Corporate Debt Recovery: Operational Creditor Wins Insolvency Petition After Undisputed 10-Day Notice Period Under IBC

NCLAT Mumbai admitted an operational creditor's insolvency petition against a corporate debtor for an unpaid debt of Rs.1,09,516/-. After the 10-day notice period expired without dispute, the Tribunal initiated Corporate Insolvency Resolution Process (CIRP), appointed an interim resolution professional, and declared a moratorium prohibiting legal actions against the debtor's assets.

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The National Company Law Tribunal, Mumbai, adjudicated a petition filed by the Petitioner, an "Operational Creditor," under the Insolvency and Bankruptcy Code, 2016, against M/s. Royal Twinkle Star Club Limited, the "Corporate Debtor." The Petitioner claimed a default on a debt of Rs.1,09,516/- related to a Holiday Plan Certificate, acknowledged by the Debtor on 01.04.2017. The Tribunal noted that the debt qualifies as "Operational Debt" under Sections 8 and 9 of the Code, with no "Notice of Dispute" raised by the Respondent.Upon expiry of the 10-day period without payment or dispute notice, the Tribunal initiated the Corporate Insolvency Resolution Process (CIRP) as per Section 9(1). The Petitioner proposed Mr. Devendra Padamchand Jain as the Insolvency Professional, who accepted the role with no pending disciplinary proceedings. Consequently, a "Moratorium" under Section 14 was declared effective from 02.05.2017, prohibiting legal actions and asset transfers, but not affecting essential services to the Debtor. The Petitioner is directed to make a public announcement of the CIRP initiation as per Section 13. The Interim Resolution Professional must report progress by 21st July 2017. The Petition was "Admitted" and disposed of accordingly.

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