Tribunal Initiates Corporate Insolvency Resolution Process under Section 9

The Tribunal admitted the Application under Section 9 of the Insolvency and Bankruptcy Code, 2016, initiating the Corporate Insolvency Resolution Process against the Corporate Debtor for non-payment of dues. An ex-parte order was issued due to the Corporate Debtor's non-appearance despite notices. The Tribunal clarified the threshold amount for initiating CIRP and appointed an Interim Resolution Professional to manage the Corporate Debtor. A moratorium was declared, and operational procedures were outlined for the resolution process. Compliance with the Code provisions was emphasized throughout the proceedings.

---

---

Issues:
Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor.

Analysis:
1. Debt and Default: The Applicant, an Operational Creditor, filed an Application under Section 9 of the Code seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor for non-payment of dues amounting to Rs. 97,65,235. The Applicant had a trade relationship with the Corporate Debtor for the supply of goods, and despite multiple demands for payment, the Corporate Debtor failed to settle the outstanding invoices, leading to the debt remaining undischarged.

2. Ex-Parte Order: The Corporate Debtor was set ex-parte due to its failure to appear before the Tribunal despite multiple notices and substituted service through publication. The Tribunal examined the documents on record, including invoices, demand notice, and a certificate from the bank confirming non-receipt of the due amount by the Applicant. The Tribunal found that the Applicant had fulfilled all requirements under the Code for initiating CIRP, establishing the debt owed by the Corporate Debtor and its default.

3. Threshold Amount Clarification: The Tribunal addressed the issue of the threshold amount for initiating CIRP, clarifying that the increase from Rs. 1 lakh to Rs. 1 crore would apply prospectively. As the debt in this case was due before the notification enhancing the threshold limit, the higher limit did not affect the present Application.

4. Admission of Petition: Considering the evidence presented by the Applicant, the Tribunal admitted the petition and ordered the commencement of the Corporate Insolvency Resolution Process, emphasizing completion within the timelines specified in the Code.

5. Appointment of Interim Resolution Professional (IRP): The Tribunal appointed an IRP from the panel of the Insolvency and Bankruptcy Board of India, directing the IRP to file consent and take charge of the Corporate Debtor's management immediately. The IRP was also tasked with making a public announcement and calling for claim submissions as per the Code.

6. Moratorium and Directions: A moratorium was declared from the date of the order until the completion of the CIRP, prohibiting various actions against the Corporate Debtor. Essential supplies were exempted from termination during the moratorium. The Applicant was directed to pay an advance fee to the IRP, and compliance with Code provisions was emphasized.

7. Operational Procedures: The IRP was instructed to comply with specific sections of the Code, and the directors and associated persons of the Corporate Debtor were required to cooperate with the IRP. The Registry was directed to communicate the order to relevant parties and authorities for necessary actions and updates.

In conclusion, the Tribunal admitted the Application, initiated the Corporate Insolvency Resolution Process, appointed an IRP, declared a moratorium, and issued various directions for the resolution of the debt owed by the Corporate Debtor.

---