Amrit Feeds Ltd vs S.S. Enterprises
- CitationCompany Appeal (AT) (Insolvency)No. 678 of 2019
Ratio decidendi
The rule this decision rests on
The Adjudicating Authority, exercising the power conferred by Rule 11 of the NCLT Rules, 2016, may restore an operational creditor's petition under section 9 of the Insolvency and Bankruptcy Code, 2016 to its original file where the petition was disposed of on a technical ground and the restoration is needed because an earlier order closing the corporate insolvency resolution process was set aside on a settlement that did not disclose the subsisting petition. Where a petition under section 9 has been rendered infructuous only by the initiation of a corporate insolvency resolution process against the corporate debtor on another creditor's application, and that initiation order is later set aside, an operational creditor who has already issued a demand notice under section 8(1) and has been directed to file its claim before the interim resolution professional is not required to issue a fresh demand notice or file a fresh section 9 application before seeking restoration of its petition. Before any order is passed on a restored section 9 petition, the corporate debtor is entitled to notice and an opportunity to be heard.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Company Appeal (AT) (Insolvency)No. 678 of 2019 IN THE MATTER OF: Amrit Feeds Ltd. .....Appellant Vs. S.S. Enterprises ......Respondents Present : For Appellant: Mr. Diwakar Maheshwari, Mr. Vivek Jhunjhunwala, Partiksha Mishra, Advocates
O R D E R
04.07.2019 - The Appellant - 'Amrit Feeds Limited' ('Corporate Debtor') has
challenged the order dated 10th May, 2019 passed by the Adjudicating
Authority, (National Company Law Tribunal), Kolkata Bench restoring petition
u/s 9 of the Insolvency & Bankruptcy Code, 2016 ('I&B' Code) filed by the S.S.
Enterprises' ('Operational Creditor').
2. The brief facts of the case is that a 'Corporate Insolvency Resolution
Process' was initiated against 'Amrit Feeds Limited' ('Corporate Debtor') by order
dated 15th January, 2019 passed in CP (IB) No. 333/KB/2018 on an application
u/s 9 preferred by 'Agarwal Industries Pvt. Ltd.'
3. Subsequently, another application u/s 9 of the Insolvency & Bankruptcy
Code, 2016 ('I&B' Code) was preferred by Respondent 'S.S. Enterprises',
('Operational Creditor') against 'Amrit Feeds Limited' ('Corporate Debtor'), being
CP (IB) No. 1238/KB/2018. ....contd.
4. The Adjudicating Authority, Kolkata Bench having noticed that the
'Corporate Insolvency Resolution Process' has already been initiated against
'Amrit Feeds Limited' ('Corporate Debtor') by order dated 25th January, 2019
directed the Applicant - 'S.S. Enterprises' (Respondent herein) to file its claim
before the 'Interim Resolution Professional' and thereby disposed of the
application.
5. The 'Corporate Insolvency Resolution Process' initiated against 'Amrit
Feeds Limited' ('Corporate Debtor') pursuant to order passed in CP (IB) No.
333/KB/2018 was challenged by promoter of 'Amrit Feeds Limited' ('Corporate
Debtor') before this Appellate Tribunal in Company Appeal (AT)(Insolvency) No.
102/2019. In the said case, the parties settled the matter and this Appellate
Tribunal by order dated 11th February, 2019, set aside the order of initiation of
'Corporate Insolvency Resolution Process' against 'Amrit Feeds Limited'
('Corporate Debtor').
6. In the said Company Appeal (AT)(Insolvency) No. 102/2019, it was not
brought to the notice of this Appellate Tribunal that the Adjudicating Authority
by order dated 25th January, 2019 had not entertained the application u/s 9
filed by S.S. Enterprise (Respondent - 'Operational Creditor' herein) and S.S.
Enterprises was asked to raise claim before the 'Interim Resolution Professional'
appointed pursuant to order passed in CP (IB) No. 333/KB/2018.
