Global Infonet Distribution Pvt Ltd vs Ikyam Solutions Pvt Ltd
- CitationCompany Appeal (AT) (Insolvency) No. 108 of 2019
Ratio decidendi
The rule this decision rests on
A reply to a demand notice under Section 8(1) of the Insolvency and Bankruptcy Code, 2016 does not by itself establish a pre-existing dispute; a bare statement in such a reply denying liability, unsupported by any other evidence on record, cannot be treated as proof that the debt has been paid or disputed. Where the Adjudicating Authority dismisses an application under Section 9 on the basis of such a reply without notice to the Corporate Debtor and without examining whether any pre-existing dispute is in fact shown, the order is liable to be set aside and the matter remitted for hearing on merits after notice to the parties.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
M/s. Global Infonet Distribution Pvt. Ltd. .... Appellant
Vs
M/s. Ikyam Solutions Pvt. Ltd. .... Respondent
Present: For Appellant: Appeared but attendance not marked.
For Respondent: Mr. Rajeev Sharma and Mr. Kunal Sharma, Advocates for Respondent.
ORDER
09.05.2019 The Appellant M/s. Global Infonet Distribution Private Limited issued Demand Notice under Section 8(1) of the Insolvency & Bankruptcy Code, 2016 (I&B Code) alleging default of Rs.10,01,117/- and also claimed interest @ 24% per annum. The Respondent M/s. Ikyam Solutions Pvt. Ltd. (Corporate Debtor) replied opposing the claim by reply dated 19th May, 2018. The Adjudicating Authority (National Company Law Tribunal), Bengaluru Bench without notice to the Corporate Debtor, based on the reply under Section 8(2) dated 19th May, 2018 given by the 'Corporate Debtor', which was enclosed by the Appellant, dismissed the application by impugned order dated 17th December, 2018 on the ground that no amount is payable.
2. Learned Counsel appearing on behalf of the Appellant submitted that there is no pre-existing dispute and the reply under Section 8(2) dated 19th May, 2018 cannot be treated to be a pre-existing dispute, or can be taken into consideration to hold that the total amount has been paid.
Page 1 of 2 3. The Respondent has appeared and filed reply affidavit. However, we find that there is nothing on the record to suggest that there is pre-existing dispute.
4. Learned Counsel for the Appellant rightly submitted that the reply to the Demand Notice dated under Section 8(1) cannot be termed to be an existence of dispute merely on the basis of statements made therein and in the absence of any other evidence, it cannot be held that the amount has been paid. The Adjudicating Authority has failed to consider the same.
5. We have no other option, but to set-aside the impugned order dated 17th December, 2018. The impugned order is set-aside. The case is remitted back to the Adjudicating Authority (National Company Law Tribunal) Bengaluru Bench, which will give notice to the parties and after hearing, decide the matter on merit. The Appeal is accordingly disposed of.
6. In the meantime, it will be open to the parties to settle the matter.
[Justice S. J. Mukhopadhaya] Chairperson
[Justice A.I.S. Cheema] Member (Judicial)
[Kanthi Narahari] Member (Technical)
Ash/GC Company Appeal (AT) (Insolvency) No. 108 of 2019 Page 2 of 2
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