Dolphin Offshore Enterprises (India) ... vs Instrumentation Ltd. & Anr

Dolphin Offshore Enterprises (India) Ltd. ...Appellant Vs. Instrumentation Ltd. & Anr. ...Respondents

Present: For Appellant: - Mr. Sharad Tyagi, Advocate For Respondents: - Mr. Jayant Mehta and Mr. Rakesh Wadhwa, Advocates for 1st Respondent. Mr. S.K. Mohanty, Senior Panel Central Government Counsel for 2nd Respondent.

ORDER

12.03.2018 ─ The Appellant preferred an application under Section 9

of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as

"I&B Code") for initiation of 'Corporate Insolvency Resolution Process'

against Respondent- Instrumentation Limited ('Corporate Debtor'). The

Adjudicating Authority (National Company Law Tribunal), Principal

Bench, New Delhi, by judgment dated 17th October, 2017, dismissed the

application on the ground of 'existence of dispute'.

2. Learned counsel appearing on behalf of the Appellant submitted

that the 'Corporate Debtor' has not disputed the liability of payment of

dues except the contingent liabilities such as VAT/Contract Tax/Sales

Tax, which cannot be a ground to dismiss the application under Section

Company Appeal (AT) (Insolvency) No. 282 of 2017 2

9 of the 'I&B Code'. It is submitted that there is a debt and default of

the amount payable by Respondents to the Appellant.

3. It is submitted that the Respondent- 'Corporate Debtor' is

withholding the payment for the works already executed by the

Appellant and for which the 'Corporate Debtor' has already received

payment from ONGC. It is submitted that the non-payment of the dues

to the Appellant is not only the interest but are being levied for other

financial obligations to the Appellant, though work has been executed

within the time.

4. According to learned counsel for the Appellant, there is no dispute

with regard to the timely execution of the projects or the quality of

execution of the tax liability which the Respondents claimed cannot be

construed a dispute qua the Appellant ('Financial Creditor') and the

'Corporate Debtor'.

5. Learned counsel appearing on behalf of the 1st Respondent

submits that first contract executed by the Appellant was inclusive of

tax and the Appellant having not paid the same and has disputed, it will

amount to 'existence of dispute'.

6. Further, according to counsel for the 'Corporate Debtor', while the

Appellant has made claim of Rs. 4.90 crores, a counter claim of Rs. 7.5

crores has been raised by the 'Corporate Debtor' with regard to the same

very work on account of tax liability.

Company Appeal (AT) (Insolvency) No. 282 of 2017 3

7. Learned counsel appearing on behalf of the 2nd Respondent-

Central Government, adopts the arguments as raised on behalf of the

1st Respondent and submitted that the Appellant is liable to pay the tax

which the 'Corporate Debtor' is entitled to recover and then pay it to the

2nd Respondent.

8. Having heard learned counsel for the parties, we find that there is

an 'existence of dispute'. For the said reason, we are not inclined to

interfere with the impugned order dated 17th October, 2017 passed in

Company Petition No. (IB)-157 (PB)/2017. In absence of any merit, the

appeal is dismissed. However, in the facts and circumstances of the

case, there shall be no order as to cost

(Justice S.J. Mukhopadhaya) Chairperson

(Justice Bansi Lal Bhat) Member(Judicial) Ar/uk

Company Appeal (AT) (Insolvency) No. 282 of 2017