Pan Pacific Engineering Service Pvt Ltd vs Ayyappa Hydro Power Limited

Pan Pacific Engineering Services Pvt. Ltd. ...Appellant

Versus

Ayyappa Hydro Power Ltd. ...Respondent

Present: For Appellant: Mr. Sankar P. Panicker, Mr. Mukund P., Advocates For Respondent:

ORDER

27.09.2023: Heard Learned Counsel for the Appellant.

2. This Appeal has been filed against the Order dated 25th July, 2023 by

which Order the Adjudicating Authority has dismissed Section 9 Application

filed by the Appellant.

3. The Appellant's case is that Operational Creditor is a registered MSME

and Corporate Debtor through Tender Process shortlisted Operational

Creditor for labour work. It is submitted that work order was issued in 2013

however the amount was not paid and the default was committed on 15th June,

2015. The Operational Creditor thereafter filed an Application before the

Chairman MSME in 2019 for amount of Rs. 49,33,296/- which was allowed

by Order dated 10th November, 2020. After the said Order, when the amount

was not paid, Section 8 Notice was issued and Application was filed on

12.11.2021. The Adjudicating Authority took the view that the default having -2-

been committed on 15th June, 2015, the Application is barred by time. It is

submitted that the said finding is recorded in paragraph 13.

4. Learned Counsel for the Appellant challenging the Order contends that

the default has to be treated as on 10th November, 2020 when the Order was

passed by MSME Council and default was committed thereafter. He has

referred to paragraph 14 of the Order where the Adjudicating Authority has

observed that even if the date of default is taken as passing of the Order dated

10th November, 2020 passed by MSME, the petitioner did not cross the barrier

of Section 4. Following observation was made in paragraph 14:

"14. Further even if the date of default is taken as the

date of passing of the order by MSME i.e. 10th November

2020, then the petition does not cross the barrier of Section

4 of IBC. The pendency of an appeal against such an award

is thus of no consequence and does not extend the date of

default on this count as well."

5. The Adjudicating Authority having already held in paragraph 13 that

date of default being 15th June, 2015, the Application is barred by time, we

see no reason as to why again fresh period of limitation can be given to the

Appellant from the date of MSME Order dated 10th November, 2020. Right to

file application under Section 7 accrued to the Appellant on 15th June, 2015

which was a date of default. If we take the date of default as on 10th November,

2020 as contended by Learned Counsel for the Appellant, the said date is

Company Appeal (AT) (Insolvency) No.1239/2023 -3-

between the prohibited period under Section 10A and no application can be

filed for any default committed during the Section 10A Period.

6. We thus are of the view that submission of Appellant that date of default

be taken as 10th November, 2020, Appellant cannot improve the case. We thus

are of the view that no error has been committed by the Adjudicating Authority

in rejecting Section 9 Application. Hence, the Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Mr. Barun Mitra] Member (Technical)

[Mr. Arun Baroka] Member (Technical)

Basant/nn

Company Appeal (AT) (Insolvency) No.1239/2023