2019 (3) TMI 1522 - AT - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process - Application u/s 9 of I&B Code preferred by Operational Creditor admitted - order of Moratorium has been passed and Interim Resolution Professional has been appointed - whether there is a debt payable by the Corporate Debtor and whether there is an existence of dispute? - HELD THAT - The Adjudicating Authority having noticed that there is debt payable which is more than ₹ 1,00,000/- and in absence of any existence of dispute rightly admitted the application under Section 9 of the I&B Code . At this stage, learned counsel appearing on behalf of the Appellant submits that the Appellant is ready to settle the matter with the Operational Creditor . However, even after such settlement, we cannot set aside the impugned order to give any relief to the Corporate Debtor . In fact, the appeal at the instance Corporate Debtor - AP Coated Drums and Barrels Pvt. Ltd. is not maintainable in the light of the decision of Innoventive Industries Limited 2017 (9) TMI 58 - SUPREME COURT OF INDIA . While no relief can be granted in this appeal, make it clear that this order will not come in the way of any other person to move an appropriate application before the Committee of Creditors under Section 12 A of the I&B Code for appropriate relief.

Issues:
1. Condonation of delay in preferring appeal
2. Admission of application under Section 9 of the Insolvency and Bankruptcy Code, 2016
3. Dispute regarding outstanding payment between Operational Creditor and Corporate Debtor
4. Existence of debt payable by the Corporate Debtor
5. Maintainability of appeal by Corporate Debtor
6. Possibility of settlement between parties

1. Condonation of Delay:
The Appellate Tribunal, after hearing the counsel for the Appellant, condoned the delay of 3 days in preferring the appeal based on satisfactory grounds, thereby disposing of I.A. No. 133 of 2019.

2. Admission of Application under Section 9 of I&B Code:
The appeal was filed by the Corporate Debtor against the order admitting the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, by the Operational Creditor. The order included the appointment of an Interim Resolution Professional and the declaration of a moratorium.

3. Dispute Regarding Outstanding Payment:
The dispute arose from the outstanding payment of &8377; 37,72,430/- by the Corporate Debtor to the Operational Creditor for the supply of goods. The Operational Creditor claimed that the last payment was made within the stipulated time, while the Corporate Debtor sought to adjust VAT amounting to &8377; 18,01,726/-.

4. Existence of Debt Payable:
The Adjudicating Authority admitted the application under Section 9 of the I&B Code, as it found a debt payable by the Corporate Debtor exceeding &8377; 1,00,000/- without any existence of dispute.

5. Maintainability of Appeal:
The Appellate Tribunal noted that the appeal by the Corporate Debtor was not maintainable as per the decision in "Innoventive Industries Limited" by the Supreme Court, emphasizing that once an insolvency professional is appointed, erstwhile directors cannot maintain an appeal on behalf of the company.

6. Possibility of Settlement:
Although the Appellant expressed readiness to settle with the Operational Creditor, the Tribunal clarified that the impugned order cannot be set aside to provide relief to the Corporate Debtor. However, it allowed other parties to move applications before the Committee of Creditors for appropriate relief under Section 12 A of the I&B Code.

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