2017 (10) TMI 912 - Tri - Insolvency and Bankruptcy

Proceedings under Insolvency and Bankruptcy Code, 2016 - whether as the matter being subjudice before the Hon ble High Court, hence no parallel proceedings under I&B Code 2016 must be carried out simultaneously? - Held that - This Bench is of the opinion that once a Petition has been transferred from the High Court, then unless and until it is recalled by an order of the High Court, the Petition cannot be transmitted back to High Court. We, as a subordinate Court, cannot and must not revert back a Petition with an observation that the same to be decided by the Hon ble High Court. There is no dispute on facts that this Petition in question, was transferred by the Hon ble High Court, hence the NCLT has neither jurisdiction nor empowered to reverse that direction of the Hon ble High Court. Facts of the case have revealed that the Petitioner is running a proprietary concern viz. M/s. M. Tex-Chem, Ghatkopar, Mumbai and on 12-04-2006, the Company had placed order for supply of Silicon 5000 . The agreed payment term was 30 days, else 24% interest was payable. Since 2006, the Petitioner was regularly supplying the goods. The books of Accounts are duly maintained and demonstrated that the receivable amount as on 12-05-2014 was ₹ 10,74,450, The Petitioner had sent the Ledger Account to the Debtor Company for verification which was marked as tallied by one of the Company s Officer, as also duly stamped. The Petitioner issued a legal notice; however, no payment was made. Having no option left, the Petitioner filed the Petition before the Hon ble High Court under the old provisions of the Companies Act. As a result the Debt as also the Default has duly been established by the Petitioner. Considering the totality of the facts and circumstances this Petition now under consideration deserves to be Admitted . The Petitioner has proposed the name of the Interim Resolution Professional Mr. Hemant Mehta, Registration No. IBBI/IPA-001/IP-P00027/2016-17/10060. The appointed IRP shall perform the duties as defined under section 18 of the Code. He shall also submit the resolution plan for approval as prescribed under section 31 of the Code. Since the Petition is Admitted , hence the Moratorium shall commence as prescribed under section 14 of the I&B Code

Summary

Issues:
1. Transfer of petition from High Court to NCLT under I&B Code 2016.
2. Legal objections raised regarding the transfer and maintainability of the petition.
3. Dispute over service of the original petition on the respondent.
4. Merits of the petition filed by the operational creditor.
5. Appointment of Interim Resolution Professional and commencement of Corporate Insolvency Resolution Process.

Transfer of Petition from High Court to NCLT:
The petition, originally filed under the old provisions of the Companies Act, 1956, was transferred to NCLT, Mumbai, in compliance with the provisions of the I&B Code. The respondent raised objections citing the transfer rules notified by the Central Government, arguing that the petition was wrongly transferred as it had already been served before the transfer rules came into effect.

Legal Objections and Maintainability:
The respondent contended that the petition under section 9 was defective, lacking necessary details, including invoices and a demand notice. The respondent also claimed that the petition failed to address disputes, provide bank statements, and allegedly suppressed facts, urging for its rejection. The petitioner, however, argued that objections were raised belatedly and that sufficient opportunities were given to the respondent to defend the case.

Dispute Over Service of Original Petition:
The respondent claimed the original petition was served before the transfer rules were notified, questioning the authenticity of the service date and the document provided as proof. The respondent's objections regarding the service date were scrutinized, and the authenticity of the document was doubted.

Merits of the Petition:
The petitioner demonstrated the supply of goods and default in payment by the respondent, emphasizing the acknowledgment of debt by the respondent. The petitioner highlighted the lack of dispute from the respondent's side and presented evidence supporting the claim for admission of the petition.

Appointment of Interim Resolution Professional and Commencement of CIRP:
After considering the facts and circumstances, the bench admitted the petition, appointed an Interim Resolution Professional, and initiated the Corporate Insolvency Resolution Process. The moratorium period commenced as per the I&B Code, restricting certain actions against the corporate debtor and ensuring the continuation of essential goods or services supply. The order of moratorium was to remain in effect until the completion of the resolution process or liquidation, with immediate action required for the public announcement of the insolvency resolution process.

This detailed analysis of the judgment covers the issues involved comprehensively, addressing each aspect of the legal proceedings and decisions made by the Tribunal.