Mitcon Consultancy & Engineering ... vs Vitthal Corporation Ltd

Mitcon Consultancy & Engineering Services Ltd. ...Appellant

Vs.

Vitthal`` Corporation Ltd. ...Respondent

Present: For Appellant: - Mr. Rajiv S.Roy, Mr. Avrojyoti Chatterjee, Ms. Jayasree Saha and Mr. Abhijit Roy, Advocates

For Respondent:-Mr. Nitin, Advocate

ORDER

05.07.2018─ This appeal has been preferred by M/s Mitcon Consultancy

& Engineering Services Limited (Operational Creditor) against order dated 15th

February 2018 passed by the Adjudicating Authority (National Company Law

Tribunal), Mumbai Bench, Mumbai, whereby and where under, the application

preferred by appellant under Section 9 of Insolvency and Bankruptcy Code

2016 (hereinafter referred to as 'I & B Code') has been rejected on the ground

that the appellant has claimed the legal expenses under Section 8(1) of the 'I

& B Code'.

According to appellant it rendered consultancy services to the (Corporate

Debtor) and shown the details of amount due arising out of the consultancy

services in Form 5. Application under Section 9 was filed in absence of any

dispute to the Demand Notice under Section 8(1) of the 'I & B Code' 2016. The

Adjudicating Authority rejected the same on the ground that it included legal

claim, which we have already noticed.

Learned counsel appearing on behalf of the respondent submits that they

have disputed the claim in the reply to the Demand Notice under Section 8(1).

It is further submitted that there is an existence of dispute in regard to

consultancy service rendered by the appellant. When we asked the learned

counsel to show from the record that the Respondent has raised any dispute prior to Demand Notice dated 13th September 2017, he rightly replied that there

is no record to suggest that the Respondent has disputed the claim prior to the

said date. He submits that there were conferences held and telephonically the

Respondent has disputed the claim but such submission cannot be accepted

in absence of any record relating to existence of dispute.

In so far as the claim of the respondent is that there is an agreement

where arbitration clause is there, we hold that mere mentioning of arbitration

clause cannot be taken into consideration to hold that there was an existence

of dispute. Any dispute subsequent to issuance of Demand Notice cannot be

taken into consideration to reject an application under Section 9 and therefore,

we are of the view that the Adjudicating Authority wrongly rejected the

application on the ground that the appellant included legal claim.

For the reasons aforesaid, we set aside the impugned order dated 15th

February 2018 passed by the Adjudicating Authority in CP No. 1485 of 2017

and remit the case to the Adjudicating Authority to admit the case and pass

order of moratorium and appointment of Interim Resolution Professional.

The appeal is allowed with the aforesaid observations and directions.

There shall be no order as to cost.

(Justice S.J. Mukhopadhaya) Chairperson

(Justice Bansi Lal Bhat) Member(Judicial) sm/uk