Janmejaya Mahapatra vs Flsmidth Pvt. Ltd. & Ors

Janmejaya Mahapatra ...Appellant

Versus

FLSmidth Pvt. Ltd. & Ors. ...Respondents

Present: For Appellant : Mr. Arjun Asthana and Ms. Sreenita Ghosh, Advocates

For Respondents : Mr. Raju Ramachandran, Senior Advocate with Mr. Vaijayant Paliwal and Ms. Jasveen Kaur, Advocates for Respondent No. 4

ORDER

05.09.2019 This appeal has been preferred by 'Janmejaya Mahapatra',

Director of 'Jhabua Power Limited' (Corporate Debtor) against order dated 27th

March, 2019 passed by the Adjudicating Authority (National Company Law

Tribunal), Kolkata Bench, Kolkata admitting the application under Section 9 of

the 'Insolvency and Bankruptcy Code, 2019' (for short, the I&B Code) filed by

'FLSmidth Private Limited' (Operational Creditor).

When the matter was taken up on 5th April, 2019, learned counsel for the

Appellant submitted that the 'Financial Creditor' had taken over the

management of the 'Corporate Debtor' and after taking over the Company, it is

in profit. The 'Settlement Agreement' dated 8th February, 2018 was made but it

could not be given effect as the financial control is with the 'Financial Creditors' 2

(Committee of Lenders) and not with the Board of Directors. It was submitted

that the Adjudicating Authority without taking into consideration the aforesaid

fact passed the impugned order on 27th March, 2019. However, on 5th April,

2019 while this Appellate Tribunal recorded the aforesaid submissions, this

Appellate Tribunal observed that it is not clear as to who ordered to pay the

amount pursuant to which Rs.5 Crores had been paid on 21st February, 2018,

though the settlement reached on 8th February, 2018. Later on, learned counsel

for the Appellant, who intended to settle the matter with the respondent,

informed that no settlement has been reached. In the aforesaid circumstances,

learned counsel for the Appellant addressed to this Appellate Tribunal on merit

and took plea as was taken before the Adjudicating Authority that there is no

default. However, the record shows that there is a 'debt' payable by 'Corporate

Debtor' to 'FLSmidth Private Limited' (Operational Creditor). The management

of the 'Corporate Debtor' have not taken plea before the Adjudicating Authority

which was required to be raised while the application under Section 9 of the I&B

Code was considered. Record suggests that letters of award were issued one on

9th August, 2011, followed by memorandum of understanding and 'terms of

settlement' reached on 8th February, 2018. It is also not in dispute that the

'Operational Creditor' issued Demand Notice under Section 8(1) of the I & B Code

on 12th of September, 2017 and in spite of receipt of Demand Notice, the

Corporate Debtor failed to pay the 'debt' within 10 days and thereby the

'Corporate Debtor' defaulted to make payments. The application under Section

9 otherwise being complete, it was admitted. We find no reason to interfere with

the impugned order dated 27th March, 2019.

Company Appeal (AT) (Insolvency) No. 344 of 2019 AND I.A. No. 1832 of 2019 3

In absence of any reason, the appeal is dismissed. No costs.

[Justice S.J. Mukhopadhaya] Chairperson

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

[ Kanthi Narahari ] Member (Technical) /ns/gc

Company Appeal (AT) (Insolvency) No. 344 of 2019 AND I.A. No. 1832 of 2019