2021 (2) TMI 474 - AT - Insolvency and Bankruptcy

Maintainability of new Application which was filed under Section 9 of I B, Code, inspite of earlier Application under Section 9 - HELD THAT - We have gone through the earlier Application under Section 9 which was filed and the new Application which was filed under Section 9 of I B, Code. Both of the Applications referred to the same amount and similar facts are averred. We are not ready to accept the submissions made by the Learned Counsel that the Corporate Debtor had stated that it would settle the dues and because of that the earlier Application was withdrawn. The Learned Counsel for the Appellant referred to earlier Order of withdrawal Annexure A/3 where the Tribunal recorded that Learned Counsel for the Operational Creditor submitted that he has instructions from the Corporate Debtor to withdraw the matter . On basis of such noting in the earlier Order (which could even be typing error) the argument is tried to be made that there was offer of settlement. We do not accept such submissions. It would be strange that the Opposite Party gives instructions to the other side and other side on instructions from the Opposite Party withdrawing petition. Even otherwise, when present Application under Section 9 is filed, the earlier Reply Notice which was sent by the Corporate Debtor discloses Pre-existing dispute. The Section 9 Application claims debt relying on Ledger Account of Appellant itself. This read with the Notices on record shows various disputes pre-existing between parties. That being so, even if one is to look into merits in the alternative, the Application under Section 9 does not show that it deserves to be admitted. Appeal dismissed.

Summary

Issues:
1. Maintainability of the application under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Fresh cause of action due to a subsequent notice under Section 8 of the I&B Code.
3. Existence of pre-existing disputes between the parties.
4. Admissibility of the Section 9 application based on ledger account and past notices.

Issue 1: Maintainability of the application under Section 9:
The judgment pertains to an appeal arising from an order dismissing an application under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor contended that the application was not maintainable as a similar application had been withdrawn previously without liberty to file a fresh one. The Tribunal upheld the dismissal, emphasizing that the withdrawal of the earlier application without liberty to file a fresh one rendered the subsequent application not maintainable.

Issue 2: Fresh cause of action due to subsequent notice under Section 8:
The Appellant argued that a fresh cause of action arose due to a subsequent notice issued under Section 8 of the I&B Code. The Tribunal examined the sequence of events, including the withdrawal of the earlier application and subsequent notices. Despite the Appellant's claim of a fresh cause of action, the Tribunal found that the new application under Section 9 did not present any new grounds or circumstances warranting a different outcome.

Issue 3: Existence of pre-existing disputes:
The judgment highlighted the pre-existing disputes between the parties, as evidenced by a reply from the Corporate Debtor to a previous notice under Section 8. The Tribunal noted that the Section 9 application relied on the ledger account of the Appellant, which, when considered alongside the past notices and disputes, failed to demonstrate a clear entitlement to admission.

Issue 4: Admissibility based on ledger account and past notices:
The Tribunal scrutinized the contents of the Section 9 application, which referenced the earlier proceedings and disputes. Despite the Appellant's assertion of settlement discussions leading to the withdrawal of the initial application, the Tribunal rejected this argument, emphasizing the lack of supporting evidence on record. Additionally, the Tribunal found that the application did not merit admission due to the existence of unresolved disputes between the parties.

In conclusion, the Tribunal dismissed the appeal, ruling that there was no merit in the arguments presented. The Appellant was granted liberty to pursue alternative remedies in other forums if permissible by law.