Insolvency petition by operational creditor upheld where substituted service and tax records established debt, moratorium imposed.

Whether the insolvency petition by an operational creditor should be admitted despite contested service: the Tribunal found invoices, GST and TCS records constituted sufficient evidence of supply, debt and default and that substituted service by publication was valid after personal and postal attempts failed; outcome: admission of the petition and appointment of an Interim Resolution Professional were affirmed. Whether moratorium under insolvency law could be imposed pending resolution: since procedural prerequisites for admission were met and the corporate debtor largely abstained from contesting (including an unpursued set aside application), the moratorium was upheld.

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Issues: Whether the Tribunal (NCLT) was correct in admitting the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, appointing an Interim Resolution Professional and imposing moratorium under Section 14, having regard to the appellant's contention of non service of the statutory notice under Section 8 and the fact that the corporate debtor was proceeded against ex parte.

Analysis: The petition under Section 9 recorded invoices, GST returns and TCS returns evidencing supply and the existence of debt and default. Attempts at personal service and postal delivery were unsuccessful and substituted service by publication was directed and effected; the corporate debtor failed to file a reply to the statutory demand or to appear for multiple listings except for a single appearance which was not pursued. The record included tax and GST filings and TCS deposits linked to the corporate debtor, relied upon as proof of claim under Regulation 7 of the IBBI Regulations, 2016. The conduct of the corporate debtor included denial and later admission of receipt of the demand notice in an unpursued application to set aside the ex parte order, supporting the view that the debtor avoided contesting the petition. On the material before the Tribunal, the requirements for admission under Section 9 and appointment of an IRP, together with imposition of moratorium under Section 14, were satisfied.

Conclusion: The appeal is dismissed; the NCLT order admitting the Section 9 petition, appointing the Interim Resolution Professional and imposing moratorium is upheld in favour of the operational creditor.

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