2017 (9) TMI 1665 - Tri - Companies Law

Determination as per the provisions of the Insolvency and Bankruptcy Code 2016 - Held that - After hearing submissions of the counsel for the petitioner and respondent and having perused the record, it is clear that the petitioner has filed the affidavit and bank statement on 17.07.2017 and 18.07.2017 respectively. Therefore, the instant petition stands ABATED for non-compliance of the provisions in view of the MCA notification dated 29.06.2017.

Summary

Issues:
Determining the validity of a Company Petition filed under sections 433(e) and (f), 434(i)(a) and 439(i)(b) of the Companies Act, 1956, now governed by the Insolvency and Bankruptcy Code, 2016 (IBC). Compliance with MCA notification no. GSR 732(E) dated 29.06.2017 regarding the filing of Affidavit and Bank Statement under Section 9(3)(b) and (c) of the IBC, 2016.

Analysis:

Issue 1: Validity of Company Petition under IBC
The Company Petition filed by the Operational Creditor (OC) against the Corporate Debtor (CD) was transferred to the National Company Law Tribunal from the High Court. The OC, engaged in coal supply, claimed a balance sum of ?2,59,33,935 from the CD for non-cooking coal supplied. The CD, engaged in paper manufacturing, did not respond to the statutory notice demanding payment, leading the OC to initiate Corporate Insolvency Resolution Process under the IBC, 2016. The CD opposed the petition on technical grounds, citing a Ministry of Corporate Affairs (MCA) notification regarding compliance requirements under the IBC. The CD failed to comply with the notification, leading to the petition being abated.

Issue 2: Compliance with MCA Notification
The CD's counsel argued that the petition should be dismissed due to non-compliance with the MCA notification, which required filing of Affidavit and Bank Statement by a specified date. The CD failed to meet this deadline, filing the necessary documents after the prescribed date. The CD's reliance on previous judgments where petitions were abated for similar non-compliance was noted. The OC's reliance on other judgments to support the application's validity was deemed irrelevant given the specific circumstances of the present case. The Tribunal found that the CD's failure to comply with the notification rendered the petition abated, in accordance with the law.

In conclusion, the Company Petition was abated due to the CD's failure to adhere to the compliance requirements set forth in the MCA notification. The Tribunal emphasized the importance of timely compliance with statutory provisions and directed the Registry to inform both the OC and the CD of the Order.