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Judgment
Per: R. VARADHARAJAN, MEMBER (JUDICIAL)
Under Adjudication is an Application that has been filed by M/s. Surya Pelle Chemical & Mould (P) Ltd. (hereinafter referred to as 'Operational Creditor') under Section 9 of the Insolvency & Bankruptcy Code 2016 (in short, 'I&B Code, 2016') r/w Rule 6 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 against M/s. Taurus Hides Private Limited, (hereinafter referred to as 'Corporate Debtor'). The prayer made is to admit the Application, to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor, declare moratorium and appoint Interim Resolution Professional.
Part-I of the Application sets out about the Operational Creditor from which, it is evident that the Operational Creditor is a Private Limited Company with CIN: U19202TN2005PTC055574. Part-II of the Application gives all the particulars of the Corporate Debtor from which it is evident that the Corporate Debtor is a Private Limited Company with CIN:U19115TN2009PTC073595 which was incorporated on 19.11.2009 and that its Nominal Share capital and paid up capital is ₹1,60,00,000 and ₹1,60,00,000 respectively. The Registered Office of the Corporate Debtor as per the Application is stated to be situated at No.808/4B, Old Thiruthani Road, Vannivedu Village, Walajapet, Vellore, Tamilnadu – 632 513. Part-III of the Application shows that the Operational Creditor has not proposed any “Interim Resolution Professional” (IRP) and left it to the discretion of this Tribunal to appoint the IRP.
From Part-IV of the Application, it is seen that a sum of Rs.15,54,327/- together with interest at 24% p.a. thereon from the due date till the date of payment is being claimed by the Operational Creditor as Operational Debt. The details of transactions is stated to be on account of supply of chemicals to the Corporate Debtor from 12.12.2017 to 20.04.2018.
The Operational Creditor has issued Demand Notice as mandated under Sec. 8 of the I&B Code, 2016 to the Corporate Debtor on 20.04.2018, demanding the Corporate Debtor to repay a sum of ₹16,87,190/- with interest at the rate of 24% p.a. within 10 days from the receipt of the notice, to which the Corporate Debtor has sent a reply through its counsel on 14.06.2018 and on 15.06.2018 by itself the Corporate Debtor had chose to admit its liability and has stated that there is no dispute with regard to the outstanding amount which is due to the Operational Creditor. The Corporate Debtor due to financial constraints has pleaded for six months time to settle the dues of the Operational Creditor.
A perusal of the record of proceedings also posits the fact that the Respondent was set ex-parte on 29.01.2019 and when the matter was taken up for final hearing, the Corporate Debtor represented that the matter may be decided on merits from the documents available on record.
The Learned Counsel for the Operational Creditor submitted that the Corporate Debtor had no-where in its reply to the Demand Notice has denied its liability to pay the dues to the Corporate Debtor but on the contrary has only pleaded to grant more time to settle the dues. It was also submitted that sufficient opportunities were granted to the Corporate Debtor to settle the dues to the Operational Creditor, however no monies were forthcoming from the Corporate Debtor and hence prayed for the initiation of the CIRP against the Corporate Debtor.
The Operational Creditor has filed Affidavit by complying with Section 9 (3) (b) of the I&B Code, 2016, along with the typed set of document wherein under Para 3, it has been deposed that the Operational Creditor has failed to bring to notice an existence of a dispute or pendency of a suit or arbitration before the service of the demand notice.
From the list of documents annexed, it is evident that the claim as claimed by the Operational Creditor is within the prescribed period of limitation of 3 years. The claim amount as made in the petition is also in excess of Rs.1,00,000/- being the statutory minimum amount fixed under Section 4 of the IBC, 2016 for approaching this Tribunal by the creditors, in the instant case by Operational Creditor and further in relation to the Corporate Debtor the registered office of which is situated within the State of Tamilnadu, amenable to its territorial jurisdiction, this Authority has no hesitation in admitting this Petition and initiating the Corporate Insolvency Resolution Process (CIRP) as against the Corporate Debtor.
Thus taking into consideration the facts and circumstances of the case as well as the position of Law, we are of the view that the Petition as filed by the Operational Creditor is required to be admitted under Section 9(5) of the IBC, 2016. Since the Operational Creditor has not named the Insolvency Resolution Professional, this Tribunal based on the latest list furnished by Insolvency and Bankruptcy Board of India appoints Mr. M. Raguram (IBBI/IPA-003/IP-N00072/2017-18/10582) (email id:- [email protected]) as the “Interim Resolution Professional” subject to the condition that no disciplinary proceedings are pending against such an Interim Resolution Professional named and disclosures as required under IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 are made within a period of one week from the date of this order. As a consequence of the Application being admitted in terms of Section 9 (5) of the Code, the moratorium as envisaged under the provisions of Section 14(1) and as extracted hereunder shall follow in relation to the Corporate Debtor:
a. The institution of suits or continuation of pending suits or proceedings against the respondent including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;
b. Transferring, encumbering, alienating or disposing of by the respondent any of its assets or any legal right or beneficial interest therein;
c. Any action to foreclose, recover or enforce any security interest created by the respondent in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;
d. The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the respondent.
However, during the pendency of the moratorium period in terms of Section 14(2) (2A) and 14(3) as extracted hereunder:
(2)The supply of essential goods or services to the Corporate Debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period.
(2A) Where the interim resolution professional or resolution professional, as the case may be, considers the supply of goods or services critical to protect and preserve the value of the Corporate Debtor and manage the operations of such Corporate Debtor as a going concern, then the supply of such goods or services shall not be terminated, suspended or interrupted during the period of moratorium, except where such Corporate Debtor has not paid dues arising from such supply during the moratorium period or in such circumstances as may be specified.
(3)The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.
The duration of the period of moratorium shall be as provided in Section 14(4) of the Code and for ready reference reproduced as follows:
(4)The order of moratorium shall have effect from the date of such order till the completion of the Corporate Insolvency Resolution Process: Provided that where at any time during the Corporate Insolvency Resolution Process period, if the Adjudicating Authority approves the Resolution Plan under sub-Section (1) of Section 31 or passes an order for liquidation of Corporate Debtor under Section 33, the moratorium shall cease to have effect from the date of such approval or Liquidation Order, as the case may be.
The Operational Creditor is directed to pay a sum of ₹2,00,000/- (Rupees Two Lakhs Only) to the Interim Resolution Professional upon the Interim Resolution Professional filing the necessary declaration form as required under the provisions of the Code to meet out the expenses to perform the functions assigned to her in accordance to Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
Based on the above terms, the Application 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. In addition, a copy of the Order shall also be forwarded to IBBI for its records. Further, the Interim Resolution Professional above named who is figuring in the list of Resolution Professionals forwarded by IBBI be also furnished with copy of this Order forthwith by the Registry.