M/S Wizaman Impex Pvt. Ltd. vs Kedrion Biopharma Inc

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 466 OF 2022

M/S WIZAMAN IMPEX PVT. LTD. APPELLANT

VERSUS

KEDRION BIOPHARMA INC. RESPONDENT

JUDGEMENT

Dinesh Maheshwari, J.

Having regard to the short point involved and the contesting

parties being represented, we have heard learned counsel for the

parties finally at this stage itself.

By way of this appeal, the appellant-company, said to be the

corporate debtor within the meaning of the Insolvency and

Bankruptcy Code, 20161, has questioned the judgment and order dated

15.12.2021, as passed in Company Appeal (AT) Insolvency No. 981 of

2020 whereby, the National Company Law Appellate Tribunal,

Principal Bench, New Delhi2 has set aside the order dated

06.10.2020, as passed by the National Company Law Tribunal, New

Delhi Bench- V3 in CP(IB) 841(ND) of 2020 and has also allowed the

application moved by the applicant (respondent herein) under Signature Not Verified

Section 9 of the Code.

Digitally signed by Rajni Mukhi Date: 2022.02.18 18:07:08 IST Reason:

1 Hereinafter also referred to as ‘the Code 2 Hereinafter also referred to as ‘the Appellate Tribunal’ or ‘the NCLAT’. 3 Hereinafter also referred to as ‘the Adjudicating Authority’ or ‘the NCLT’. 2

The said application under Section 9 of the Code was filed by

the applicant-respondent on 30.06.2020, in its capacity as an

operational creditor of the corporate debtor while claiming, inter

alia, that there had been a distribution agreement whereby, the

corporate debtor was to sell the pharmaceutical products of the

applicant company only until its subsidiary by the name “Kedrion

India” was capable of doing so. Several invoices were raised in

duration and credit notes were also issued. It has been the case of

the applicant-respondent that as regards the debts due, a notice

dated 25.07.2019 was sent, demanding a sum of USD 9,01,000 but, the

said demand notice was returned undelivered. Thereafter, on

07.08.2019, another demand notice was sent at the new registered

office address of the corporate debtor. The applicant alleged that

on 17.08.2019, the corporate debtor replied to the said demand

notice disputing the admitted and acknowledged the dues payable,

with reference to its pending dispute with the Directorate of

Health Services, Maharashtra with regard to the supply of short

shelf-life products. The applicant contended that the corporate

debtor had committed a default within the meaning of Section 3(12)

of the Code and the outstanding amount qualified as an operational

debt within the meaning of Section 3(11) read with Section 5(21) of

the Code.

In its order dated 06.10.2020, the NCLT considered the

documents referred by the applicant in support of its contention

that there had been acknowledgment of debt and thereby the period

of limitation would shift from the date of acknowledgment. The NCLT

observed that the document dated 15.12.2017 was a credit memo, 3

issued by the applicant and not by the respondent and thus, it

could not be treated as an acknowledgment of debt. As regards

document dated 07.07.2016 carrying the signatures of the Director

of the Company and addressed to the Bank regarding payment of

pending invoices, the NCLT observed that even if the said letter

was treated as an acknowledgment of debt, the limitation would run

from its date, i.e., 07.07.2016. The NCLT further considered

another letter dated 02.02.2017 and observed that even if the said

document was taken as an acknowledgement of debt, the limitation

would run from 02.02.2017. Hence, the NCLT came to the conclusion

that, viewed from any angle, the application filed on 30.06.2020

was beyond the period of three years in terms of Article 137 of the

Limitation Act, 1963. Thus, the NCLT proceeded to reject the

application so made by the respondent.

It appears from the perusal of the record that the applicant-

respondent, in appeal against the aforesaid order of the NCLT,

moved an application (I.A. No. 2685 of 2020) before the Appellate

Tribunal and thereby, sought permission to produce the exchanges of

e-mails from 03.11.2017 to 11.01.2019 with respect to the

propositions for settlement of dues. Admittedly, the said documents

were not on record before the NCLT.

However, the Appellate Tribunal found it just and proper to

grant permission to the applicant (appellant before the NCLAT) to

place such additional documents on record; but accorded such

permission only in the impugned order dated 15.12.2021. Thereafter,

on the basis of the said additional documents taken on record, the

Appellate Tribunal came to the conclusion that the corporate debtor 4

had admitted its liability and had shown its readiness to make

payment as also to revise the settlement proposal. All such

suggestions, admissions and offers evidenced by the said e-mails

were taken by the Appellate Tribunal as acknowledgement by the

corporate debtor within time and thus, it was held that the

Adjudicating Authority erred in holding the applicant’s claim to be

barred by time.

Though several contentions have been urged by the learned

counsel for contesting parties as regards effect of the said

documents placed before the Appellate Tribunal by way of I.A. No.

2685 of 2020 but, we are clearly of the view that the impugned

order allowing the appeal and even admitting the application under

Section 9 of the Code cannot be sustained on a short point that the

said additional documents were taken on record only while finally

deciding the appeal and without adequate opportunity of response to

the corporate debtor. However, at the same time, due consideration

of the said documents also appears requisite and the documents

i.e., the said e-mails, cannot be removed out of consideration only

because they were not on record before NCLT.

For what has been discussed and observed hereinabove, in our

view, the appropriate course in this matter would be to set aside

the impugned order dated 15.12.2021 passed by NCLAT to the extent

it has allowed the application under Section 9 of the Code filed by

the applicant-respondent but while retaining the other part of the

impugned order taking the documents filed with I.A. No. 2685 of

2020 on record. After taking the said documents on record, for the

appropriate process of adjudication in the matter, it is also 5

considered just and proper that the order dated 06.10.2020 passed

by NCLT be also set aside and the NCLT be directed to re-consider

the application under Section 9 of the Code as filed by the

applicant-respondent while taking into consideration the additional

documents now taken on record and at the same time, while extending

an adequate opportunity of hearing to the corporate debtor.

We may, of course, observe that at the outset Mr. Nakul Dewan,

learned senior counsel appearing for the respondent has attempted

to question the maintainability of this appeal at the instance of

the corporate debtor because NCLAT had, by the impugned order,

allowed the application under Section 9 of the Code. We have

overruled such objection for the simple reason that the said

application had been rejected by NCLT and was allowed only by way

of impugned order and until the said order was examined by this

Court and attained finality, the right and locus of the corporate

debtor to challenge the correctness thereof, could not have been

denied. In any case, in the present matter, the impugned order was

passed on 15.12.2021 and admittedly, no other steps had been taken

in the matter including that of appointment of resolution

professional. In the given set of facts, we overruled the

objections raised by the learned senior counsel for the respondent.

Accordingly, this appeal is allowed to the extent and in the

manner indicated hereinabove. The application under Section 9 of

the Code in CP(IB) 841(ND) of 2020 stands restored for re-

consideration by the Adjudicating Authority keeping in view the

observations and requirements foregoing.

6

It goes without saying that we have not pronounced on the

merits of the case either way and not even on the evidentiary value

and effect of the documents in question. All the aspects are left

open for examination by the Adjudicating Authority in accordance

with law.

Having regard to the circumstances of the case and the fact

that the application under Section 9 of the Code was filed way back

on 30.06.2020, we would expect the Adjudicating Authority to assign

a reasonable priority to the matter and to proceed expeditiously.

………………………………………….J (DINESH MAHESHWARI)

………………………………………….J (VIKRAM NATH)

NEW DELHI;

FEBRUARY 7,2022.