Praveen Kumar Mundra vs Cil Securities Ltd

Praveen Kumar Mundra ...Appellant

Versus

CIL Securities Ltd. ...Respondent

Present: For Appellant : Mr. Aditya Diwan, Mr. Arpit Marwah and Mr. Karan Nagpal, Advocates

For Respondent : Mr. Y. Suryanarayana, Advocate

ORDER

14.05.2019 This appeal has been preferred by 'Mr. Praveen Kumar

Mundra', who claims to be 'Operational Creditor' of 'CIL Securities Limited'

(Corporate Debtor) against order dated 10th December, 2018 whereby application

under Section 9 of the 'Insolvency and Bankruptcy Code, 2016 (for short, the

'I&B Code') preferred by the Appellant has been rejected.

2. The case of the Appellant was that in spite of repeated requests to the

'Corporate Debtor', it failed to make payment. It is further averred for the

services provided till 28th February, 2018 there is an outstanding due amount of

Rs. 3,26,807.12, which is also confirmed by the 'Corporate Debtor' by its ledger

account up to 28th February, 2018.

3. The respondent (Corporate Debtor) appeared and took plea that it is willing

to process the invoices raised by the petitioner (Appellant herein) subject to the

condition that the petitioner (Appellant herein) gets himself registered under the 2

GST Act, 2017. It is also averred that by virtue of an agreement between the

parties, the remedy for a dispute is available under the Trading Member and

authorised 'Person Agreement' and that as per the provisions of the GST Act,

2017 it is applicable.

4. Taking into consideration the fact that the Respondent (Corporate Debtor)

was ready to pay the amount subject to the process of the GST, the Adjudicating

Authority refused to entertain the application under Section 9 of the I&B Code.

5. On 24th April, 2019, when the matter was taken up, the following order

was passed :

"An application of appellant u/s 9 of the I&B Code

having rejected, the appellant has preferred this appeal

against the order of rejection dated 10th December, 2018.

Learned counsel for the respondent submits that

there is no merit in this appeal and in spite of the same

the respondent has agreed to pay the claimed amount

and draft is ready. He is allowed to file reply-affidavit

within 10 days enclosing therewith a copy of the draft.

In the meantime, it will be open to the appellant to

accept the draft and settle the matter and may file a

rejoinder within 3 days thereof.

We may observe that if the appellant refuses to

accept the claimed amount, in that case adverse opinion

may be formed by this Appellate Tribunal."

Company Appeal (AT) (Insolvency) No. 89 of 2019 3

6. Learned counsel appearing on behalf of the respondent while he submitted

that the Respondent is not a 'corporate person' within the meaning of Section

3(7) of the I&B Code, submitted that in spite of the same, it has come out with

the Demand Draft dated 5th March, 2019 bearing No. 000356 issued by the

HDFC Bank in favour of 'Peenus Investments' (Operational Creditor) for

Rs. 3,36,978.48, which is the total claimed amount shown in the petition under

Section 9 of the I&B Code.

7. The Appellant is present in person along with learned counsel for the

Appellant. Learned counsel for the Appellant, on instructions, submits that the

Appellant is not ready to accept the Demand Draft for Rs.3,36,978.48 as no such

offer was made on the date when the application was filed before the Adjudicating

Authority. It is further submitted that the application under Section 9 of the

I&B Code was not filed for recovery of the amount. From the impugned order,

we find that the amount was deposited with the 'Operational Creditor' but the

'Operational Creditor' returned back the amount.

8. On hearing the counsel for the parties, we find that the Respondent had

taken a plea before the Adjudicating Authority that it is agreeable to pay the

amount subject to the registration of the 'Operational Creditor' under the 'GST

Act, 2017'. It further appears that before the admission of the application, the

Respondent was ready with the draft for Rs.3,36,978.48. However, the Appellant

is not inclined to accept the same.

9. From the aforesaid action of the Appellant - 'Operational Creditor', we find

that the Appellant initiated 'corporate insolvency resolution process' with

fraudulently and malicious intent for any purpose other than the resolution of

Company Appeal (AT) (Insolvency) No. 89 of 2019 4

insolvency or liquidation and, therefore, it is clearly covered under Section 65 of

the I&B Code.

10. For the reasons aforesaid, we are not inclined to interfere with the

impugned order. The appeal is dismissed with no cost. However, this order will

not come in the way of the Appellant to approach the Respondent and to accept

the Demand Draft for Rs.3,36,978.48. If the Appellant approached the

Respondent within 15 days, the Respondent will hand over the same.

[Justice S.J. Mukhopadhaya] Chairperson

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

[ Kanthi Narahari ] Member (Technical) /ns/gc

Company Appeal (AT) (Insolvency) No. 89 of 2019