Navin Chandra Mishra (Suspended ... vs Nand Kishore Palaha
- CitationCompany Appeal (AT) (Insolvency) No. 1851 of 2024
Ratio decidendi
The rule this decision rests on
Where a financial creditor's application under Section 7 of the Insolvency and Bankruptcy Code, 2016 establishes the existence of a debt and a default, the pendency of a civil suit filed by the corporate debtor does not by itself bar admission of the application. Where the corporate debtor's civil suit was instituted after the winding-up petition had been filed in the High Court and transferred to the Adjudicating Authority, that subsequent suit cannot be a ground for refusing to admit the Section 7 application.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: Navin Chandra Mishra (Suspended Director of CMR Lifesciences Pvt. Ltd.) ...Appellant Versus Nand Kishore Palaha & Ors. ...Respondents
Present: For Appellant : Mr. Sumesh Dhawan, Ms. Vatsala Kak and Mr. Shaurya Shyam, Advocates.
For Respondents : Mr. Navin Pahwa & Mr. Nayan Gupta, Sr. Advocates with Mr. Mohit D. Ram, Advocates for R-1 & R-2.
ORDER
(Hybrid Mode)
27.09.2024 : This Appeal has been filed against an Order dated
09.09.2024 passed by the Learned Adjudicating Authority (National Company
Law Tribunal, Ahmedabad, Division Bench, Court - I), by which Section 7
Application filed by the Financial Creditor has been admitted.
2. The Financial Creditor has initially filed a winding up Petition being
Company Petition 470/2016 which was transferred to the NCLT and the case
was registered as TP/3(AHM)/2023. In the Section 7 Petition, Reply was filed
and the Adjudicating Authority heard the Parties and by the Impugned Order
has admitted the Section 7 Application.
3. Adjudicating Authority in the Impugned Order has found that the debt
and default is proved and the Company Petition was filed at the time when
limit was only Rs. 1 Lakh and further the Corporate Debtor has committed
default exceeding to Rs. 1 Lakh.
4. The Argument of the Corporate Debtor that Civil Suit No. 193/2017 was
filed by the Corporate Debtor which is pending was also considered and the
Adjudicating Authority has held that the said pendency of the Suit shall not
be a reason to not admit the Section 7 Application.
5. The contention which was raised by the Appellant is that the dispute
was pending in the Civil Suit and the Section 7 Application ought not to have
been admitted.
6. We have considered the submissions of the Counsel for the Appellant
and perused the record.
7. Adjudicating Authority has already noticed the Civil Suit filed by the
Corporate Debtor. It is to be noted that the said Civil Suit was filed
subsequent to filing of the Company Petition in the High Court which stood
transferred to the Adjudicating Authority.
8. We thus are of the view that the pendency of the Civil Suit was no
reason for not proceeding to admit Section 7 Application, when the debt and
default was proved, Adjudicating Authority has rightly admitted the Section 7
Application.
We do not find any error in the Order passed by the Adjudicating
Authority. The Appeal is dismissed.
[Justice Ashok Bhushan] Chairperson
[Barun Mitra] Member (Technical)
[Arun Baroka] Member (Technical) himanshu/nn Comp. App. (AT) (Ins.) No. 1851 of 2024 2 of 2
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