Abni Ranjan Kumar Sinha, J
1. The present application is filed under Section 9 of the Insolvency and Bankruptcy Code, praying therein to initiate the CIRP against the corporate-
debtor. The facts mentioned in short:
2. Operational-creditor is a company incorporated under provisions of companies Act, 1956 having CIR U28113MP2000PTC014412 and its registered
office at 200-A&B, Sector F Sanwer Road Indust. Es. Diss. Indore (M.P.) - 452010.
3. Operational-creditor engaged in the business of manufacturing of structural metal products, tanks reservoirs and steam generators.
4. Corporate-debtor place various purchased orders on the operational-creditor to supply of pulleys etc. from time to time.
5. Operational-creditor supplied the goods ordered by the corporate-debtor, which were duly received, acknowledged by the corporate debtor
company.
6. Demand notice with invoices in Form-3 was sent through Speed Post dated 24.12.2018, but no payment was made nor any dispute raised by the
corporate-debtor.
7. We have heard the learned counsel appearing on behalf of the applicant. Learned counsel appearing on behalf of the respondent has submitted that
he has got no instructions and he is withdrawing his ""vakalatnama"".
8. In the light of the submissions, we have gone the through the records and from the perusal of the records, we find that several opportunities was
earlier given to the respondents, but no reply is filed on behalf of the respondent and vide order dated 10th January, 2019 right to file reply on behalf of
the respondent was closed and again the case was adjourned on 13.02.2020, and then on today, so, considering these facts, we do not think, it proper
to adjourn the case because the present case is filed on 23.07.2019.
9. The learned counsel appearing on behalf of the applicant has submitted that in response to the invoices raised by the applicant, which the applicant
has enclosed from page 13 to 22 of the petition, the applicant claim outstanding dues of Rs. 11,51,382/- including interest. He further submitted,
thereafter, he delivered the demand notice as required under Section 8(1) of the Insolvency and Bankruptcy Code, 2019 and same was duly delivered,
which would be evident with the Tracking report available as page No. 29 of the application. He further submitted that when no reply to the demand
notice was received by the applicant then present application is filed.
10. In the light of the submissions raised on behalf of the petitioner, we have gone through the averments made in the application as well as documents
enclosed with the application and we find that demand notice was duly delivered upon the respondent on 04.01.2019 at page No. 29, but no reply was
sent by the respondent and in this regard, the applicant has filed an affidavit under Section 9 (3) (b) of the Code and in para 2 of the affidavit, he
mentioned this fact that there is no dispute whatsoever raised within the prescribed period of ten days from the date of receipt of the said notice.
11. We further find that the applicant has also proposed the name of the IRP Mr. Rajiv Saxena.
12. At this juncture, we would like to refer Section 8 and 9 of the Insolvency and Bankruptcy Code, 2016 and same are quoted below.
Section: 8. Insolvency resolution by operational creditor
An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an invoice demanding
payment of the amount involved in the default to the corporate debtor in such form and manner as may be prescribed.
(2) The corporate debtor shall, within a period of ten days of the receipt of the demand notice or copy of the invoice mentioned in sub-section (1) bring
to the notice of the operational creditor -
(a) Existence of a dispute, 1[if any, or] record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in
relation to such dispute;
(b) The 2 [payment] of unpaid operational debt-
(i) By sending an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the corporate debtor; or
(ii) By sending an attested copy of record that the operational creditor has encashed a cheque issued by the corporate debtor.
Explanation. -For the purposes of this section, a ""demand notice"" means a notice served by an operational creditor to the corporate debtor demanding
3[payment] operational debt in respect of which the default has occurred.
Section 9: Application for initiation of corporate insolvency resolution process by operational creditor. -
(1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8,
if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub-section (2) of section 8, the
operational creditor may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process.
(2) The application under sub-section (1) shall be filed in such form and manner and accompanied with such fee as may be prescribed.
