INSOLVENCY AND BANKRUPTCY CODE, 2016

Section 9, Rule 6

Initiation of corporate insolvency resolution process by operational creditor - Non-payment of outstanding debt - Existence of debt and occurrence of default - Maintainability of insolvency petition

OC (petitioner) supplied LED TVs to CD (respondent) but, CD failed to make payment towards said supplies. OC issued a demand notice under section 8, however, CD did not reply to the same. CD did not raise any dispute with regard to the amount outstanding to OC at any point in time. Therefore, OC filed petition under section 9 to initiate CIRP against CD. Held: OC established that CD had committed debt and default in question. There was neither pre-existing nor post-existing dispute made out by CD. The petition was complete as per proviso 2 of section 9; there was no payment of operational debt; the demand notice in question was delivered to CD; no notice of dispute was received by OC and no disciplinary proceedings were pending against the proposed Interim Resolution Professional, hence, petition under section 9 was admitted.

Relied:Mobilox Innovation (P) Ltd. v. Kirusa Software (P) Ltd., (2018) 1 SCC 353, Greenhills Exports (Private) Limited, Mangalore & Ors. v. Coffee Board, Bangalore, 2001(4) KarlJ 158, Ramgad Minerals and Mining (P) Ltd. & Ors., v. Vectra Advanced Engineering (P) Ltd., MANU/KA/6261/2018 and Parmod Yadav & Ors., v. Divine Infracon (P) Ltd., MANU/NL/0136/2018

REFERRED : M/s. Next Education India (P) Ltd. v. M/s. K12 Techno Services (P) Ltd., (CP (1B)No. 114/BB/2017) : 2019 TaxPub(CL) 0301 (NCLAT-Bang), B.K. Educational Services (P) Ltd. v. Parag Gupta and Associates (2018) SCC Online SC 1921 : 2018 TaxPub(CL) 1117 (SC) and M/s. Pedersen Consultants India (P) Ltd. v. M/s. Nitesh Estates Limited [Company Petition (1B)No. 35/BB/2018, dt. 5-10-2018]

FAVOUR : In favour of petitioner

A.Y. :

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