7. The Respondent - 'S.S. Enterprises' having come to know that the
'Corporate Insolvency Resolution Process' as was initiated against 'Amrit Feeds
Company Appeal (AT) (Insolvency)No. 678 of 2019 2 Limited' ('Corporate Debtor') has been closed due to settlement allowed by this
Appellate Tribunal on 11th February, 2019 brought the same to the notice of the
Adjudicating Authority by filing an application - MA 302/KB/2019 with prayer
to restore the Company Petition No. CP (IB) No. 1238/KB/2018 which has
been restored by the Adjudicating Authority, Kolkata Bench by impugned order
dated 10th May, 2019 and reads as follows: -
ORDER
"None appears for the Operational creditor
as well as corporate debtor. Misc.A. 302/KB/2018
is filed by the operational creditor for restoration of
earlier CP, which was disposed off by this
authority on technical ground. Application in MA
302/KB/19 is allowed and stand disposed off.
Main CP is restored Corporate Debtor to now
directed to file affidavit-in-reply within two weeks
by giving copy to the other side and the operational
creditor to file rejoinder within seven days
thereafter. Main CP to appear on 15.07.2019 for
further consideration.".
8. The Appellant ('Corporate Debtor') submitted that the Adjudicating
Authority (National Company Law Tribunal) ('NCLT'), Kolkata Bench has no
jurisdiction to recall its earlier order having no power of review or to recall.
Company Appeal (AT) (Insolvency)No. 678 of 2019 3
9. Further according to him, the Respondent should have issued a fresh
Demand Notice u/s 8(1) and only thereafter should have preferred a fresh
application u/s 9 of the Insolvency & Bankruptcy Code, 2016 ('I&B' Code).
10. It is further submitted that before Restoration of the application and
passing of order in MA No. 302/KB/19 the 'Corporate Debtor', should have been
noticed and heard.
11. However, such submissions cannot be accepted for the following
reasons:-
(i) The 'S.S. Enterprises' having already issued Demand notice u/s
8(1) and thereafter as the 'Corporate Debtor' ('Amrit Feeds Limited')
failed to pay the amount, the Respondent 'S.S. Enterprises'
('Operational Creditor') had filed the application u/s 9 against the
'Corporate Debtor'.
(ii) The Petition filed by the Respondent - 'S.S. Enterprises'
('Operational Creditor') was made infructuous only because the
'Corporate Insolvency Resolution Process' was initiated against
'Amrit Feeds Limited' ('Corporate Debtor'). Subsequently, the
promoters of the 'Amrit Feeds Limited' ('Corporate Debtor') reached
settlement with 'Agarwal Industries Pvt. Ltd.' which is one of the
'Operational Creditor', but supressed the fact and did not brought
to the notice of this Appellate Tribunal, that the 'Corporate Debtor'
had received Demand Notice u/s 8(1) from another 'Operational Company Appeal (AT) (Insolvency)No. 678 of 2019 4 Creditor' namely 'S.S. Enterprises' (Respondent herein) who had
filed petition u/s 9 of the Insolvency & Bankruptcy Code, 2016
('I&B' Code) and ordered to file claim before the 'Interim Resolution
Professional'.
12. For the aforesaid reason, the Adjudicating Authority, Kolkata Bench in
exercise of power conferred by Rule 11 of the NCLT Rules, 2016 having restored
the petition u/s 9 to its original file, we find no illegality in the impugned order.
13. In so far hearing of the Appellant 'Amrit Feeds Limited' ('Corporate
Debtor') is concerned, the petition having restored, the Appellant - 'Amrit Feeds
Limited' ('Corporate Debtor') will be given notice by the Adjudicating Authority
before passing any order in the application u/s 9 preferred by 'S.S.
Enterprises'('Operational Creditor').
14. In view of our finding as recorded above, we are not inclined to interfere
with the impugned order. The appeal is accordingly dismissed. No costs.
[Justice S. J. Mukhopadhaya] Chairperson
[Justice A. I. S. Cheema] Member (Judicial)
[Kanthi Narahari] Member (Technical)
ss/sk Company Appeal (AT) (Insolvency)No. 678 of 2019 5
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