2017 (6) TMI 1308 - Tri - Companies Law

Maintainability of application - default occurred with regard to the amount of unpaid debt - Winding up petition - appellant submits that she has instructions not to press this appeal - HELD THAT - The authorised quality person had cleared and approved the Channels which were dispatched only after his approval and in his presence. If the Channels supplied were defective or were of poor quality then 'Operational debtor' should have returned the same and should not have utilized by fabrication and galvanisation. Therefore we are not able to persuade ourselves to accept the defence raised in reply to a notice issued by the 'Operational Creditor' on 16.08.2016 demanding unpaid debt. Accordingly we are of the considered opinion that at the end of the 'Operation Debtor' default has occurred and the defence raised to defeat the payment of unpaid debt is moonshine and cannot be accepted. Application admitted.

Summary

Issues:
- Transfer of winding up petition to NCLT
- Unpaid debt dispute between Operational Creditor and Operational Debtor
- Compliance with Insolvency and Bankruptcy Code

Transfer of Winding Up Petition to NCLT:
The petition was originally filed before the Delhi High Court for winding up under sections 433 (e), 434, and 439(b) of the Companies Act, 1956. Following the constitution of the NCLT, the High Court transferred the matter to the NCLT as per the notification issued by the Ministry of Corporate Affairs. The NCLT ordered further proceedings and directed the transmission of the petition record to the Principal Bench for adjudication.

Unpaid Debt Dispute:
The Operational Creditor, engaged in the steel and iron goods business, filed a petition against the Operational Debtor for unpaid debt of ?90,23,846. The Operational Debtor alleged that the materials supplied were defective, which the Creditor refuted, providing evidence of quality checks and approvals. Despite demand notices and legal notices for payment, the debt remained unpaid, leading to the NCLT's decision to admit the application and declare a moratorium under Section 13 of the Insolvency and Bankruptcy Code.

Compliance with Insolvency and Bankruptcy Code:
The NCLT admitted the application, initiating the insolvency process against the Operational Debtor. It directed the appointment of an insolvency resolution professional by the Insolvency and Bankruptcy Board of India within ten days. All parties associated with the Corporate Debtor were mandated to cooperate with the Resolution Professional. Failure to cooperate could lead to further legal action as per the provisions of the Code. The judgment concluded with the disposal of the application in line with the Code's requirements.