2018 (6) TMI 1194 - Tri - Insolvency and Bankruptcy

Corporate insolvency process - proof of default - Held that - Since the Corporate Debtor despite repeated service has not appeared before this Tribunal and a default of debt due to the Operational Creditor is also in existence remaining unsatisfied as evident prima facie, this Tribunal is of the considered view that this petition requires to be admitted and that CIRP process is required to be initiated against the Corporate Debtor. Application/Petition stands admitted in terms of Section 9(5) of IBC, 2016 and the moratorium shall come in to effect as of this date. A copy of the order shall be communicated to the Operational Creditor as well as to the Corporate Debtor above named by the Registry.

Issues:
- Application filed under Section 9 of Insolvency and Bankruptcy Code, 2016 by Operational Creditor against Corporate Debtor for outstanding payments.
- Acknowledgment of due payments by Corporate Debtor, followed by returned cheques due to insufficient funds.
- Issuance of statutory demand notice by Operational Creditor for the pending amount.
- Lack of response from Corporate Debtor leading to the initiation of Corporate Insolvency Resolution Process (CIRP).
- Tribunal's decision to admit the petition and initiate CIRP against the Corporate Debtor.
- Appointment of interim resolution professional and imposition of moratorium under Section 14(1) of IBC, 2016.

Analysis:
1. The petition was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by the Operational Creditor against the Corporate Debtor, citing outstanding payments amounting to ?1,55,69,203. The Operational Creditor provided details of the agreements and invoices for services rendered to the Corporate Debtor, leading to the debt claim.

2. The Corporate Debtor acknowledged a portion of the due payments but issued cheques that were returned unpaid due to insufficient funds. Subsequently, a statutory demand notice was issued by the Operational Creditor in June 2017, demanding the outstanding amount from the Corporate Debtor.

3. Despite receiving the statutory demand notice and multiple attempts at communication, the Corporate Debtor failed to respond by either making the payment or disputing the debt claimed. This lack of response prompted the Operational Creditor to file the application for initiation of CIRP under Section 9 of IBC, 2016.

4. The Tribunal noted the repeated non-appearance of the Corporate Debtor despite being served notices and the existence of an unsatisfied debt. Consequently, the Tribunal decided to admit the petition and initiate the CIRP against the Corporate Debtor based on the evidence presented by the Operational Creditor.

5. Following the admission of the petition, the Operational Creditor proposed an interim resolution professional for the case. The Tribunal approved the appointment and imposed a moratorium under Section 14(1) of the IBC, 2016, restricting certain actions against the Corporate Debtor during the insolvency resolution process.

6. Additionally, the Tribunal directed the Operational Creditor to pay a specified sum to the appointed interim resolution professional to cover necessary expenses, as per the regulations outlined in the Insolvency and Bankruptcy Board of India guidelines.

This detailed analysis encompasses the key legal aspects and procedural steps taken in the judgment delivered by the National Company Law Tribunal, New Delhi.

← Previous Next →