2017 (11) TMI 1730 - AT - Insolvency and Bankruptcy

Corporate insolvency procedure - existence of dispute - Held that - Admittedly, operational creditor issued notice under sub-section (1) of Section 8 of I & B Code to the Corporate Debtor; in spite of receipt of the such notice, the Corporate Debtor had not disputed the claim nor submitted any reply under sub-section (2) of Section 8 within a period of ten days. It was in the aforesaid circumstances application under Section 9 was filed in Form 5, wherein it was specifically mentioned that no objection has been filed by Corporate Debtor under sub-Section (2) of Section 8. In the aforesaid circumstances and in absence of any specific evidence brought on record, we are not inclined to interfere with the impugned order dated 16th August, 2017.

Summary

Issues Involved:
Admission of application under Section 9 of the Insolvency and Bankruptcy Code, 2016 based on a disputed claim.

Analysis:
The appeal before the National Company Law Appellate Tribunal involved a challenge by the appellant, who was the Director of M/s. International Coil Limited, against an order passed by the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016. The order in question admitted the application made by the respondent, a Financial Creditor, under Section 9 of the I&B Code, leading to the imposition of a moratorium and the appointment of an Interim Resolution Professional. The appellant contended the existence of a dispute and presented certain letters to support this claim, which was countered by the respondent's objection, alleging that the letter provided by the appellant was forged. Despite the respondent's assertion that they received communication from another entity contradicting the appellant's claim, the Tribunal refrained from determining the authenticity of the document in the appeal.

The Tribunal noted that the operational creditor had issued a notice to the Corporate Debtor under Section 8 of the I&B Code, which went unchallenged as the Corporate Debtor did not dispute the claim or provide a reply within the stipulated timeframe. The application under Section 9 was filed on the basis that no objection had been raised by the Corporate Debtor as required under the Code. In the absence of any substantial evidence to the contrary, the Tribunal declined to interfere with the impugned order dated 16th August, 2017. Consequently, the Tribunal found no merit in the appeal and dismissed it without imposing any costs on either party.

In conclusion, the judgment by the National Company Law Appellate Tribunal upheld the decision of the Adjudicating Authority to admit the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, based on the lack of objection from the Corporate Debtor within the specified period. The Tribunal refrained from delving into the authenticity of the disputed document presented by the appellant, focusing instead on the procedural compliance and lack of evidence to challenge the initial order.