Tribunal Admits Application Under Insolvency Code for Corporate Debt Default

The Tribunal admitted the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, for initiating Corporate Insolvency Process against the Corporate Debtor due to non-payment of a debt amounting to Rs. 1,22,88,481. An Interim Resolution Professional was appointed, and a moratorium period was imposed on the Corporate Debtor. The judgment was communicated to the parties involved, with instructions for compliance and reporting to relevant authorities.

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Issues:
1. Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency Process (CIRP) against a Corporate Debtor.

Analysis:
The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Process against the Corporate Debtor, based on non-payment of outstanding debt amounting to Rs. 1,22,88,481/-. The Applicant, a construction firm, had undertaken work for the Corporate Debtor as per a work order dated 10.10.2020, and subsequently raised an invoice for the same. Despite reminders and a statutory demand notice, the debt remained unpaid, leading to the application being filed within the limitation period.

Analysis:
The Corporate Debtor, engaged in building construction, had changed its name multiple times, with the latest being Omshri Devprocon Limited. The Applicant provided evidence of the debt owed, including invoices, emails, and certificates of incorporation. The Corporate Debtor acknowledged the debt but cited financial constraints for the delay in payment. The Tribunal found the debt to be due and payable, with the default occurring on 13.05.2021, well within the limitation period.

Analysis:
The Tribunal had jurisdiction to entertain the application as the registered office of the Corporate Debtor was in Ahmedabad, Gujarat. The Applicant complied with the necessary requirements under the Insolvency and Bankruptcy Code, including submitting an affidavit confirming no dispute regarding the unpaid operational debt. The Tribunal, after considering all submissions and documents, admitted the application under Section 9(5) of the IBC, 2016.

Analysis:
Regarding the appointment of an Interim Resolution Professional (IRP), the Applicant proposed the name of Mr. Arpan Maheshkumar Shah, who was appointed as the IRP for the Corporate Debtor. The Tribunal directed the Operational Creditor to deposit a sum of Rs. 2.00 lakhs with the IRP to meet necessary expenses. The moratorium period under Section 14(1) of the Code was imposed on the Corporate Debtor, prohibiting certain actions during this period.

Analysis:
The Tribunal ordered the communication of the judgment to the Applicant, Corporate Debtor, and IRP, with additional copies forwarded to the Insolvency and Bankruptcy Board of India (IBBI) for record-keeping. The Applicant was instructed to provide a complete paper book to the IRP and update the Master Data with the Registrar of Companies (ROC). Compliance reports were to be sent to the Registrar, NCLT, ensuring procedural adherence.

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