2022 (9) TMI 322 - Tri - Insolvency and Bankruptcy

Petition Admitted for Corporate Insolvency Resolution Process with Moratorium & IRP Appointment

The tribunal found the petition complete and admitted it for initiating the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor. A ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - time limitation - service of demand notice - whether the demand notice in Form 3 dated 26.11.2019 was properly served? - HELD THAT:- The petitioner has placed copies of the registered postal receipts, and tracking reports which reflects that the same was delivered at the Chennai office of the corporate debtor. Whether the operational debt was disputed by the corporate debtor? - HELD THAT:- The petitioner/operational creditor has filed a separate affidavit wherein it has been deposed that the respondent/corporate debtor failed to bring to notice an existence of a dispute or a pendency of a suit or arbitration proceedings filed before the service of the demand notice. Further, it has been deposed that the petitioner/operational creditor did not receive any payment or notice of dispute regarding the pending amount from the respondent/corporate debtor. Thus, there is no pre-existing dispute between the parties - the respondent/corporate debtor has categorically admitted its liability and has not disputed any of the claim made by the petitioner/operational creditor. Rather the corporate debtor by admitting the default on its part has itself prayed that in the best interest of all stakeholders, CIRP proceedings be initiated against it. Whether this application was filed within limitation? - HELD THAT:- A perusal of the case file shows that this application was filed vide Diary No.7395 on 24.12.2019, whereas the date of default is 01.11.2017, therefore, this Adjudicating Authority finds that this application has been filed within limitation. The corporate debtor has failed to make payment of the amount due as mentioned in the statutory notice till date. Thus, the conditions under Section 9 of the Code stand satisfied. It is evident from the facts that the liability of the corporate debtor is undisputed. Accordingly, the petitioner proved the debt and the default which is above threshold limit. In the present petition, all the requirements have been satisfied. It is seen that the petition preferred by the petitioner is complete in all respects. The material on record clearly goes to show that the respondent committed default in payment of the claimed operational debt even after demand made by the petitioner. In view of the satisfaction of the conditions provided for in Section 9(5)(i) of the Code, the petition is admitted. Petition admitted - moratorium declared. Issues Involved:1. Proper service of demand notice.2. Existence of dispute regarding the operational debt.3. Timeliness of the application.4. Completeness of the application.5. Appointment of Interim Resolution Professional (IRP).6. Directions for moratorium and compliance.Issue-wise Detailed Analysis:1. Proper Service of Demand Notice:The first issue considered was whether the demand notice in Form 3 dated 26.11.2019 was properly served. The petitioner provided copies of registered postal receipts and tracking reports confirming that the notice was delivered at the Chennai office of the corporate debtor.2. Existence of Dispute Regarding the Operational Debt:The tribunal examined if the operational debt was disputed by the corporate debtor. The petitioner filed an affidavit asserting that the corporate debtor did not indicate any dispute or pending suit before the service of the demand notice. Furthermore, the corporate debtor admitted its liability and requested the initiation of CIRP in the best interest of all stakeholders, indicating no pre-existing dispute.3. Timeliness of the Application:The tribunal verified whether the application was filed within the limitation period. The application was filed on 24.12.2019, while the date of default was 01.11.2017. Thus, the application was deemed to be filed within the limitation period.4. Completeness of the Application:The tribunal reviewed the contents of the application filed in Form 5 and found it complete. The operational creditor claimed an unpaid operational debt of Rs.2,74,964/-, which was not disputed by the corporate debtor. The tribunal confirmed that the debt and default were proven, meeting the threshold limit of more than Rupees one lakh (prior to the amendment raising it to one crore).5. Appointment of Interim Resolution Professional (IRP):In Part-III of Form No. 5, no IRP was proposed by the petitioner. The tribunal appointed Mr. Krishan Vrind Jain as the IRP, whose credentials were verified and found satisfactory. Specific directions were given to the IRP regarding the suspension of the Board of Directors' powers, management of affairs, and compliance with the Code and relevant regulations.6. Directions for Moratorium and Compliance:The tribunal directed a moratorium under Section 14(1) of the Code, including:- Suspension of suits or proceedings against the corporate debtor.- Prohibition on transferring or disposing of assets.- Prevention of actions to foreclose or enforce security interests.- Continuation of essential goods or services supply to the corporate debtor.The moratorium would be effective from the date of the order until the completion of the CIRP or until a resolution plan is approved or liquidation is ordered.The IRP was instructed to make a public announcement, manage the corporate debtor's affairs, and file regular progress reports. The petitioner was directed to deposit Rs.30,000 with the IRP for immediate CIRP expenses, to be reimbursed by the Committee of Creditors.Conclusion:The tribunal found the petition complete and admitted it for initiating the CIRP against the corporate debtor. A moratorium was imposed, and an IRP was appointed with specific directions for compliance. The petition was allowed and admitted, with copies of the order to be communicated to both parties and the IRP.