Per: Reeta Kohli, Member (Judicial)

1. This Company Petition is filed by Mahavir Enterprise (hereinafter referred as “the Petitioner/Operational Creditor”) seeking to initiate Corporate Insolvency Resolution Process (hereinafter referred as “CIRP”) against Aakar Sales Agency Private Limited (hereinafter called “Corporate Debtor”) by invoking the provisions of Section 9 of the Insolvency and Bankruptcy code, 2016 (hereinafter called “Code”) read with Rule 6 of Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016, for an Operational Debt of Rs. 1,74,17,057/-.

Brief Facts:-

2. The Petition reveals that the Operational Creditor had provided C.R. Coils in various size and quantity to the Corporate Debtor and had issued ten invoices against the Corporate Debtor for the supply of goods amounting to Rs. 1,74,17,057/-.

3. It is submitted that the Corporate Debtor had acknowledge the outstanding amount vide its statement of confirmation of accounts dated 01.04.2019, 01.04.2020 and 01.04.2021.

4. Thereafter, the Operational Creditor issued various reminder letters to the Corporate Debtor dated 22.02.2018, 26.09.2019, 25.08.2020, 10.03.2021 and 03.01.2022 for clearing the outstanding amount. However, the Corporate Debtor failed to make the payment.

5. In pursuance of the above, the Operational Creditor issued a Demand Notice dated 09.09.2022 under Section 8 in Form 3, under Rule 5, of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 of the Insolvency and Bankruptcy Code, 2016. However, the Corporate Debtor has failed to make any payment and no reply was received from the Corporate Debtor. Hence this petition.

Submission by the Corporate Debtor:

6. The Corporate Debtor in its reply submits that the Corporate Debtor’s business is suffering losses and financial distress from last four years.

7. The Corporate Debtor further admits that the total outstanding amount of Rs. 1,74,17,057/- is due and payable.

8. It is submitted that the Corporate Debtor vide its letter dated 19.12.2020 had informed the Operational Creditor that due to the outbreak of COVID-19 Pandemic the business has hampered, and the Corporate Debtor is in severe financial crisis and requested some time to make the payment of the outstanding amount.

9. However, even after making several efforts the Corporate Debtor has defaulted in making the payment. Hence, it would be in the interest of the creditors of the Corporate Debtor that the Corporate Debtor undergoes into Corporate Insolvency Resolution Process.

Findings

10. Upon perusal of the Petition and after hearing both the parties, it is established that the Petitioner had supplied goods to the Corporate Debtor and had issued ten invoices dated 23.02.2017 against the Corporate Debtor amounting to Rs. 1,74,17,057/-.

11. In view of the above, the Operational Creditor had issued various letters to the Corporate Debtor dated 22.02.2018, 26.09.2019, 25.08.2020, 10.03.2021 and 03.01.2022 for clearing the outstanding amount. However, the Corporate Debtor failed to make the payment.

12. Further, the Corporate Debtor vide its statement of confirmation of accounts dated 01.04.2019, 01.04.2020 and 01.04.2021 annexed to the present Petition as “Annexure C, “Annexure E” and “Annexure I” had acknowledged its outstanding amount against the Petitioner. The Corporate Debtor had further, vide its reply letter dated 19.12.2020 to the reminder letter of the Operational Creditor dated 22.02.2018, 26.09.2019 and 25.08.2020 had accepted that they owe an amount of Rs. 1,74,17,057/- to the Petitioner. Hence, the Petition is well within limitation.

13. The Petitioner has served a demand notice on 09.09.2022, in Form 3 under Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, on the Corporate Debtor but the latter failed to respond to the said demand notice.

14. The Corporate Debtor has filed its affidavit of reply dated 22.02.2023, wherein the Corporate Debtor has accepted that he is in a financial crunch and was unable to pay the outstanding amount of Rs. 1,74,17,057/- which is due & payable to the Operational Creditor.

15. Therefore, the Petitioner has successfully demonstrated the existence of “debt” and “default” committed by the Corporate Debtor and the Company Petition satisfies all legal requirements for admission. Considering the above facts, we are of the view that this Petition deserves to be admitted. It is ordered accordingly in following terms:

ORDER

a. The above Company Petition No. 1189/IBC/MB/2022 is hereby allowed and initiation of Corporate Insolvency Resolution Process (CIRP) is ordered Aakar Sales Agency Private Limited.

b. Mr. Pawan Madhav Shetty, having registration No. IBBI/IPA001/IP-P-02606/2021-2022/14001, having email Idcapawanshetty7@gmail.com, having Mobile Number: 9890921077, is hereby appointed as Interim Resolution Professional to conduct the Insolvency Resolution Process as mentioned under the Insolvency & Bankruptcy Code, 2016.

c. The Operational Creditor shall deposit an amount of Rs. 2 Lakhs towards the initial CIRP costs by way of a Demand Draft drawn in favour of the Interim Resolution Professional appointed herein, immediately upon communication of this Order.

d. That this Bench hereby prohibits 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; the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Corporate Debtor.

e. 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.

f. 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.

g. That the order of moratorium shall have effect from the date of pronouncement 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.

h. That the public announcement of the corporate insolvency resolution process shall be made immediately as specified under section 13 of the Code.

i. During the CIRP period, the management of the corporate debtor will vest in the IRP/RP. The suspended directors and employees of the corporate debtor shall provide all documents in their possession and furnish every information in their knowledge to the IRP/RP

j. Registry shall send a copy of this order to the Registrar of Companies, Mumbai, for updating the Master Data of the Corporate Debtor.

k. Accordingly, CP 1189 of 2023 is admitted.