B.E Billimoria And Company Ltd vs Vikram Ispat Udyog

[Arising out of Order dated 25th January, 2019 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench in CP (IB)- 1544(MB)/2017]

IN THE MATTER OF:

M/s B.E. Billimoria and Company Ltd. ....Appellant

Vs

M/s Vikram Ispat Udyog ....Respondent

Present: Mr. Dhaval Deshpande, Advocate for Appellant. Mr. Iswar Mohapatra, Advocate.

[11th February, 2020]

JARAT KUMAR JAIN, J.

Appellant - 'B.E. Billimoria and Company Ltd.' filed an appeal against the

order passed by the Adjudicating Authority dated 25.01.2019 in CP (IB)-

1544(MB)/2017.

2. Respondent had supplied Tiscon TMT Steel Coil/ Bar to the Appellant

during period of 25.08.2015 to 19.12.2015 worth Rs. 2,16,73,188/- against

which the Appellant had made payment of Rs. 1,17,93,537/- leaving an amount

of Rs. 98,79,591/-. On 19.08.2017 Respondent through its Advocate sent a

Demand Notice purportedly in Form 4 under Rule 5 of I&B Code. The Appellant -2-

replied the Demand Notice. Respondent being dissatisfied with the reply of the

appellant, filed an application under Section 9 of I&B to initiate Corporate

Insolvency Resolution Process. Appellant appeared before the Adjudicating

Authority. At the request of parties, Adjudicating Authority granted some

adjournments for settlement.

3. On 25.01.2019 both the parties informed the Adjudicating Authority about

the settlement and payment schedule has been accepted by the Respondent. At

that time a question was raised by the Respondent that the Appellant had not

made any provision for the payment of interest for the period of delay. Then both

the parties agreed that whatever rate of interest decided by the Adjudicating

Authority shall be agreeable to them. It is also informed that there is a clause of

payment of 24% interest in case of delay.

4. The Adjudicating Authority after taking into consideration the facts of this

case directed the Appellant to pay interest @ 12% for the period of delay in

payment. Adjudicating Authority has also given liberty to the Respondent that

in case of default or defiance on the part of the Appellant in payment of balance

amount as per the terms of schedule agreed upon, Respondent can inform the

Adjudicating Authority for taking requisite action against the Appellant as

prescribed under I&B Code.

5. Being aggrieved with this order, Appellant has filed this appeal.

6. Learned counsel for the appellant drawn our attention towards the order

sheets and submitted that the Adjudicating Authority has constantly monitored

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the progress of the recovery of amount and also about the settlement between

the parties.

7. Learned counsel for the appellant further submitted that the I&B code is

not a code for the Adjudicating Authority to monitored settlement between the

parties and grant interest on outstanding amount and furthermore, the

proceedings under the I&B code are not recovery proceedings. It is not the

intention of legislature under the code that the Adjudicating Authority should

determine the rate of interest and grant time to the Corporate Debtor to pay the

amount as per the directions.

8. It is also submitted that the Adjudicating Authority may within the period

of 14 days of the receipt of the application under Section 9 of the I&B code, either

admit or reject the application. Therefore, the order passed by the Adjudicating

Authority for granting interest @ 12% per annum for delayed payment is beyond

the jurisdiction hence it be set aside.

9. On the other hand, learned counsel for the Respondent supports the

Impugned Order.

10. We have considered the submissions.

11. It is admitted fact that the parties amicably settled their dispute and as

per the Terms of the Settlement the parties have filed payment schedule before

the Adjudicating Authority. We are agree that proceedings under the I&B Code

are not recovery proceedings.

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12. However, when the parties have amicably settled their dispute and both

the parties were agreeable and communicated the Adjudicating Authority to

decide the rate of interest. It was also informed that there was a clause of

payment of 24% interest in case of delay. Hence, the Adjudicating Authority

exercising the power under Rule 11 of National Company Law Tribunal rules,

2016 which empowers the Tribunal to make such orders as may be necessary

for meeting the ends of justice or to prevent abuse of the process of the Tribunal,

directed the Appellant to pay interest @ 12% only for the period of delay in

payment. Thus, the order is justifiable and agreeable.

13. With the above discussion, we are of the view that the Impugned Order

passed by the Adjudicating Authority is well within the jurisdiction and we find

no ground to interfere with this order, thus, the appeal is dismissed. However,

no orders as to costs.

(Justice Jarat Kumar Jain) Member (Judicial)

(Mr. Balvinder Singh) Member (Technical)

(Dr. Ashok Kumar Mishra) Member (Technical) NEW DELHI

SA

Company Appeal (AT) (Ins) No. 477 of 2019