Enkay Brand Distribution Private ... vs Nike India Private Limited

Enkay Brand Distribution Pvt. Ltd. ...Appellant

Versus

Nike India Pvt. Ltd. ...Respondent

Present: For Appellant: Present but appearance not marked. For Respondent: Mr. Gaurav Mitra, Mr. Ishan Roy, Mr. Himanshu Deora, Mr. Raghav Vig and Ms. Neeharika, Advocates.

ORDER

15.09.2022: Heard learned counsel for the Appellant as well as learned

counsel appearing for the Respondent. This Appeal has been filed against

the order dated 02.09.2022 by which the Adjudicating Authority has

rejected I.A. No. 4201 of 2022 and I.A. No. 4202 of 2022. These I.As. have

been filed under Section 76 of the I&B Code and Section 340 of CRPC in a

pending matter where Section 9 application has been filed by the

Operational Creditor. The Adjudicating Authority while deciding I.A. No.

4201 of 2022 has observed that similar application was withdrawn by the

Corporate Debtor. With regard to I.A. No. 4202 of 2022, Adjudicating

Authority has observed that no sufficient ground has been made out to allow

the application.

Cont'd/-

2

2. Learned counsel for the Appellant challenging the order impugned

contends that the observation recorded in the order that Appellant has

withdrawn earlier application under Section 76 is incorrect. He submits

that application under Section 76 was although filed but it was laying in

default in the Registry. It was not listed when the Court passed the order.

3. Learned counsel for the Respondent submits that Section 9

application which was filed by the Operational Creditor has been heard

thrice once in December,2021 then in March and June, 2022 and the Court

has granted opportunity to both the parties to submit their written

submissions and further affidavits. It is submitted that these applications

have been filed only when Court has made it clear that hearing is complete

and parties may file written submission so that orders may be issued.

4. Learned counsel for the Respondent has also placed before us the

subsequent order dated 13.09.2022 passed by the Adjudicating Authority,

where Adjudicating Authority has passed following order:-

"ORDER

Heard the arguments advanced by the Learned Counsels for both the parties. Arguments in this matter are completed in all respects. Both the Counsels are directed to file afresh written arguments/written submissions within seven days (excluding Saturday, Sunday and Public Holiday) and it is made clear that no further extension of time will be granted for filing the written submissions and if the written submissions are not

Company Appeal (AT) (Insolvency) No. 1132 of 2022 3

filed within the given time, the right to file written submissions will be closed and the order will be reserved. Let this matter be listed after one week regarding the confirmation about the filing of written arguments. List this matter on 29.09.2022."

5. We have considered submissions of learned counsel for the parties

and perused the record.

6. From the submissions which have been placed before us, there is no

dispute that matter has been heard thrice by the Adjudicating Authority but

Section 9 Application could not be decided. Learned counsel for the

Appellant submits that after order was passed on 03.06.2022, the

Operational Creditor was directed to file affidavit which has already been

filed. Learned counsel for the Appellant submits that it is only thereafter

concealment has come which impelled the Corporate Debtor to file

applications.

7. The Respondent Counsel has categorically submitted that order dated

12.01.2022 indicates that when the matter was being heard by the

Adjudicating Authority a statement was made by the Corporate Debtor that

the application which was filed under Section 76 shall be withdrawn.

8. It is true that the application under Section 76 was not listed and was

laying in defect, as has been submitted by learned counsel for the Appellant,

however, the order record the statement of counsel for the Corporate Debtor

that they shall withdraw the application. The Adjudicating Authority has

Company Appeal (AT) (Insolvency) No. 1132 of 2022 4

heard the parties and has to decide finally. The power of the Adjudicating

Authority to take proceeding for prosecution are ample and at any stage the

Adjudicating Authority can direct for the prosecution of either of the parties.

9. We are of the view that filing of applications on 30.08.2022 under

Section 76 of I&B Code and Section 340 of CRPC were only for the purpose

of delaying the proceedings as has been observed by the Adjudicating

Authority. We are of the view that the Adjudicating Authority who is at the

helm of the affairs and made observations after consideration and

conducting the proceeding, due weightage has be given to such observation.

When the Adjudicating Authority has observed that the application has been

filed for delaying the proceedings, we have no reason to take a different view.

We are of the view that there is no merit in the Appeal. Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) Archana/nn

Company Appeal (AT) (Insolvency) No. 1132 of 2022