Mr. Pankaj Kalra (Suspended Director Of ... vs Greeka Greens Solutions (India) ...

(Arising out of Order dated 06.09.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Ahmedabad (Court - II) in CP (IB) No. 116 of 2023)

IN THE MATTER OF:

Mr. Pankaj Kalra (Suspended director of Essar Oil & Gas Exploration & Production Limited) resident of Flat No 7103, B wing Trump Tower, Lodha Park, Pandurang Bahadur Marg Worli, Mumbai-400013. .... Appellant

Vs

1. Greeka Greens Solution (India) Limited Formerly known as Greka Drilling (India) Ltd. Having its Registered office at: W-89A, Flat No. 101, Greater Kailash Part II, New Delhi 110048

2. Essar Oil & Gas Exploration & Production Limited Through its Interim Resolution Professional Having its registered office at: F 20, Balaji Shopping Wide Angle Highway Nagalpur, Mahesana, Gujarat -384002, India .... Respondents

Present: For Appellant: Mr. Abhijeet Sinha, Sr. Advocate with Mr. Mahesh Agarwal and Mr. Abhinav Garg, Advocates.

For Respondents: Mr. Mrinal Bharat Ram, Mr. Aditya Laroyia and Mr. Ananya Bhardwaj, Advocates for R-1.

Cont'd.../ -2-

JUDGMENT

ASHOK BHUSHAN, J.

This appeal by the Suspended Director of the Corporate Debtor -

"Essar Oil & Gas Exploration & Production Limited" has been filed

challenging order dated 06.09.2024 passed by Adjudicating Authority

(National Company Law Tribunal), Ahmedabad (Court - II) admitting

Section 9 application filed by the Respondent - "Greeka Greens Solution

(India) Limited". The appeal was heard by this Tribunal on 10.09.2024 and

following interim order was passed on 10.09.2024:

"In the meantime, the Impugned Order dated 06.09.2024 is suspended."

2. Although notices were issued on 10.09.2024 but no reply was filed

by the Respondent. On 06.11.2024, three weeks' time was allowed, as last

opportunity, to file reply. No reply has yet been filed. The matter was heard

on 04.03.2025. On the date when matter was heard, learned counsel

appearing for the Respondent submits that entire debt of Respondent No.1

has been liquidated. Brief facts of the case necessary to be noticed for

deciding this appeal are:

(i) The Corporate Debtor entered into a contract on 02.12.2013

and 31.12.2015, for purpose of hiring of drilling rig services

from the Respondent No.1.

Company Appeal (AT) (Insolvency) No. 1783 of 2024 -3-

(ii) Respondent No.1 issued demand notice on 05.03.2018 to the

Corporate Debtor that amount of Rs.12,78,73,257/- due and

payable by the Company.

(iii) Company replied the notice and a settlement agreement was

entered on 24.06.2019 which was further revised on

03.07.2020 where parties have revised the payment schedule

and settlement terms and arrived at computation of full and

final settlement amount of Rs.8,30,31,244/- equivalent to

$1,110,489 in 21 instalments starting from the date of

settlement till March, 2022.

(iv) In furtherance of the settlement, the Corporate Debtor from

03.07.2020 to 01.06.2022 has made payment of 20

instalments for a total amount of Rs.7,40,00,090/-. The last

instalment could not be paid due to certain calculation dispute

pertaining to final instalment between the parties.

(v) The Operational Creditor issued another Demand Notice on

17.10.2022 claiming an amount of Rs.24,38,26,881/-

including interest.

(vi) After giving demand notice, Section 9 application was filed by

the Operational Creditor on 23.12.2022.

Company Appeal (AT) (Insolvency) No. 1783 of 2024 -4-

(vii) During course of the pendency of the Section 9 application, the

balance payment of USD 125,833/- was made on 26.06.2024.

(viii) The Adjudicating Authority after hearing the parties by the

impugned order has admitted Section 9 application, which is

challenged in the present Appeal.

3. Learned counsel for the Appellant submits that present was a case

where Section 9 application deserve to be rejected. When Demand Notice

was given in the year 2018 by the Operational Creditor, parties have

entered into settlement under which entire payment was to be made in 21

instalments. 20 instalments were paid and last instalment amounting to

USD 125,833/- could not be paid because of calculation issue between the

parties. Present was not a case for initiation of any Section 9 proceeding

since the Corporate Debtor has discharged its liability and last instalment

could not be paid due to some calculation issues, which amount was also

paid during pendency of the Section 9 application. The Adjudicating

Authority without taking into consideration the payments made, has

admitted Section 9 application. It is submitted that Section 9 proceeding

cannot be resorted to as recovery mechanism by the Operational Creditor.

When parties had already entered into settlement much before issuance of

demand notice which gave rise to the Section 9 application, ignoring the

payments of 20 instalments, the Operational Creditor could not have filed

Section 9 application on the basis of initial agreement.

Company Appeal (AT) (Insolvency) No. 1783 of 2024 -5-

4. Learned counsel for the Respondent during submission has

submitted that entire debt of the Operational Creditor stands discharged.

It is to be noted that no reply to the appeal has been filed inspite of

opportunities to the Operational Creditor.

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

parties and perused the record.

6. We have already noticed that when earlier demand notice was issued

on 05.03.2018, parties have entered into settlement dated 24.06.2019

revised on 03.07.2020 for final settlement of Rs.8,30,31,244/- equivalent

to $1,110,489 in 21 instalments last instalment to be paid by March, 2022.

20 instalments were paid and it was only due to some calculation issues

last instalment was not paid, however, during the pendency of Section 9

proceeding said instalment was paid.

7. Learned counsel for the Respondent fairly admitted that entire debt

has been discharged. In facts of the present case, present is not a case for

initiation of Section 9 proceeding against the Corporate Debtor who after

receipt of the demand notice has entered into settlement and paid 20

instalments out of 21 instalments and non-payment of 21st instalment was

due to calculation issues regarding amount of last instalment. Hence,

present was not a case for initiation of any insolvency proceeding against

the Corporate Debtor.

Company Appeal (AT) (Insolvency) No. 1783 of 2024 -6-

8. We by interim order had already suspended the order dated

06.09.2024. No reply has been filed by the Respondent, as noticed above.

Learned counsel for the Respondent has also fairly submitted that entire

debt has been discharged. We are of the view that in facts of the present

case initiation of CIRP process under Section 9 against the Corporate

Debtor was uncalled for. Sufficient ground has been made out to allow this

appeal and set aside order dated 06.09.2024. Appeal is allowed. Impugned

order is set aside. Section 9 application filed by the Respondent is rejected.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical)

NEW DELHI

19th March, 2025

Archana

Company Appeal (AT) (Insolvency) No. 1783 of 2024