Baba Baidnath Spinners Private Limited vs Textile Solutions
- CitationCompany Appeal (AT) (Insolvency) No. 426 of 2023
Ratio decidendi
The rule this decision rests on
Whether a document relied upon by an operational creditor in a Section 9 application is of sufficient worth or probative value is a matter to be considered at the time of deciding the Section 9 application itself, not at the interlocutory stage of discovery and inspection. It is for the operational creditor to file the documents relevant to establishing its case in a Section 9 application, and the adjudicating authority is not bound to entertain a corporate debtor's application for discovery and inspection of documents at that stage. The grant or refusal of discovery and inspection in a Section 9 proceeding, being a matter of the adjudicating authority's discretion in a summary, time-bound process, is not to be interfered with in appeal absent error, and no such error was found in refusing the application.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Baba Baidnath Spinners Pvt. Ltd. ...Appellant
Versus
Textile Solutions ...Respondent
Present: For Appellant: Advocate Manu Aggarwal, Advocate Shubham Budhiraja. For Respondent: Advocate Tishampati Sen, Advocate Anurag Anand.
ORDER
19.04.2023: I.A.No. 1412 of 2023 has been filed praying for condonation
of delay in filing the Appeal.
2. The Order impugned was passed on 07th December, 2022 and the
Appeal has been e-filed on 21st January, 2023. The ground taken in the
Application is that the Legal Team at Ahmedabad contacted the present
counsel on 15th December, 2022 and sometime was taken in studying the
matter thereafter due to intervening winter vacation delay was caused in
preparing the Appeal.
3. Cause shown sufficient, delay in filing the Appeal is condoned.
4. Heard Learned Counsel for the Appellant. This Appeal has been filed
against the Order dated 07.12.2022 by which I.A. No. 827 of 2022 filed by the
Corporate Debtor for discovery and inspection of documents has been rejected. -2-
Section 9 Application was filed by the Operational Creditor where he has relied
on some documents dated 11.02.2020 and 16.03.2021. Application was filed
for inspection and discovery asking for certain documents to be produced
which was objected. The Adjudicating Authority has observed that if any
documents are not filed the consequences will be faced by the Corporate
Debtor, with these observations the Application was not entertained.
5. Learned counsel for the Appellant contends that there was no
arbitration proceeding in accordance with law and the documents could not
be relied.
6. We are of the view that what is worth of the document has to be
considered at the time of considering Section 9 Application and it is for the
Operational Creditor to file relevant documents in support of his case and the
Adjudicating Authority did not commit any error in rejecting the Application
filed by the Appellant for discovery and inspection. Section 9 Application are
application which has to be decided in timely manner and exercise of
discretion by the Adjudicating Authority can not be faulted. We make it clear
that we are not expressing any opinion on the merits of the claim of the parties
or any other aspect of the matter. The Appeal is dismissed.
[Justice Ashok Bhushan] Chairperson
[Mr. Barun Mitra] Member (Technical)
Basant/nn
Company Appeal (AT) (Insolvency) No. 426/2023
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