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Judgment
ORAL ORDER
The present petition has been preferred under Section 9(2) of IBC, 2016. The amount of debt and default has been mentioned in Part-IV of the petition which reads thus:-
The Applicant has also placed on record the Supply Agreement entered into between the Applicant and the Respondents as Annexure-1 to the petition. Purchase orders, e-mails and excel sheet relating to the purchase order are placed on record as Annexure-2 of the petition. The Applicant has also placed on record invoices raised by Operational Creditor upon the Corporate Debtor as Annexure-3. The demand notice under Section 8 of Insolvency and Bankruptcy Code, 2016 served upon the Corporate Debtor by the Operational Creditor is placed on record as Annexure-7. The Creditor has also filed an affidavit indicating therein that the Corporate Debtor did not raise any dispute regarding the amount of operational debt.
As can be seen from the provisions of Section 9(3) of the Code, this Tribunal need to satisfy itself regarding the invoice raised by the Operational Creditor, demand notice served upon the Respondent and the evidence that the amount of operational debt could not be paid by the Corporate Debtor to the Petitioner.
To satisfy the requirement of the provisions of Section 9(3)(c)&(e) as also Section 9(5)(i)(b) of the Code, Ld. Counsel for the Applicant could draw our attention to Para 10 of the affidavit filed under Section 9(3)(b) of the Code, wherein the Operational Creditor did not receive any response to the demand notice and the Corporate Debtor also failed to pay the due amount of Rs. 5,87,90,837/-. The Para 10 (ibid) of the affidavit reads thus:-
“10.That the Corporate Debtor received but did not respond to the said Demand Notice and also failed to pay the due amount of Rs. 5,87,90,837/- (Rupees Five Crore Eighty-Seven Lakh Ninety Thousand Eight Hundred Thirty Seven Only) alongwith interest @18% per annum from 03.01.2024 i.e. INR 52,91,175/- and thus the same gives rise to cause of action to the Operational Creditor as per Section 9(1) of the Code to file the instant Application. No dispute which has been raised or intimated by the Corporate Debtor as regards the said Outstanding Debt which is admittedly due and payable, since 03-01-2024 and there is default in payment of the same.”
Here it would not be out of context to make reference to order dated 19.11.2024, wherein the admission of the Corporate Debtor to the effect that it had liability to pay the defaulted amount and that it was inclined to enter into settlement in respect thereof as has been recorded. The order reads thus:-
“The present petition was preferred by Stove Kraft Ltd. (hereinafter referred to as “Applicant/ Operational Creditor”) to initiate CIRP against Pathways Retail Private Ltd. (hereinafter referred to as “Respondent/ Corporate Debtor”) under Section 9 of the Code. The particulars of debt are given in Part- IV of the application, which reads thus: -
2.The Applicant has enclosed with the application the demand notice dated 12.07.2024 sent to the Corporate Debtor in terms of Rule 5 of the Insolvency and Bankruptcy (Application to the Adjudicating Authority) Rules, 2016 as Annexure A-7(Colly.) of the application. Relevant excerpt of the demand notice read thus: -
3.Today, the Ld. Counsels for the parties appeared and submitted that the amount of default is being settled between the parties. From the stand taken by the Applicant and the Creditor, it appears that the settlement plan offered by the debtor is acceptable to the creditor. In the wake, the insolvency of the Corporate Debtor in respect of the amount defaulted to be paid, as referred to in IB-490/ND/2024 stands resolved.
4.In view of the stand made by them, the present application is disposed of. It is made clear that if such settlement is not materialised and implemented within 10 days, it would be open to the Applicant to mention before this Bench for revival of the petition. Let a copy of this order be sent to Registrar for maintaining record/data.”
From the aforementioned it is clear that there is sufficient material on record to arrive at a conclusion that the amount mentioned in the invoices raised by the Operational Creditor has not yet been paid by the Corporate Debtor to the Applicant. The Corporate Debtor has not raised any plea regarding completeness of the application.
As the requirement of Section 9(5)(i) of IBC, 2016 is satisfied, we are left with no option but to admit the application and make an order under Section 9(6) of the Code viz. for commencement of CIRP. Ordered accordingly. Resultantly, moratorium in terms of the provision of Section 13 for the purposes referred to in Section 14 of the IBC, 2016 is declared. As the Operational Creditor has not proposed name of any Insolvency Professional to be appointed as IRP, in terms of the provisions of Section 13(1)(c) read with Section 16(3)(a) of the IBC, 2016, the Insolvency Professional namely, Mr. Rajesh Kumar Parakh, having IBBI Registration No. IBBI/IPA-001/IP-P00272/2017-2018/10516, email id: [email protected] is appointed as IRP in the matter. The Court Officer/Registrar of this Tribunal/Adjudicating Authority is directed to inform the IRP about confirmation of his appointment forthwith. The term of the Interim Resolution Professional shall continue till the date of appointment of the Resolution Professional under Section 22 of the IBC, 2016 or the development if any under Section 12A of the Code or otherwise, whichever is earlier. The IRP is directed to act in terms of the provisions 13(1)(b) and Section 13(2) read with Section 15 of the IBC, 2016 immediately. In other words, the IRP shall cause a public announcement of initiation of Corporate Insolvency Process be made qua the Corporate Debtor and call for submission of claim under Section 15 immediately. The public announcement shall contain the information stipulated in Section 15(1) of the IBC, 2016. We are sanguine that the IRP shall act in due deference to the provisions of IBC, 2016, particularly Section 12,15,17,18,20 & 21 thereof as also Regulation 6, 6A, 12A, 13, 14, 16A and 17 of the IBBI (Insolvency Resolution Process for Corporate Person) Regulations, 2016 inter alia. It goes without saying that in the wake of the moratorium, there shall be prohibition of all the following: -
The institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgement, decree or order in any court of law, tribunal, arbitration panel or other authority;
Transferring, encumbering, alienating or disposing off 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
The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.
Nevertheless, it is made clear that a license, permit, registration, quota, concession, clearance or similar grant or right (if any) given by the Central Government, State Government, Local Authority, Sectoral Regulator or any Authority constituted under any other law for the time being in force shall not be suspended or terminated qua the Corporate Debtor on the ground of Insolvency, subject to the conditions that there is no default in payment of current dues arising for the use of continuation of the license, permit, registration, quota, concession, clearance or similar grant or right during the moratorium period. Besides, the supply of essential goods or services to the Corporate Debtor shall not be terminated or suspended or interrupted during the moratorium period, except where the Corporate Debtor does not pay the dues arising from such supply during the moratorium period or any other explainable situation.
The Operational Creditor shall deposit an amount of Rs. 2,00,000/- with the IRP to enable him to meet the expenses to be incurred at the initial stage of the CIRP. The expenses shall be reimbursed by the Committee of Creditors, to the extent the same are ratified by it. The amount of expenses ratified by the Committee of Creditors shall be treated as CIRP cost. It goes without saying that in terms of Regulation 34 of IBBI (Insolvency Resolution Process for Corporate Person) Regulations, 2016, the CoC shall fix the expenses to be incurred by the IRP/ RP and the expenses shall constitute IRP cost.
A copy of this Order shall be communicated to the Operational Creditor, the Corporate Debtor and the IRP mentioned above by the Court Officer/Registry of this Adjudicating Authority. In addition, a copy of the Order shall also be forwarded by the Court Officer/Registry to the IBBI for their records.