Kishore Shanker Signapurkar vs Prime Soles A Sole Proprietorship ...

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NATIONAL COMPANY LAW APPELLATE TRIBUNAL, Principal Bench, New Delhi Company Appeal (AT) (Insolvency) No. 739 of 2018

IN THE MATTER OF: Kishore Shanker Signapurkar ...Appellant Vs. Prime Soles & Anr. ....Respondents Present: For Appellant: Mr. Manu Yadav, Advocate

For Respondent: None

ORDER

Per : Justice Rakesh Kumar Jain: (Oral)

20.02.2023: This appeal is directed against the order dated 01.08.2018,

passed by the 'Adjudicating Authority' (National Company Law Tribunal,

Mumbai Bench), by which an application bearing No. CP No. 273/I&BP/2018

filed by 'Operational Creditor' (Respondent No.1) under Section 9 of the

'Insolvency and Bankruptcy Code, 2016' (in short 'Code'), for resolution of an

amount of Rs. 75,54,594/- against the 'Appellant' (Corporate Debtor), has been

admitted and 'Corporate Insolvency Resolution Process' (CIRP) has been

initiated.

2. Brief facts of the case are that the 'Operational Creditor' used to supply

PU Soles to the 'Corporate Debtor' from 2012 onwards and there was a balance

of Rs. 75,54,594/- as on 05.08.2017. The 'Operational Creditor' served a

'Demand Notice' dated 08.01.2018 in terms of Section 8 of the Code demanding

the aforesaid amount with interest @ 18% p.a. to which the Corporate Debtor

filed a reply dated 08.02.2018 and denied its liability, alleging that there was a

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'commercial understanding' between the 'Operational Creditor' and 'Corporate

Debtor' that one 'M/s. Gulshan International Private Limited' (hereinafter

referred as 'Gulshan') shall supply goods to the Corporate Debtor through the

Operational Creditor and 'Gulshan' shall raise invoices on the Corporate Debtor

adding transport charges and fees pertaining to the Operational Creditor, the

Corporate Debtor would pay to 'Gulshan' and 'Gulshan' would pay to the

Operational Creditor for the services in transporting the goods and fees. It was

also stated that 'Gulshan' was paid by the Corporate Debtor for the goods

received and, therefore, the Corporate Debtor has paid the entire amount for the

goods even twice. The Corporate Debtor has also filed reply to the application

under Section 9 and denied its liability.

3. The Adjudicating Authority while referring to the case set up by both the

parties in their application, reply & rejoinder, came to a conclusion that there is

no doubt about the fact that the Operational Creditor had supplied the goods to

the Corporate Debtor and the payment has not been made, therefore, it was a fit

case for the purpose of invoking Section 9 of the Code for the initiation of CIRP

and to impose moratorium.

4. Aggrieved against the order of admission, the present appeal has been

filed. No one has put in appearance on behalf of the Respondent. As a matter of

fact, the Respondent is not appearing in this case from the last two - three dates

which is apparent from the Zimini Orders. However, we have heard Counsel for

the Appellant.

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5. Counsel for the Appellant has vehemently argued that the order of

admission is patently illegal as there was a 'pre-existing dispute' between the

parties. However, Counsel for the Appellant has been very fair and candid with

us in admitting that no such plea was ever raised by the Appellant before the

Adjudicating Authority and, therefore, no such finding has been recorded as to

whether there was a pre-existing dispute or not.

6. Counsel for the Appellant has though laboured very hard in taking us to

various invoices and the statements of accounts, available on record, but the

fact of the matter is that since no dispute was raised by the Appellant at the time

when the matter was heard by the 'Adjudicating Authority' specifically in regard

to the existence of a dispute which is a defence available to the Corporate Debtor

in a case of Section 9 of the Code and precisely for that reason the legislature

has provided a demand notice in the scheme of Section 9 unlike Section 7 of the

Code that in case there is a pre-existing dispute between the parties, the

Adjudicating Authority shall refrain from admitting the application, filed under

Section 9 of the Code which may cause the initiation of the CIRP proceedings

and ultimately the interest of the Corporate Debtor may be jeopardized. Since

the question of there being existence of dispute is a pure question of fact which

has not been raised before the Adjudicating Authority, we wonder as to whether

the same can be raised before the Appellate Authority.

7. Therefore, in view of the facts and circumstances of the case, once the

Appellant has not raised the issue of existence of pre-existing dispute

deliberately before the Adjudicating Authority, it appears that it was satisfied

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that there was no such pre-existing dispute between the parties and, therefore,

it cannot be allowed to be raised for the first time before this 'Appellate Tribunal'.

No other point has been raised.

8. For the aforesaid reasons, we do not find any merit in the present case and

the same is hereby dismissed. No order as to costs.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Naresh Salecha] Member (Technical) Raushan/RR

Company Appeal (AT) (Ins) No. 739 of 2018