2018 (6) TMI 1259 - AT - Insolvency and Bankruptcy

Corporate insolvency process - existence of dispute - Application was not filed directly by the Operational Creditor but by its Company Secretary - Held that - As the Appellant requested to allow the Appellant to file another Application under Section of 9 I&B Code , however, permission cannot be granted as the application filed by the Appellant has been dismissed also on the ground of existence of a dispute, even prior to the issuance of the demand notice sub-Section (1) of Section 8 of the I & B Code . Respondents brought to the notice of the Adjudicating Authority certain disputes which were also supported by e-mail dated 13th May, 2015 which were marked as Annexure R-4. Other documents were also brought to the notice to the Adjudicating Authority. In reply, learned Counsel for the Appellant referred to a letter dated 2nd April, 2016 issued by an Advocate on behalf of the Appellant but such stand has been disputed by the Respondent. Even after dispute of the amount if certain amount is admitted by the Respondents but has not paid such amount the Appellant may prefer application under Section 9 after notice to the Respondent under Sub-Section (1) of Section 8 of the I & B Code giving a reference to such undisputed debt, if defaulted - Allow the Appellant to move before the appropriate forum in respect of the admitted dues if any.

Summary

Issues:
- Dismissal of application under Section 9 of the Insolvency & Bankruptcy Code, 2016 due to the existence of a dispute and incorrect filing by the Company Secretary.

Analysis:
The appeal was filed by M/s Paharpur Colling Towers Limited (Operational Creditor) against the order passed by the Adjudicating Authority, which dismissed the application under Section 9 of the Insolvency & Bankruptcy Code, 2016. The dismissal was based on the grounds that there was an "existence of dispute" and the application was not filed directly by the Operational Creditor but by its Company Secretary. The Appellant argued that more time should have been granted to rectify the defect and that the Company Secretary was authorized to file the application. However, the Appellate Tribunal referred to a previous judgment and held that a "Power of Attorney Holder" is not competent to file an application on behalf of a Financial Creditor or Operational Creditor. Therefore, the request to file another application under Section 9 of the I&B Code was denied.

The Respondents had raised disputes supported by documents, including an email and other records. The Appellant's Counsel mentioned a letter issued by an Advocate on behalf of the Appellant, but this was disputed by the Respondent. The Appellate Tribunal noted that even if there is a dispute over the amount, if a certain amount is admitted by the Respondents but remains unpaid, the Appellant can prefer an application under Section 9 after giving notice to the Respondent as per the provisions of the I&B Code.

In conclusion, the Appellate Tribunal did not interfere with the impugned order but allowed the Appellant to approach the appropriate forum regarding any admitted dues. The appeal was disposed of with this observation and no costs were awarded.