Gm Lingaraju vs Gurudatt Sugars Marketing

For Respondents : Ms. Sonam Gupta and Mr. Manu Mishra, Advocate

ORDER

10.09.2018 This appeal has been preferred by the appellant (Shareholder) of

G.M. Sugar & Energy Ltd. (Corporate Debtor) against order dated 15th June,

2018 passed by the Adjudicating Authority (National Company Law Tribunal),

Bengaluru Bench whereby the application under Section 9 of the Insolvency and

Bankruptcy Code, 2016 (hereinafter referred to as the, "I&B Code') preferred by

the respondent (Operational Creditor) has been admitted, order of moratorium

has been passed and the 'Interim Resolution Professional' has been appointed.

2. Learned counsel appearing on behalf of the appellant submits that there

is an 'existence of dispute' since prior to the issuance of demand notice under

sub-section (1) of Section 8 of the I&B Code. The demand notice was issued on

20th November, 2017 but much before the same by letter dated 10th February,

2017 (Annexure A-7) M/s. Kejriwal Sugar Agencies Pvt. Ltd., which was the 2

broker between the 'Operational Creditor' and the 'Corporate Debtor', informed

about cancellation of the agreement. In the said letter, it was mentioned that

due to some unforeseen reasons, M/s. Shri Gurudatta Sugars Marketing Private

Limited, Mumbai (Operational Creditor) does not want to receive supply of sugar.

3. According to the learned counsel for the appellant the Adjudicating

Authority has failed to notice the existence of dispute. It is also informed that

the admitted dues have already been paid to the respondent pursuant to

settlement with the 'Operational Creditor'.

4. Learned counsel appearing on behalf of the respondent (Operational

Creditor) accepts that M/s. Kejriwal Sugar Agencies Pvt. Ltd. was the broker

between the 'Financial Creditor' and the 'Corporate Debtor'. She also accepts

that the amount as was due has also been paid.

5. Having heard the learned counsel for the parties and taking into

consideration the fact that there is an 'existence of dispute' prior to issuance of

demand notice, we hold that the petition under Section 9 was not maintainable.

The impugned order dated 15th June, 2018 is accordingly set aside.

6. In effect, order (s) passed by Ld. Adjudicating Authority appointing any

'Interim Resolution Professional', declaring moratorium, freezing the account of

'Corporate Debtor' and all other order (s) passed pursuant to impugned order

and action taken by the 'Resolution Professional', including the advertisement

published in the newspaper calling for applications as also all such orders and

actions are declared illegal and are set aside. The application preferred by

Respondent under Section 9 of the I&B Code is dismissed. Learned Adjudicating

Authority will now close the proceeding. The 'Corporate Debtor' company is

Company Appeal (AT) (Insolvency) No. 385 of 2018 3

released from all the rigour of law and is allowed to function independently

through its Board of Directors from immediate effect.

7. Learned Adjudicating Authority will fix the fee of 'Resolution Professional',

and the 'Corporate Debtor' will pay the fees of the 'Resolution Professional', for

the period he has functioned. The appeal is allowed with aforesaid observation

and direction. However, in the facts and circumstances of the case, there shall

be no order as to cost.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice A.I.S. Cheema ] Member (Judicial)

/ns/gc/

Company Appeal (AT) (Insolvency) No. 385 of 2018