioner was directed to deposit a specified amount with the Interim Resolution Professional for immediate CIRP expenses, to be reimbursed by the Committee of Creditors. The order was communicated to both parties, and the Registry was instructed to provide a copy to the Interim Resolution Professional promptly.

In conclusion, the petition was allowed and admitted, setting the CIRP process in motion for the Corporate Debtor, M/s SNH Construction Private Limited.

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