Tribunal Confirms Service & Allows Petition for Corporate Insolvency Resolution Process

The tribunal confirmed proper service of the demand notice, found no dispute regarding the operational debt, accepted the application filed within the limitation period, verified the completeness of the application, admitted the Corporate Insolvency Resolution Process (CIRP) due to undisputed liability, appointed a new Interim Resolution Professional (IRP), and directed a moratorium under Section 14(1) of the Code. The tribunal allowed and admitted the petition for CIRP, directed the petitioner to deposit Rs. 50,000 with the IRP for immediate CIRP expenses, and communicated the order to both parties and the IRP.

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Issues Involved:
1. Proper service of the demand notice.
2. Dispute regarding the operational debt.
3. Filing of the application within the limitation period.
4. Completeness of the application.
5. Admission of the Corporate Insolvency Resolution Process (CIRP).
6. Appointment of Interim Resolution Professional (IRP).
7. Directions for moratorium.

Detailed Analysis:

1. Proper Service of the Demand Notice:
The first issue considered was whether the demand notice dated 16.06.2019 was properly served. The tribunal confirmed that the demand notice sent to the registered address of the corporate debtor was delivered, as evidenced by the tracking report annexed with the petition.

2. Dispute Regarding the Operational Debt:
The tribunal examined whether the operational debt was disputed by the corporate debtor. The operational creditor filed an affidavit under Section 9(3)(b) of the Insolvency and Bankruptcy Code, 2016, stating that no dispute was communicated by the corporate debtor regarding the unpaid debt, nor was any payment received. Additionally, no reply to the demand notice was received within the stipulated 10 days, and there was no preexisting dispute between the parties concerning the unpaid operational debt.

3. Filing of the Application Within the Limitation Period:
The tribunal assessed whether the application was filed within the limitation period. The application was filed on 16.08.2019, whereas the date of default was 09.12.2018, which is within the limitation period as per the agreed terms. Therefore, the tribunal found the application 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 to be complete. The operational creditor provided details of the debt due, including copies of the ledger account statement and invoices, establishing the debt and default, which exceeded the threshold limit of Rupees one lakh (pre-revised).

5. Admission of the Corporate Insolvency Resolution Process (CIRP):
The tribunal noted that the corporate debtor failed to make the payment of the claimed amount even after the demand notice. The conditions under Section 9 of the Code were satisfied, and the liability of the corporate debtor was undisputed and admitted. Consequently, the tribunal admitted the petition for initiating the CIRP against the corporate debtor.

6. Appointment of Interim Resolution Professional (IRP):
Initially, Mr. Vikas Garg was proposed as the IRP. However, due to disciplinary proceedings against him, the petitioner proposed a new IRP, Mr. Deepankur Sharma, whose credentials were verified and found satisfactory. The tribunal appointed Mr. Deepankur Sharma as the IRP with specific directions, including taking control and custody of the corporate debtor's assets and managing the affairs as per the Code's provisions.

7. Directions for Moratorium:
The tribunal directed a moratorium in terms of Section 14(1) of the Code, which included:
- Suspension of suits or proceedings against the corporate debtor.
- Prohibition on transferring or disposing of the corporate debtor's assets.
- Prohibition on actions to foreclose or enforce security interests.
- Prohibition on recovery of property occupied by the corporate debtor.

The moratorium would remain effective until the completion of the CIRP or until a resolution plan is approved or an order for liquidation is passed.

Conclusion:
The tribunal allowed and admitted the petition for CIRP, directed the petitioner to deposit Rs. 50,000 with the IRP for immediate CIRP expenses, and communicated the order to both parties and the IRP.

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