Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + AT Insolvency and Bankruptcy - 2022 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (10) TMI 812 - AT - Insolvency and BankruptcyMaintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT - The fact remains that the Appellant filed an application before the Adjudicating Authority under Section 9 of the I B Code, 2016 initiation of CIRP against the Respondent / Corporate Debtor for the reason that the Corporate Debtor failed to pay the Operational Debt owed to it. The Appellant prior to filing of the Application before the Adjudicating Authority issued demand notice in Form-3 wherein the Appellant claimed a total amount of Rs.32,76,848/- including the interest. The basis for the claim is an agreement dated 01.07.2015 entered between the Appellant and the Respondent for supply of footwear under the brand name of SLAZENGER. The Appellant raised invoices on the Corporate Debtor for supply of goods. The Appellant vide its reply dated 18.04.2017 to the legal notice of the Respondents dated 23.03.2017 admitted the fact that there are some disputes between the group company under which the appellant obtained licence for supply of SLAZENGER. Thus, it is an admitted fact that the Appellant does not hold the licence and entered the agreement subsequent to termination of licence / agreement dated 19.01.2015 - there are several correspondences namely the Appellant vide its letter dated 08.08.2017 suggested appointment of arbitrator, however the respondent vide its reply dated 31.08.2017 categorically stated that the void agreement is not enforceable, therefore, the appointment of arbitrator is uncalled for and the respondent is not consented for any requests referring any dispute to arbitrator. This Bench comes to a resultant conclusion that there is pre-existence of disputes between the parties prior to issuance of demand notice dated 08.08.2019 with regard to the very claim of the Appellant and the Adjudicating Authority or this Tribunal cannot go into the disputed issues in a summary jurisdiction. Viewed in that perspective, the order passed by the Adjudicating Authority in rejecting the application filed by the Appellant need no interference. Appeal dismissed.
Issues:
1. Dismissal of application under Section 9 of the Insolvency and Bankruptcy Code, 2016 by the Adjudicating Authority. 2. Existence of pre-existing dispute between the parties. 3. Validity of demand notice and arbitration proceedings. Analysis: Issue 1: The Appellant filed an appeal against the Adjudicating Authority's order dismissing the application under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Appellant claimed non-payment of operational debt by the Respondent. The Adjudicating Authority observed a pre-existing dispute between the parties before the demand notice was issued, leading to the dismissal of the application. Issue 2: The Respondent argued a pre-existing dispute with the Appellant since 2016, supported by legal notices and criminal complaints. The Respondent alleged fraud and misrepresentation by the Appellant regarding the supply agreement for SLAZENGER brand products. The Respondent's actions demonstrated a clear pre-existing dispute, as highlighted by legal notices and correspondence. Issue 3: The Appellant's submissions emphasized the Respondent's admission of liability via email before the demand notice. However, the Respondent contended that the Appellant concealed legal notices and relied on forged documents. The Respondent's refusal to consent to arbitration and the existence of a pre-existing dispute were crucial factors in the dismissal of the application. Conclusion: The Tribunal, following Supreme Court decisions, concluded that a pre-existing dispute existed between the parties before the demand notice was issued, rendering the application invalid. The Tribunal upheld the Adjudicating Authority's decision, dismissing the appeal. The judgment highlighted the importance of pre-existing disputes in insolvency proceedings, leading to the rejection of the application.
|