M/S Kailash Devbuild India Private ... vs M/S Inox Wind Infrastructure Services ...

IN THE MATTER OF: Kailash Devbuild (India) Pvt. Ltd. ...Appellant

Versus

Inox Wind Infrastructure Services Ltd. ...Respondent Present: For Appellant: Mr. Abhijeet Shrivastava, Advocate.

For Respondent: Mr. Pratik Thakkar, Advocate

ORDER

(Virtual Mode)

14.02.2022: Heard learned counsel for the Appellant as well as learned

counsel appearing for the Respondent. This Appeal has been filed against

order dated 17.09.2020 passed by the Adjudicating Authority (National

Company Law Tribunal), Ahmedabad Bench, Ahmedabad, Court No. 2 by

which the Application filed by the Appellant under Section 9 of the Insolvency

and Bankruptcy Code, 2016 (hereinafter referred to as 'Code') has been

dismissed as not maintainable.

2. A notice dated 05.01.2019 in Form IV under Section 8 was issued by

the Appellant which was signed by one Shri Kailash Shukla who was the

Managing Director of the Appellant. Reply to the said notice was given by the

Respondent - Corporate Debtor on 22.02.2019 which has been placed on

record at page 284 of the Appeal. The Reply was addressed to "M/s Kailash

Devbuild (India) Private Limited Through: Mr. Kailash Shukla, Managing

Director, 817, Hatilal, Jabalpur - 482001, Madhya Pradesh". It is after the

Reply to the notice, Application under Section 9 was filed by the Appellant -2-

which came to be rejected by the impugned order for reasons recorded in para

8 of the judgment, which is to the following effect:

"On perusal of the record it is found that the demand

notice dated 05.01.2019 (page 257-267), which is a

pre-requisite under section 8 of the Insolvency &

Bankruptcy Code, 2016 for filing the petition under

section 9, is signed and issued by one Mr. Kailash

Shukla, said to be Director of the applicant company

whereas the Board Resolution authorising Mr.

Kailash Shukla is of 14.02.2019. That means, at the

time of issuing the demand notice dated 05.01.2019,

Mr. Kailash Shukla had no authority to sign and issue

such notice. Moreover, the Board Resolution also do

not specifically empower Mr. Bhanu Shukla to initiate

CIRP against the corporate debtor. Admittedly,

Director of a company can issue the notice on behalf

of the client but due authorisation is required by

passing resolution in duly convened Board Meeting

and in the instant case the demand notice was issued

prior to passing the Board Resolution."

3. Learned counsel for the Appellant submits that Shri Kailash Shukla,

who has signed the demand notice dated 05.01.2019 was the Managing

Director of the Appellant and was fully competent to issue the notice under

Section 8. It is submitted that Board Resolution dated 14.02.2019 which has

Company Appeal (AT) (Insolvency) No. 1014 of 2020 -3-

been referred to in the impugned order was for filing application under Section

9 in which one Mr. Bhanu Shukla was authorised. The Board Resolution is

referred to is at page 283 of the Appeal which provides that Mr. Bhanu Shukla

is authorised to execute and deliver such letters of appointment, powers of

attorney and such other documents of the company as may be appropriate to

carrying out the intent of the resolutions.

4. Learned counsel for the Respondent submits that the Board Resolution

was issued on 14.02.2019 whereas notice was issued under Section 8 on

05.01.2019 signed by Mr. Kailash Shukla.

5. We have considered submissions of learned counsel for the parties and

perused the record.

6. The Section 8 notice which has been brought on record was signed by

Mr. Kailash Shukla who was the Managing Director of the Appellant Company

with regard to this there is no dispute since Reply to the demand notice was

sent to the Appellant through 'Mr. Kailash Shukla, Managing Director' as

noted above. The application under Section 9 is filed by Mr. Bhanu Shukla

who was authorised by Board Resolution dated 14.02.2019.

7. Learned Adjudicating Authority has observed that at the time of issuing

the demand notice on 05.01.2019, Mr. Kailash Shukla has no authority to

sign and issue such notice. The above observation cannot be approved. The

Managing Director of the Applicant was fully authorised to issue demand

notice under Section 8. We, thus, do not approve the reason given for rejecting

application under Section 9 as there is no dispute that notice under Section 8

Company Appeal (AT) (Insolvency) No. 1014 of 2020 -4-

was signed by Mr. Kailash Shukla who was Managing Director of the

Applicant. Moreso, when application under Section 9 was filed by the person

who was authorised by Board Resolution dated 14.02.2019, there was no

occasion for the Adjudicating Authority to reject the application on aforesaid

grounds.

8. We, thus, are of the view that impugned order dated 17.09.2020

deserves to be set aside and is hereby set aside. In result, impugned order is

set aside and application under Section 9 is revived before the Adjudicating

Authority, which may now be considered and decided by the Adjudicating

Authority in accordance with law.

9. We make it clear that we have not entered into the merits of the case

and we have not expressed any opinion on the merits. It is for the Adjudicating

Authority to consider all questions in accordance with law. In view of the fact

that application is of the year 2019, the Adjudicating Authority shall make all

endeavours to dispose of the matter as early as possible. The Appeal is allowed.

[Justice Ashok Bhushan] Chairperson

[Dr. Ashok Kumar Mishra] Member (Technical) Archana/nn

Company Appeal (AT) (Insolvency) No. 1014 of 2020