Prowess International Pvt. Ltd vs Shyam Steel Industries Ltd

Prowess International Pvt. Ltd. ...Appellant Versus M/s. Shyam Steel Industries Ltd. ...Respondent

Present: For Appellant : Mr. Akhilesh Kr. Shrivastava, Advocate and Ms. Suhita Mukhopadhyay, PCS

For Respondent : Mr. Abhijeet Sinha, Mr. Shounak Mitra and Mr. Zulfiqar Ali Alquaderi, Advocates

ORDER

06.07.2018 The appellant (Operational Creditor) preferred an application

under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter

referred to as the 'I&B Code') for initiation of 'corporate insolvency resolution

process' against the respondent - M/s. Shyam Steel Industries Limited

(Corporate Debtor). The plea was taken that a sum of Rs. 44,73,178/- was due

and payable by the 'Corporate Debtor' to the 'Operational Creditor', which

defaulted in payment.

The Adjudicating Authority (National Company Law Tribunal), Kolkata

Bench by the impugned order dated 11th May, 2018 rejected the claim on the

ground that there is an 'existence of dispute' and no 'debt' is to be recovered,

therefore, there is no 'default'.

We have heard the learned counsel appearing on behalf of the appellant

and the learned counsel for the 'Corporate Debtor'. 2

From the record, we find that Company Petition was preferred by the

appellant bearing C.P. No. 668 of 2016 before the High Court of Calcutta under

Section 433(e) of the Companies Act, 1956 on the ground for non-payment of the

aforesaid amount. However, the Hon'ble High Court dismissed the petition

holding that "if a triable issue is raised the company cannot be directed to be

wound up. The company should have a fair chance to defend its claim. The

petitioner has clearly stated in paragraph 10 of the petition that last payment was

received on 11th May, 2012 and thereafter there was no acknowledgement of any

liability. The remedy appears to be barred by limitation."

The aforesaid decision of the Hon'ble High Court of Calcutta was

challenged by the appellant before the Hon'ble Supreme Court in Special Leave

Petition, which was also dismissed on 1st September, 2017. It is only thereafter

the 'Operational Creditor' issued notice under Section 8(1) of the I&B Code and

asked for initiation of the 'corporate insolvency resolution process'. However, in

view of the finding of the Hon'ble High Court that the claim is barred by

limitation, we hold that the Adjudicating Authority rightly hold that the debt

claim is legally recoverable and therefore, there is no default. We find no ground

to interfere with impugned order. It is accordingly dismissed. No cost.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial)

/ns/uk/

Company Appeal (AT) (Insolvency) No. 332 of 2018