Paresh Patel vs Shah Kirit Kumar Babulal Ni Company & Ors

IN THE MATTER OF: Mr. Paresh Patel .....Appellant Vs. M/s. Shah Kirit Kumar Babulal Ni Company & Ors. ......Respondents

Present : For Appellant: Mr. Ravi Sharma, Mr. A.Mishra, Advocates

For Respondents: Mr. Sunil Kumar Aggarwal, Advocate for R-2

Mr. Harshit Chopra, Mr. Pankaj Vivek, Advocates

29.07.2019 - The Appellant challenged the impugned order dated 7th

June, 2019 whereby an application u/s 9 of the Insolvency & Bankruptcy

Code, 2016 ('I&B' Code, for short) preferred by Respondent - 'Shah Kirit

Kumar Babulal Ni Company' was admitted against 'M/s H.M. Industrial

Private Ltd. ('Corporate Debtor').

2. On 15th July, 2019, when the matter was taken up, taking into

consideration, the submission made by the learned counsel for the

...contd.

2

Appellant, the following observations were made by this Appellate Tribunal:-

"O R D E R

15.07.2019 The only ground taken by the Appellant is

that the application u/s 9 of the 'Insolvency and Bankruptcy Code,

2019 filed by the 1st Respondent - 'M/s. Shah Kiritkumar Babulal Ni

Company' (Operational Creditor) was admitted by the impugned

order dated 7th June, 2019 without notice to the 'Corporate Debtor'.

However, if on such ground we remit the case to the Adjudicating

Authority that will be futile and we wanted to know the grounds the

'Corporate Debtor' could have opposed.

It is submitted that there is no documents or agreement in support

of the claim.

However, from the impugned order we find that 'Operational

Creditors' had produced records which enclosed the copies of the

invoices, copies of the translated invoices for castor seed, invoices for

sacks and debit memo and copies of invoices of sacks issued by the

'Corporate Debtor' to the 'Operational Creditor'. It is also placed on

record the certified copy of the GST certification of provisional

registration issued by the Government of India and in support of the

claim as shown that the 'Corporate Debtor' issued a cheque dated

...contd.

3

17th August, 2018 for the claimed amount drawn on Bank of Baroda

for Rs. 5,47,69,909/- in favour of the 'Operational Creditor' which

appears to have been bounced. A copy of 'Form C' has also been

showing that Demand Notice u/s. 8(1) was issued by the

'Operational Creditor'. It appears that no reply has been filed.

Learned counsel appearing on behalf of the Appellant submits that

the quality of the goods are not up to the mark but there is nothing

on record to suggest that any dispute was raised with regard to the

quality of the product prior to issuance of the Demand Notice u/s 8(1)

of the I&B Code on 20th October, 2018. It was in this background,

we are not inclined to remit the case as it would have been futile in

absence of any objection.

At this stage, learned counsel appearing on behalf of the

Appellant prays for some time to obtain instructions as if there is any

'pre-existence dispute' and service of the same on the 'Operational

Creditor' prior to 28th October, 2018. On his request, the appeal is

adjourned. The Appellant may file an additional affidavit within a

week.

Post the case 'for orders' on 29th July, 2019. The appeal may be

disposed of on the next date."

...contd.

4

3. Learned counsel appearing on behalf of the Appellant on instructions

submits that there is no document to show pre-existing dispute.

4. It is also not been disputed that the 'Corporate Debtor' was liable to

pay the debt which it defaulted. In the circumstances, only on the ground

that the Appellant ('Corporate Debtor') did not get notice before passing of

the impugned order, we are not inclined to set aside the order dated 7th

June, 2019 as the remand would be futile even after opportunity is given as

the application u/s 9 would still be liable to be admitted.

The appeal is dismissed. No. costs.

[Justice S. J. Mukhopadhaya] Chairperson

[Justice A. I. S. Cheema] Member (Judicial)

[Kanthi Narahari] Member (Technical)

ss/sk

Company Appeal (AT) (Insolvency)No.684 of 2019