Admission of Insolvency Petition Against Corporate Debtor: Key Requirements Met

The National Company Law Tribunal, Chandigarh Bench, admitted the petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed by the Operational Creditor against the Corporate Debtor for defaulting on operational debts. The Adjudicating Authority found all requirements for admission of the petition were met, including evidence of default, validity of demand notice, and completeness of the application. An Interim Resolution Professional was appointed to manage the affairs of the Corporate Debtor during the Corporate Insolvency Resolution Process, with directions for moratorium and effective management outlined.

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Issues Involved:
1. Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP).
2. Territorial jurisdiction of the Adjudicating Authority.
3. Default in payment of operational debt by the Corporate Debtor.
4. Validity of demand notice.
5. Disputed operational debt.
6. Timeliness of the application.
7. Completeness of the application and proof of debt.
8. Satisfaction of conditions under Section 9 of the Code for admission of the petition.
9. Appointment of Interim Resolution Professional.
10. Directions for moratorium and management of affairs during CIRP.

Detailed Analysis:

1. Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC):
The petition was filed by the Operational Creditor under Section 9 of the IBC to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor for defaulting on operational debts.

2. Territorial Jurisdiction:
The Corporate Debtor was incorporated under the Companies Act, 1956, with its registered office falling within the territorial jurisdiction of the Adjudicating Authority, the National Company Law Tribunal, Chandigarh Bench.

3. Default in Payment of Operational Debt:
The Operational Creditor provided goods to the Corporate Debtor, who failed to clear the outstanding dues, leading to the default in payment. The petitioner submitted evidence of unpaid operational debt and default occurrence.

4. Validity of Demand Notice:
A demand notice in Form 3 was issued to the Corporate Debtor, and evidence of proper service and receipt of the notice was presented, indicating compliance with the procedural requirements.

5. Disputed Operational Debt:
Despite repeated service and setting the Corporate Debtor ex parte, no appearance was made to dispute the operational debt. Affidavit and certificate confirmed the debt was not cleared even after the demand notice, supporting the petition.

6. Timeliness of the Application:
The application was filed within the limitation period, considering the date of default and the filing date, meeting the requirement for timely submission.

7. Completeness of the Application and Proof of Debt:
The application filed by the petitioner was found to be complete, providing details of the unpaid operational debt, invoices, and supporting documents, satisfying the conditions for admission under Section 9 of the Code.

8. Satisfaction of Conditions under Section 9 for Admission:
The Adjudicating Authority found that all requirements for admission of the petition were met, with clear evidence of default in payment of operational debt, justifying the initiation of the CIRP against the Corporate Debtor.

9. Appointment of Interim Resolution Professional:
An Insolvency Resolution Professional was appointed to manage the affairs of the Corporate Debtor during the CIRP, with specific directions and responsibilities outlined for effective resolution process.

10. Directions for Moratorium and Management of Affairs:
Moratorium was imposed to protect the assets of the Corporate Debtor, and directions were given for the management of affairs, cooperation from all involved parties, constitution of a Committee of Creditors, and regular reporting to the Tribunal.

This detailed analysis covers the key issues addressed in the judgment, outlining the legal proceedings and decisions made by the National Company Law Tribunal, Chandigarh Bench.

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