M Goutham Chand Bafna & Anr vs Hi-Style India (P) Ltd
- CitationCompany Appeal (AT) (Insolvency) No. 663 of 2018
Ratio decidendi
The rule this decision rests on
In an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, the Adjudicating Authority is confined to determining whether there is a debt, whether there is a default, and whether a pre-existing dispute exists; the resolution process is not a litigation, money claim or suit, and the Adjudicating Authority is therefore not empowered to decide whether the subject matter of the application is barred by res judicata. A finding of res judicata made by the Adjudicating Authority in a Section 9 proceeding, being beyond its jurisdiction, is set aside, leaving the appellant free to pursue the issue before an appropriate forum uninfluenced by that finding, while the substantive part of the order rejecting the application on the ground of pre-existing dispute is left undisturbed.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
M. Goutham Chand Bafna & Anr. ...Appellants
Versus
M/s. Hi-Style India (P) Ltd. ...Respondent
Present: For Appellant : Mr. Gautam Swarup, Advocate
For Respondent : Mr. Avinash Wadhwani and Mr. Balaji Gopalan, Advocates
ORDER
28.05.2019 Learned counsel appearing on behalf of the Appellants
submits that the application u/s 9 of the 'Insolvency and Bankruptcy Code,
2016' has been rejected on the ground of the 'existing dispute' but the finding
made therein is further that the subject matter is hit by res judicata which is
uncalled for.
2. On hearing the learned counsel for the parties, we are of the view that the
Adjudicating Authority (National Company Law Tribunal), Division Bench,
Chennai was only supposed to consider the question as to whether there is a
'debt' and 'default' and whether there is a 'pre-existing dispute'. The resolution
process not being a litigation or money claim or suit, the Adjudicating Authority
was not supposed to decide whether the subject matter was hit by res judicata
or not.
3. For the reasons aforesaid, while we are not disturbing substantive part of
the impugned order dated 4th September, 2018 passed by the Adjudicating -2-
Authority, we set aside the part of the impugned order of the Adjudicating
Authority where it is held that subject matter is hit by res judicata. It will be
open to the Appellant to move before any appropriate Forum or any Authority on
that count for appropriate relief uninfluenced by the order passed by the
Adjudicating Authority having not decided the same.
The appeal stands disposed of with aforesaid observations.
[Justice S.J. Mukhopadhaya] Chairperson
[ Justice A.I.S. Cheema ] Member (Judicial)
[ Kanthi Narahari ] Member (Technical) /ns/sk
Company Appeal (AT) (Insolvency) No. 663 of 2018
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