2017 (8) TMI 1548 - Tri - Insolvency and Bankruptcy

Initiation of Corporate Insolvency Resolution Process - default in payment of dues on the part of Corporate Debtor - HELD THAT - This Adjudicating authority is satisfied that the petitioner has made out his case by establishing that this Corporate Debtor has defaulted the payment dues on various occasions to this petitioner/OC and there is no dispute between the parties. The instant petition is admitted - the Corporate Insolvency Resolution Process shall commence - moratorium declared.

Summary

Issues Involved:
Company Petition under sections 433(e) and (f), 434(i)(a) and 439(i)(b) of the Companies Act, 1956 transferred to the National Company Law Tribunal, Chennai for determination under the Insolvency and Bankruptcy Code 2016 (IB Code 2016).

Analysis:

1. Background Facts and Submission of Petitioner:
The Company Petition was filed by the Operational Creditor against the Corporate Debtor for non-payment of dues. The Operational Creditor supplied steel to the Corporate Debtor, who failed to make payments, resulting in dishonored cheques and outstanding liabilities. Despite multiple requests and statutory notices, the Corporate Debtor did not respond or settle the dues, leading the Operational Creditor to claim Operational Creditor status under the IB Code 2016. The total outstanding liability amounted to Rs. 5,32,36,147.90 as of June 2017.

2. Compliance with IB Code 2016:
The Petitioner fulfilled all requirements under the IB Code 2016 and the Ministry of Corporate Affairs Notification dated 29.06.2017. The Corporate Debtor neither replied to the statutory notice nor appeared before the tribunal, indicating non-compliance with payment obligations.

3. Adjudication and Order:
After considering submissions and records, the Adjudicating Authority found that the Corporate Debtor consistently defaulted on payments to the Operational Creditor without any dispute between the parties. Consequently, the petition was admitted, and the Corporate Insolvency Resolution Process was initiated, with a 180-day timeline for completion.

4. Appointment of Interim Resolution Professional (IRP):
Mr. V. Mahesh was appointed as the IRP, with no pending disciplinary proceedings against him. The IRP was directed to take immediate charge of the Corporate Debtor's management and initiate the resolution process, including public announcements and claim submissions.

5. Moratorium and Prohibitions:
A moratorium was declared from the date of the order until the completion of the resolution process, prohibiting legal actions against the Corporate Debtor, asset transfers, enforcement of security interests, and property recovery. Essential goods or services supply to the Corporate Debtor was to continue uninterrupted during this period.

6. Compliance and Assistance:
The IRP was mandated to comply with specific sections of the IB Code 2016, while directors, promoters, and management associates of the Corporate Debtor were directed to assist and cooperate with the IRP in fulfilling his duties under the Code.

7. Implementation and Communication:
The Registry was instructed to send copies of the order to the IRP, Operational Creditor, and Corporate Debtor for compliance. Additionally, the address details of the IRP were provided for communication purposes.

This detailed analysis covers the key aspects of the judgment, including the background, compliance, adjudication, appointments, moratorium, prohibitions, compliance requirements, and communication directives outlined in the Tribunal's decision.