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Judgment
Per: S. VIJAYARAGHAVAN, MEMBER (TECHNICAL)
It is an Insolvency and Bankruptcy Application filed u/s 9 of the Insolvency & Bankruptcy Code, 2016 (hereinafter called the "Code") by M/s. Master Consultancy Services (hereinafter called as "Operational Creditor") for initiation of Corporate Insolvency Resolution Process (hereinafter called as “CIRP”) against the M/s. A School India Private Limited (hereinafter called as “Corporate Debtor”) on the ground the Corporate Debtor defaulted in paying ₹11,91,600 for services rendered during the year 2015-2017 as on 27.03.2018.
On perusal of this application, it appears that this Corporate Debtor engaged the Operational Creditor for providing the account-related services to the institution(s) managed by the Corporate Debtor. As per the arrangement agreed between the parties, the Operational Creditor provided the account-related services for the period between April 2014 and December 2016 for which the Operational Creditor raised 12 Invoices from 31.03.2015 to 21.03.2017 on a per-quarter basis as on 27.03.2018 which as follows:
| SL No | Date | Invoice | Amount (₹) |
|---|---|---|---|
| 1 | 31.03.2005 | MCS/081/14-15 | 90,000 |
| 2 | 31.03.2015 | MCS/082/14-15 | 90,000 |
| 3 | 31.03.2015 | MCS/083/14-15 | 90,000 |
| 4 | 31.03.2015 | MCS/084/14-15 | 90,000 |
| 5 | 14.03.2016 | MCS/088/15-16 | 99,000 |
| 6 | 14.03.2016 | MCS/089/15-16 | 99,000 |
| 7 | 14.03.2016 | MCS/090/15-16 | 99,000 |
| 8 | 14.03.2016 | MCS/091/15-16 | 99,000 |
| 9 | 21.03.2017 | MCS/082/16-17 | 1,08,900 |
| 10 | 21.03.2017 | MCS/083/16-17 | 1,08,900 |
| 11 | 21.03.2017 | MCS/084/16-17 | 1,08,900 |
| 12 | 21.03.2017 | MCS/085/16-17 | 1,08,900 |
| TOTAL OUTSTANDING DEBT | 11,91,600 | ||
Since the Operational Creditor regularly followed up with the Corporate Debtor for payment, the Corporate Debtor issued a letter dated 09.02.2017 acknowledging the liability and assuring to release the payment shortly. When no payment came from the Corporate Debtor, finally, this Operational Creditor sent Demand Notice on 28.03.2018 demanding payment of total operational debt of ₹11,91,600 for the services rendered during the years 2015-2017. On 11.04.2018, the Corporate Debtor replied admitting the entire outstanding amount of ₹11,91,600 to the Operational Creditor, but sought six months' time to clear the outstanding dues. Despite receipt of Demand Notice and undertaking given to service the liability within six months, this Corporate Debtor failed to make any payment due as aforesaid.
On looking at the facts available, we are of the view that this Operational Creditor has proved existence of debt and default. Therefore, we hereby admit this application by appointing Mr. S R Krishnan as IRP, looking at the consent letter given by him. This Operational Creditor is further directed to pay remuneration of the IRP, public announcement expenses and other expenses, if any, until constitution of CoC. Accordingly, this IBA/842/2019 is hereby admitted with the following directions:
That Moratorium is hereby declared prohibiting all of the following actions, namely,
the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, Tribunal, Arbitration panel or other Authority;
Transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein;
any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act);
The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Corporate Debtor.
That the supply of essential goods or services to the corporate debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period.
That the provisions of sub-section (1) of Section 14 shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.
That the order of moratorium shall have effect from the date of this Order till the completion of the corporate insolvency resolution process or until this Bench approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of corporate debtor under section 33, as the case may be.
That the public announcement of the Corporate Insolvency Resolution Process shall be made immediately as specified under Section 13 of the Code.
That this Bench hereby appoints Mr. S R Krishnan as Interim Resolution Professional, having Registration Number [IBBI/IPA-001/IP-P00909/2017-18/11509], No-6, Khabag Castle, 3B, Circular Road, United India Colony, Kodambakkam, Chennai-600024, E-Mail: krishnansroman@gmail.com, Mobile No: 7338910353 with his consent to carry the functions as mentioned under The Insolvency & Bankruptcy Code.
The Registry is hereby directed to immediately communicate this order to the Operational Creditor, the Corporate Debtor and the Interim Resolution Professional by way of e-mail.