9911796707
TMI Blog2020 (10) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... hra, Advocates i/b Rajani Associates ORDER Rajasekhar V.K., Member (J) 1. This is a Company Petition filed under section 9 of the Insolvency Bankruptcy Code, 2016 (IBC) by Agrocorp International Private (PTE) Limited, a Private Company incorporated under the Companies Act (CAP 50) of Republic of Singapore, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against National Steel and Agro Industries Limited [CIN: L27100MH1985PLC140379] ( the Corporate Debtor ). 2. The Corporate Debtor is a company incorporated on 09.01.1985 under the Companies Act, 1956, as a public company limited by shares with the Registrar of Companies, Maharashtra, Mumbai. Its registered office is at No. 621, Tulsiani Chambers, Nariman Point, Mumbai - 400021, within the State of Maharashtra. Therefore, this Bench has jurisdiction to deal with the present petition. 3. The present petition was filed on 22.02.2019 before this Adjudicating Authority on the ground that the Corporate Debtor failed to make payment of a sum of $930,000.00 (US Dollars nine lakh thirty thousand only) as principal amount and $38,971.84 (US Dollars thirty-eight thousand nine hundred seventy-one and cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of dues to the Operational Creditor will lead to suspension of membership of the Corporate Debtor. A copy of these emails is placed at pp. 64-65 of the petition. (f) A copy of ledger account of the Corporate Debtor in the books of Operational Debtor is placed as Exhibit G at p.54 of the petition. (g) The Operational Creditor issued a Demand Notice to the Corporate Debtor under section 8 of IBC. A copy of the said Demand Notice is placed as Exhibit I at pp. 67-70 of the petition. There was no reply to the Demand Notice. (h) Affidavit as required under section 9(3)(b) of the IBC, 2016 is placed at pp. 74-75 of the petition. 5. Mr. Zal Andhyarujina a/w Mr. Shrey Sancheti, Mr. Devesh Juvekar and Mr. Dikshat Mehra i/b Rajani Associates, Advocates, appeared on behalf of the Corporate Debtor. 6. In its reply dated 14.06.2019, the Corporate Debtor has set up the following defence: (a) The present petition is defective for want of Board Resolution of the Operational Creditor as required under the Code, authorising the initiation of corporate insolvency resolution process as per para I on p.3 of the reply. (b) The Demand Notice is defective. The Demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 13.11.2019. The contentions of both the parties to the present petition can be collated and answered as under: On foreign award 'not binding' upon parties in India 9. The Corporate Debtor has referred to section 46 of the Arbitration and Conciliation Act, 1996 which provides that the enforceability of a foreign award is a pre-condition to its binding nature under the Indian law. 10. Section 46 of the Arbitration and Conciliation Act, 1996 reads as under: 46. When foreign award binding.--Any foreign award which would be enforceable under this Chapter shall be treated as binding for all purposes on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defense, set off or otherwise in any legal proceedings in India and any references in this Chapter to enforcing a foreign award shall be construed as including references to relying on an award. 11. Accordingly, the reliance on the foreign award in the present petition by the Operational Creditor, without it being declared enforceable under applicable Indian law, is incorrect. 12. The provisions of section 46 read with section 48 and 49 of the Arbi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time of the application, produce before the court-(a) the original award or a copy thereof, authenticated in the manner required by the law of the country in which it was made; (b) the original agreement for arbitration or a duly certified copy thereof; and (c) such evidence as may be necessary to prove that the award is a foreign award. 24. Perusal of the above quoted provisions shows that under Sub-section 1, the court can refuse to enforce the award only after the Respondent in those proceedings satisfies the court that the award is not enforceable for the reasons enumerated in Sub-section 1 of Section 48. In other words, Sub-section 1 of Section 48 casts the burden of proof on the Respondent to show that the foreign award, enforcement of which is sought, is not enforceable. In other words, if the Respondent in a petition either does not appear or fails to discharge the burden, the court would be justified in enforcing the award. So far as Sub-section 2 of Section 48 is concerned, it confers powers on the court to refuse to enforce an award, if the court is satisfied that the subject matter of the difference is not capable of settlement by the arbitration under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. The United Kingdom, where the Award has been passed in the present case, is a reciprocating territory in terms of section 44A vide notification No. 51 dated 01.03.1953 published in the Gazette of India, Extraordinary. Thus, the Award would no longer be open to challenge on merits. 18. The Operational Creditor submits that a Foreign Award is binding on persons between whom it was made and can be used by any of them by way of defence, set-off or otherwise in any legal proceeding in India, in terms of section 46 of the Arbitration and Conciliation Act, 1996. 19. The Operational Creditor has relied on a judgment of the Hon'ble National Company Law Appellate Tribunal (NCLAT) in the matter of Usha Holdings L.L.C. Anr. Vs. Francorp Advisors Pvt. Ltd. C.P. No. (IB)- 196(PB)/2017 which observed the following: 4. Learned counsel appearing on behalf of the Appellants submitted that the Adjudicating Authority has no jurisdiction to decide the legality and viability of foreign decree and no right finding can be given by it. 5. *** - 13. *** 14. In the circumstances, we answer the first question in favour of the Appellant and hold that the Adjudicating Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s replies in the arbitration proceedings. 