National Company Law Appellate Tribunal
N.S. Rangachari vs Consolidated Construction Consortium ... on 12 December, 2019
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
NEW DELHI
Company Appeal (AT) (Insolvency) No. 19 of 2019
IN THE MATTER OF:
N. S. Rangachari ...Appellant
Versus
Consolidated Construction Consortium Ltd. ...Respondent
Present:
For Appellant : Mr. K. Kumar, Senior Advocate with
Mr. Y.Lokesh and Mr. Ashish Kumar Upadhayay,
Advocates
For Respondent : Mr. R. Sudhakaran, Advocate
ORDER
12.12.2019 'M/s. Consolidated Construction Consortium Limited'- ('Operational Creditor') moved an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 ("I&B Code" for short) for initiation of the 'Corporate Insolvency Resolution Process' against 'M/s. Hitro Energy Solutions Private Limited'. The Adjudicating Authority (National Company Law Tribunal), Single Bench, Chennai, by impugned order dated 6th December, 2018 having admitted the application, the present appeal preferred by Mr. N.S. Rangachari, Shareholder of 'M/s. Hitro Energy Solutions Private Limited'.
2. Learned counsel appearing on behalf of the Appellant submits that the application under Section 9 was preferred by 'M/s. Consolidated Construction 2 Consortium Limited'- ('Operational Creditor') was not maintainable against 'M/s. Hitro Energy Solutions Private Limited' which is not the 'Corporate Debtor' of the 'Operational Creditor'.
3. Relying on the record, it is submitted that 'M/s. Consolidated Construction Consortium Limited'- ('Operational Creditor') has issued order for supply of material to one 'M/s. Hitro Energy Solutions', which is a separate Company.
4. It is submitted by the counsel for the Appellant that neither goods were supplied by 'M/s. Consolidated Construction Consortium Limited'- ('Operational Creditor') nor given any services to 'M/s. Hitro Energy Solutions Private Limited' who was shown as 'Corporate Debtor', 'M/s. Consolidated Construction Consortium Limited' does not come within the meaning of 'Operational Creditor' in terms of Section 5(20) read with Section 5(21) of the 'I&B Code'.
5. Further, according to the counsel for the Appellant, the requisition for supply was made to 'M/s. Hitro Energy Solutions Private Limited' by 'Purchase Order' to one 'M/s. Hitro Energy Solutions', which is a proprietary concern and 'M/s. Hitro Energy Solutions Private Limited' which is a separate entity (Company). If the period of limitation is counted, the application under Section 9 was also barred by limitation.
6. Mr. R. Sudhakaran, learned counsel appearing on behalf of 'M/s. Consolidated Construction Consortium Limited'- ('Operational Creditor') submitted that 'M/s. Hitro Energy Solutions Private Limited' prepared a 'Memorandum of Association' on 22nd January, 2014 to take over 'M/s. Hitro Company Appeal (AT) (Insolvency) No. 19 of 2019 3 Energy Solutions Private Limited' to whom 'Purchase Order' was issued by 'M/s. Consolidated Construction Consortium Limited'- ('Operational Creditor').
7. However, there is nothing on the record to suggest that by any list prepared 'M/s. Hitro Energy Solutions Private Limited' has taken over 'M/s. Hitro Energy Solutions'. The 'Purchase Orders' are on the record which has been referred to in Part IV of Form 5 (application under Section 9), relevant of which is extracted below:
8. List of other Documents attached 1.
to this application in order to prove Purchase Order No. :
the existence of operational debt and KH000015 dated the amount in default 24.06.2013.
2.Purchase Order No. :
KH000016 dated
24.06.2013.
3. Purchase Order No. :
KH000017 dated
24.06.2013.
4. Cheque given by CMRL to
the Corporate Debtor.
5. Letter dated 23.07.2016
sent by the Operational
Creditor.
8. The 'Purchase Orders' have also been enclosed by the Appellant, one of which is the sample copy of the 'Purchase Order' is extracted below:
Company Appeal (AT) (Insolvency) No. 19 of 2019 4
9. The 'Purchase Orders', which makes it clear that 'M/s. Consolidated Construction Consortium Limited' is a 'Purchaser' and do not come within the meaning of 'Operational Creditor' having not supplied any goods nor given any services to 'M/s. Hitro Energy Solutions Private Limited'. In any case, whether 'M/s. Hitro Energy Solutions Private Limited' or 'M/s. Hitro Energy Solutions' all Company Appeal (AT) (Insolvency) No. 19 of 2019 5 'Purchase Orders' having issued on 24th June, 2013 and advance cheques have been issued for subsequently such orders, 'M/s. Consolidated Construction Consortium Limited' cannot move application under Sections, 7 or 9 or the 'I&B Code'.
10. As the application under Section 9 was not maintainable at the instance of 'M/s. Consolidated Construction Consortium Limited', we set aside the impugned order dated 6th December, 2018. The application under Section 9 preferred by 'M/s. Consolidated Construction Consortium Limited' is dismissed. 'M/s. Hitro Energy Solutions Private Limited' is released from rigour of the 'Corporate Insolvency Resolution Process'. The case is remitted to the Adjudicating Authority, Single Bench, Chennai to notice the 'Interim Resolution Professional'/ 'Resolution Professional' and decide the fees and cost incurred by him which is to be paid by 'M/s. Consolidated Construction Consortium Limited'.
The appeal is allowed with aforesaid observations and directions. No costs.
[Justice S.J. Mukhopadhaya] Chairperson [Justice Bansi Lal Bhat] Member (Judicial) [Justice Venugopal M.] Member (Judicial) /ns/gc Company Appeal (AT) (Insolvency) No. 19 of 2019