Canara Bank vs Sri Chandramoulishvar Spinning Mills ...

03.08.2018 This appeal has been preferred by the Canara Bank against

the order dated 7th June, 2018 passed by the Adjudicating Authority (National

Company law Tribunal), Division Bench, Chennai in CP/588/(IB)/CB/2018

whereby and whereunder the application preferred by M/s. Sri Karthic

Polypacks (Operational Creditor) under Section 9 of the Insolvency and

Bankruptcy Code, 2016 (hereinafter referred to as the, "I&B Code') against M/s.

Sri Chandra Moulishvar Spinning Mills Private Limited (Corporate Debtor) has

been admitted, order of moratorium has been passed and the name of the

'Interim Resolution Professional' has been called for.

Learned counsel for the appellant (Financial Creditor) submits that they

had taken possession of certain land of the 'Corporate Debtor' and for the said

reason the 'Corporate Debtor' in collusion with 'Operational Creditor' get the

application under Section 9 of the I&B Code filed. However, in absence of any

evidence such submission cannot be accepted. Further, the Adjudicating 2

Authority also could have not decided such issue of collusion which can be

decided by the Court of competent jurisdiction.

It was then contended that the Demand Notice was not proper but that

cannot be a ground as we find that the Demand Notice dated 5th April, 2018 was

issued as per the provisions of sub-section(1) of Section 8 of the I&B Code calling

upon the 'Corporate Debtor' for payment of the outstanding dues of

Rs.7,17,626/- along with 24% interest as on 21st June, 2017.

At this stage, learned counsel for the appellant submits that the Demand

Notice was not served on the 'Corporate Debtor', but such submission cannot be

accepted because the 'Corporate Debtor' has not raised any such objection that

it has not served on it and has also not disputed the claim and the default.

As per decision of the "Innoventive Industries Ltd. v. ICICI Bank - (2018) 1

SCC 407" if the application under Section 9 is complete and there is no 'existence

of dispute' and there is a 'debt' and 'default' and then the Adjudicating Authority

is bound to admit the application. The appellant is aggrieved as it has already

taken steps under SARFAESI Act, 2002 but such action cannot continue as the

I&B code will prevail over SARFAESI Act. In absence of any merit, the appeal is

dismissed. No cost.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial)

/ns/uk/

Company Appeal (AT) (Insolvency) No. 429 of 2018