23. The Corporate Debtor submits that the foreign award had not obtained finality as it could either, prefer an appeal in the appropriate forum in London or it can object to the enforcement of the award under the provisions laid under section 48 of the Arbitration Act. 24. The amount due under the un-enforced foreign award does not fall under the definition of claim or debt under the IBC as the foreign award has not been enforced in India under the Arbitration Act, it cannot be said to be a judgment under Indian law and therefore there can be no right to payment. 25. The Hon'ble Supreme Court in K. Kishan vs. M/s. Vijay Nirman Company Pvt. Ltd (Civil Appeal No. 21824 of 2017) held that pendency of challenge to an arbitral award qualifies as 'pre-existing dispute' for the purposes of initiating corporate insolvency resolution process by the operational creditor. 26. The Operational Creditor referred to section 3(6) of the IBC, 2016 which defines claim as under: claim means-- (a) a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rationale that a company being juristic person acts only through its board of directors, who can exercise all powers that the company is entitled to exercise, and it may through a resolution authorise any person to present an application. Further, officers authorised by the board cannot in turn give a power of attorney to any other person. 33. Board Resolution dated 05.07.2018 (Exhibit A at p.9 of the petition) appoints Mr. Vijaykumar Gopalan Iyengar, Director as constituted attorney giving him the authority to appoint and authorise substitute as attorneys and to represent the Operational Creditor in various courts including the National Company Law Tribunal under the provisions of the IBC, 2016 of India. Further at pp. 12-13 of the petition a Power of Attorney dated 08.11.2018 signed by Mr. Vijaykumar Gopalan Iyengar, Director is annexed which states that the Operational Creditor appoints Mr. Nirav Dilip Gandhi as a constituted attorney to represent the Operational Creditor in various courts including the National Company Law Tribunal under the provisions of the IBC, 2016 of India along with Mr. Vijaykumar Gopalan Iyengar. 34. Hence it is clear from the above that Mr. Nirav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenge by the Corporate Debtor on this score need to be repelled. On a pre-existing dispute between the parties since the Foreign Award has not obtained finality 37. The Hon'ble Supreme Court in K. Kishan vs. M/s. Vijay Nirman Company Pvt. Ltd (Civil Appeal No. 21824 Of 2017) held that pendency of challenge to an arbitral award qualifies as 'pre-existing dispute' for the purposes of initiating corporate insolvency resolution process by the operational creditor. In the present case, there is no pending challenge to the Arbitral Award. This Bench is of the considered view that it is not possible to wait indefinitely for the Corporate Debtor to challenge the Arbitral Award, and that it has to decide the present petition on the basis of the admitted positions, that is to say, there is an Arbitral Award passed by a competent Arbitral Tribunal after the consideration of the positions of both the sides, and there is no challenge to the Arbitral Award dated 16.04.2018 in a manner known to law. Hence the same cannot be considered as a pre-existing dispute, and the objection of the Learned Counsel for the Corporate Debtor on this count is rejected. On defective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we hold that a 'Power of Attorney Holder' is not empowered to file application under section 7 of the 'I B Code', we further hold that an authorised person has power to do so. 41. Therefore, on a plain reading of this decision, it is held that Mr. Nirav Gandhi has the proper authority to file the present petition, and the objection raised by the Corporate Debtor holds no water. 42. Therefore, the Petition made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is more than minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. 43. The Operational Creditor has proposed Mr. Rajeev Mannadiar as Interim Resolution Professional (IRP) in the matter. 44. It is, accordingly, hereby ordered as follows:- (a) The petition bearing CP (IB) No. 798/MB/C-IV/2019 filed by Agrocorp International ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 001, is hereby appointed as Interim Resolution Professional to carry out the functions as mentioned under IBC. The fee payable to IRP or, as the case may be, the RP shall be compliant with such Regulations, Circulars and Directions as may be issued by the Insolvency Bankruptcy Board of India (IBBI). The IRP/RP shall carry out his functions as contemplated by sections 15, 17, 18, 19, 20 and 21 of the IBC. (g) During the CIRP Period, the management of the Corporate Debtor shall vest with the IRP or, as the case may be, the RP in terms of section 17 of the IBC. The officers and managers of the Corporate Debtor shall provide all documents in their possession and furnish every information in their knowledge to the IRP within a period of one week from the date of receipt of this Order, in default of which coercive steps will follow. (h) The Operational Creditor shall deposit a sum of ₹ 3,00,000/- (Rupees three lakh only) with the IRP to meet the expenses arising out of issuing public notice and inviting claims. These expenses are subject to approval by the Committee of Creditors (CoC). (i) The IRP/RP shall submit periodical reports to this Adjudicating Authority indicati ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
