National Company Law Appellate Tribunal
Kishore Shanker Signapurkar vs Prime Soles A Sole Proprietorship ... on 20 February, 2023
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NATIONAL COMPANY LAW APPELLATE TRIBUNAL,
Principal Bench, New Delhi
Company Appeal (AT) (Insolvency) No. 739 of 2018
IN THE MATTER OF:
Kishore Shanker Signapurkar ...Appellant
Vs.
Prime Soles & Anr. ....Respondents
Present:
For Appellant: Mr. Manu Yadav, Advocate
For Respondent: None
ORDER
Per : Justice Rakesh Kumar Jain: (Oral) 20.02.2023: This appeal is directed against the order dated 01.08.2018, passed by the 'Adjudicating Authority' (National Company Law Tribunal, Mumbai Bench), by which an application bearing No. CP No. 273/I&BP/2018 filed by 'Operational Creditor' (Respondent No.1) under Section 9 of the 'Insolvency and Bankruptcy Code, 2016' (in short 'Code'), for resolution of an amount of Rs. 75,54,594/- against the 'Appellant' (Corporate Debtor), has been admitted and 'Corporate Insolvency Resolution Process' (CIRP) has been initiated.
2. Brief facts of the case are that the 'Operational Creditor' used to supply PU Soles to the 'Corporate Debtor' from 2012 onwards and there was a balance of Rs. 75,54,594/- as on 05.08.2017. The 'Operational Creditor' served a 'Demand Notice' dated 08.01.2018 in terms of Section 8 of the Code demanding the aforesaid amount with interest @ 18% p.a. to which the Corporate Debtor filed a reply dated 08.02.2018 and denied its liability, alleging that there was a Company Appeal (AT) (Ins) No. 739 of 2018 2 'commercial understanding' between the 'Operational Creditor' and 'Corporate Debtor' that one 'M/s. Gulshan International Private Limited' (hereinafter referred as 'Gulshan') shall supply goods to the Corporate Debtor through the Operational Creditor and 'Gulshan' shall raise invoices on the Corporate Debtor adding transport charges and fees pertaining to the Operational Creditor, the Corporate Debtor would pay to 'Gulshan' and 'Gulshan' would pay to the Operational Creditor for the services in transporting the goods and fees. It was also stated that 'Gulshan' was paid by the Corporate Debtor for the goods received and, therefore, the Corporate Debtor has paid the entire amount for the goods even twice. The Corporate Debtor has also filed reply to the application under Section 9 and denied its liability.
3. The Adjudicating Authority while referring to the case set up by both the parties in their application, reply & rejoinder, came to a conclusion that there is no doubt about the fact that the Operational Creditor had supplied the goods to the Corporate Debtor and the payment has not been made, therefore, it was a fit case for the purpose of invoking Section 9 of the Code for the initiation of CIRP and to impose moratorium.
4. Aggrieved against the order of admission, the present appeal has been filed. No one has put in appearance on behalf of the Respondent. As a matter of fact, the Respondent is not appearing in this case from the last two - three dates which is apparent from the Zimini Orders. However, we have heard Counsel for the Appellant.
Company Appeal (AT) (Ins) No. 739 of 2018 3
5. Counsel for the Appellant has vehemently argued that the order of admission is patently illegal as there was a 'pre-existing dispute' between the parties. However, Counsel for the Appellant has been very fair and candid with us in admitting that no such plea was ever raised by the Appellant before the Adjudicating Authority and, therefore, no such finding has been recorded as to whether there was a pre-existing dispute or not.
6. Counsel for the Appellant has though laboured very hard in taking us to various invoices and the statements of accounts, available on record, but the fact of the matter is that since no dispute was raised by the Appellant at the time when the matter was heard by the 'Adjudicating Authority' specifically in regard to the existence of a dispute which is a defence available to the Corporate Debtor in a case of Section 9 of the Code and precisely for that reason the legislature has provided a demand notice in the scheme of Section 9 unlike Section 7 of the Code that in case there is a pre-existing dispute between the parties, the Adjudicating Authority shall refrain from admitting the application, filed under Section 9 of the Code which may cause the initiation of the CIRP proceedings and ultimately the interest of the Corporate Debtor may be jeopardized. Since the question of there being existence of dispute is a pure question of fact which has not been raised before the Adjudicating Authority, we wonder as to whether the same can be raised before the Appellate Authority.
7. Therefore, in view of the facts and circumstances of the case, once the Appellant has not raised the issue of existence of pre-existing dispute deliberately before the Adjudicating Authority, it appears that it was satisfied Company Appeal (AT) (Ins) No. 739 of 2018 4 that there was no such pre-existing dispute between the parties and, therefore, it cannot be allowed to be raised for the first time before this 'Appellate Tribunal'. No other point has been raised.
8. For the aforesaid reasons, we do not find any merit in the present case and the same is hereby dismissed. No order as to costs.
[Justice Rakesh Kumar Jain] Member (Judicial) [Naresh Salecha] Member (Technical) Raushan/RR Company Appeal (AT) (Ins) No. 739 of 2018