2017 (9) TMI 1610 - Tri - Insolvency and Bankruptcy

Corporate insolvency procedure - whether this Application is maintainable before this Adjudicating Authority in view of the pendency of Company Petition against Respondent Company before the Honble High Court of Gujarat - Held that - Different Benches have taken different views on the aspect whether Applications under Section 7, 9 and 10 are maintainable or nor in the light of the pendency of winding up proceedings before various Hon ble High Courts. Therefore, the Special Bench of the NCLT, New Delhi referred the said point to a Larger Bench for decision. Therefore, this Adjudicating Authority is also of the considered view to refer this matter to a Larger Bench for consideration and decision, the Registry of this Bench is directed to send the entire file along with the copy of this order to the Registrar, National Company Law Tribunal, New Delhi, for placing the same before the Honourable President, National Company Law Tribunal, for referring the matter to the Larger Bench which has already been constituted.

Summary

Issues:
1. Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process.
2. Compliance with Section 8 of the Code for filing the application.
3. Dispute regarding the existence of the debt.
4. Maintainability of the application during the pendency of winding-up proceedings.

Analysis:
1. The Applicant, Aarti Industries Limited, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process against Khushbu Vinyl Private Limited as the Corporate Debtor. The application was filed after the transfer of a Company Petition from the High Court to the Tribunal, following the rules for transferring pending proceedings.

2. The Respondent raised objections, including issues related to the demand notice, compliance with Code provisions, and the validity of the claimed invoices. The Respondent disputed the existence of the debt and highlighted the pendency of winding-up proceedings before the High Court, questioning the maintainability of the application.

3. The key points for consideration included the sufficiency of the demand notice, existence of a debt dispute, and the impact of the pending winding-up proceedings on the application's maintainability. The Tribunal referred the matter to a Larger Bench due to conflicting views on the maintainability of such applications during winding-up proceedings.

4. In light of the Special Bench's order and the need for a consistent decision, the Tribunal directed the matter to be referred to a Larger Bench for a decision on the application's maintainability during the pendency of winding-up proceedings. The Registry was instructed to send the case file to the National Company Law Tribunal, New Delhi, for further consideration by the Larger Bench, in line with the evolving jurisprudence on the issue.