(3) The operational creditor shall, along with the application furnish-
(a) A copy of the invoice demanding payment or demand notice delivered by the operational creditor to the corporate debtor;
(b) An affidavit to the effect that there is no notice given by the corporate debtor relating to a dispute of the unpaid operational debt;
(c) a copy of the certificate from the financial institutions maintaining accounts of the operational creditor confirming that there is no payment of an
unpaid operational debt 1[by the corporate debtor, if available;]
2[(d) a copy of any record with information utility confirming that there is no payment of an unpaid operational debt by the corporate debtor, if
available; and
(e) Any other proof confirming that there is no payment of any unpaid operational debt by the corporate debtor or such other information, as may be
prescribed.)
(4) An operational creditor initiating a corporate insolvency resolution process under this section may propose a resolution professional to act as an
interim resolution professional.
(5) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order-
(i) Admit the application and communicate such decision to the operational creditor and the corporate debtor if -
(a) The application made under sub-section (2) is complete;
(b) There is no 3[payment] of the unpaid operational debt;
(c) The invoice or notice for payment to the corporate debtor has been delivered by the operational creditor;
(d) No notice of dispute has been received by the operational creditor or there is no record of dispute in the information utility; and
(e) There is no disciplinary proceeding pending against any resolution professional proposed under sub-section (4), if any.
(ii) Reject the application and communicate such decision to the operational creditor and the corporate debtor, if -
(a) The application made under sub-section (2) is incomplete;
(b) There has been 1[payment] of the unpaid operational debt;
(c) The creditor has not delivered the invoice or notice for payment to the corporate debtor;
(d) Notice of dispute has been received by the operational creditor or
There is a record of dispute in the information utility; or
(e) Any disciplinary proceeding is pending against any proposed resolution professional:
Provided that Adjudicating Authority, shall before rejecting an application under sub-clause (a) of clause (ii) give a notice to the applicant to rectify the
defect in his application within seven days of the date of receipt of such notice from the Adjudicating Authority.
(6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of this section.
13. From the perusal of the aforesaid provisions, we find that corporate-debtor after the receipt of the demand notice is required to raise the dispute
within ten days from the receipt of demand notice or show the documents that the payment of the unpaid operational-debt has already been made.
And if the corporate-debtor fails to raise the 'existence of disputes"" and documents showing the payment of operational-debt then the operational-
creditor has right to file an application under Section 9 of the Insolvency and Bankruptcy, Code, 2016.
14. In the light of the aforesaid provisions, when we shall consider the case in hand then we find that in this case no reply to the demand notice was
sent by the corporate-debtor. Therefore, we are of the considered view that corporate-debtor has failed to raise any 'existence of disputes' and show
that the operational-debt raised by the operational-creditor has already been paid. So under such circumstances, we have no option, but to pass the
order under Section 9(5) (i) if the application is complete and from the perusal of the application, we find that the application is complete and there is
no payment of unpaid operational-debt and no notice of dispute has been raised by the operational-creditor or there is no record of dispute in the
information utility and the operational-creditor has also proposed the name of the IRP against whom there is no disciplinary proceedings pending and
the defaulted amount is more than one lac. So, considering these facts, we have no option to admit the application. Accordingly, we hereby admit the
application and initiate the CIRP against the corporate-debtor.
15. A moratorium in terms of Section 14 of the Code is imposed forthwith in following terms:
(a) 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;
(b) Transferring, encumbering, alienating or disposing of by the corporate debtor 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 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;
(d) The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.
(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.
(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.
(4) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process.
16. The interim resolution professional (""IRP"") proposed by the Applicant is Mr. Rajiv Saxena (Email - rsaxenaca@rediffmail.com) and is being
confirmed by this Bench. He shall take such other and further steps as are required under the statute, more specifically in terms of Section 15, 17 and
18 of the Code and file his report within 30 days before this Bench.
17. Operational Creditor is directed to deposit the fee of Rs. 2,00,000/- to meet the immediate expenses of the IRP within two weeks. The same shall
be fully accountable by the IRP and shall be reimbursed by the CoC, to the Operational Creditor to be recovered as CIR costs.
18. Registry is directed to communicate the order with the IRP as well both the parties.
