2022 (11) TMI 646 - Tri - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process initiated for M/s. AGM Auto Private Limited with moratorium period

The petition was admitted, and the Corporate Insolvency Resolution Process (CIRP) was initiated against the corporate debtor, M/s. AGM Auto Private ... Maintainability of petition - initiation of CIRP - Corporate debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - Time Limitation - threshold limit of debt involved - service of demand notice - whether the demand notice in Form 3 dated 01.02.2020 was properly served? - HELD THAT:- The petitioner has placed a copy of e-mail and registered post details which was delivered to the corporate debtor. Therefore, demand notice was duly served. Whether the operational debt was disputed by the corporate debtor? - HELD THAT:- The claim amount was not disputed. Rather, it is admitted that the amount was not paid due to financial crunch in the business. Whether this application is filed within limitation? - HELD THAT:- This application was filed on 06.10.2022 vide Diary No. 00724. Whereas the date of default is 30.01.2020, therefore, this Adjudicating Authority finds that this application has been filed within limitation. Threshold limit of debt - HELD THAT:- There is a total unpaid operational debt (in default) of Rs. 1,67,27,124/-. The operational creditor supplied goods to the corporate debtor and raised invoices attached as Annexure A-2. Accordingly, the petitioner proved the debt and the default, which is more than Rupees one lakh (prior to the amendment in threshold limit of one crore vide notification No. S.O.1205(E) dated 24.03.2020) by the respondent-corporate debtor. 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 deserves to be admitted. Petition admitted - moratorium declared. Issues Involved:1. Proper service of the demand notice.2. Dispute over the operational debt.3. Filing of the application within the limitation period.4. Compliance with Section 9 of the Insolvency and Bankruptcy Code, 2016.Issue-wise Detailed Analysis:1. Proper Service of the Demand Notice:The first issue for consideration was whether the demand notice in Form 3 dated 01.02.2020 was properly served. The petitioner provided evidence of the demand notice being sent via email and registered post, which was delivered to the corporate debtor. Therefore, the Tribunal found that the demand notice was duly served.2. Dispute Over the Operational Debt:The next issue was whether the operational debt was disputed by the corporate debtor. The Tribunal noted that the corporate debtor did not dispute the claim amount. Instead, it was admitted that the amount was not paid due to a financial crunch in the business. Thus, there was no pre-existing dispute regarding the operational debt.3. Filing of the Application Within the Limitation Period:The Tribunal then considered whether the application was filed within the limitation period. The application was filed on 06.10.2022, while the date of default was 30.01.2020. Therefore, the Tribunal found that the application was filed within the limitation period.4. Compliance with Section 9 of the Insolvency and Bankruptcy Code, 2016:The Tribunal examined the contents of the application filed in Form 5 and found it to be complete. The unpaid operational debt was Rs. 1,67,27,124/-, which was more than the threshold limit of Rupees one lakh (prior to the amendment in the threshold limit to one crore). The Tribunal noted that the corporate debtor failed to make payment of the amount due as mentioned in the statutory notice. Thus, the conditions under Section 9 of the Code were satisfied. The Tribunal admitted the petition for initiation of the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor and directed a moratorium as per Section 14 of the Code.Additional Directives:- The Tribunal appointed Mr. Anil Kumar Singhal as the Interim Resolution Professional (IRP) and directed him to take control and custody of the corporate debtor's assets.- The Tribunal directed the petitioner to deposit Rs. 60,000 with the IRP to meet immediate expenses of the CIRP.- The Tribunal ordered that the corporate debtor, its directors, and associated personnel must cooperate with the IRP in managing the affairs of the corporate debtor.- The IRP was instructed to make a public announcement of the initiation of the CIRP and to constitute a Committee of Creditors (CoC) after collation of all claims.- The IRP was also directed to send a regular progress report to the Tribunal every fortnight.Conclusion:The petition was admitted, and the CIRP was initiated against the corporate debtor, M/s. AGM Auto Private Limited, with a moratorium period taking effect immediately. The Tribunal ensured that all statutory requirements were met and provided clear directives for the continuation of the insolvency process.