Rajprotim Agencies Pvt Limited vs Jyoti Maheswari And Anr

Partha Protim Banerjee ...Appellant

Versus

Jyoti Maheshwari & Ors. ...Respondents

For Appellant: Mr. Swapnil Gupta, Mr. Akash Khurana and Ms. Shally Pandey, Advocates For Respondents: Mr. Mr. Ashutosh Kumar, Mr. Swarnil Dey, Advocates

ORDER

Per: Justice Rakesh Kumar Jain.

29.08.2022: This appeal is directed against the order dated 12.01.2022

passed by the Adjudicating Authority (National Company Law Tribunal,

Kolkata Bench) by which an application filed under Section 9 of the Insolvency

and Bankruptcy Code, 2016 (in short 'Code') by Jyoti Maheswari (Sole

Proprietor) running her business under the name and style "Unique Security

Organisation" against Rajprotim Agencies Pvt. Ltd. (Corporate Debtor) was

admitted.

2. In brief, the Operational Creditor, before invoking the provision of

Section 9 of the Code, served a notice dated 05.12.2019 upon the Corporate

Debtor which is in fact a sine qua non for proceeding further to initiate

Corporate Insolvency Resolution Process (in short 'CIRP'). It is an admitted fact

Company Appeal (AT) (Ins.) No. 276 OF 2022 2

that notice was received by the Corporate Debtor but it did not choose to reply

to the same. Thereafter, the Operational Creditor filed the application under

Section 9 of the Code on 07.01.2020 before the Adjudicating Authority staking

a claim of Rs. 81,09,198/- on account of services rendered. Notice in the

application was issued. The present Appellant was served. The Appellant

engaged a Counsel and put its appearance through him before the

Adjudicating Authority. However, for the reasons best known to the Appellant,

no reply to the application filed under Section 9 of the Code by the Operational

Creditor was filed by the Corporate Debtor. The Appellant also stopped

appearing before the Adjudicating Authority and ultimately by the impugned

order dated 12.01.2022, the application filed under Section 9 of the Code by

the Operational Creditor was admitted ex-parte. Although, the Appellant had

the remedy to file an application before the Adjudicating Authority for recalling

the ex-parte order by citing sufficient cause for its non-appearance but it chose

not to file the said application rather filed the present appeal before this

Tribunal against the impugned order.

3. Counsel for the Appellant has raised two issues in this appeal. Firstly,

the application filed under Section 9 of the Code was not maintainable because

the application was filed on 07.01.2020 regarding a claim of Rs. 81,09,198/-

whereas by notification dated 24.03.2020, issued by the MCA, Govt. of India,

the Central Govt. had specified Rs. 1 Crores as the minimum amount of

default for the purpose of invoking the provisions of the Code. It is submitted

that once the threshold was changed during the pendency of the application

from Rs. 1 Lac to 1 Crore, the Adjudicating Authority was not having the

Company Appeal (AT) (Ins.) No. 276 OF 2022 3

jurisdiction to entertain and hear the application. In this regard, he has

referred to two decisions of the Hon'ble Supreme Court rendered in the case

of Neena Aneja & Anr. Vs. Jai Prakash Associates Ltd., (2022) 2 SCC 161 and

Ramesh Kymal Vs. Siemens Gamesa Renewable Power Pvt. Ltd. (2021) 3 SCC

224. He has further submitted that the application filed under Section 9 of the

Code is also not maintainable because of Section 8(2)(a) of the Code there was

a pre-existing dispute. In this regard, he has drawn our attention towards

notice dated 22.07.2021 to contend that the said notice was given by the

Operational Creditor to Rajprotim Supply Chain Solution Limited in respect of

facility of security personal provided to M/s Rajprotim Supply Chain Solution

Limited Dankuni and M/s Rajprotim Supply Chain Solution Limited Godrej

(Dhulagorh). It is further submitted that at the time when notices were given,

the Appellant was no more in this business in question because of an

agreement dated 21.12.2016 as per which the business of the Appellant was

transferred to a new entity called Rajprotim Supply Chain Solution Limited.

4. In reply, Counsel for the Operational Creditor has argued that the

Appellant is trying to raise a new issue in appeal regarding a pre-existing

dispute though it had ample opportunity to raise the said dispute when the

notice under Section 8 was served upon it and when the application under

Section 9 of the Code was filed before the Adjudicating Authority. It is further

submitted that insofar as, first contention of the Appellant is concerned that

the Adjudicating Authority had lost his jurisdiction to entertain the application

on account of change of threshold during the pendency of the application

before it, he has referred to a decision of three members bench of this Tribunal

Company Appeal (AT) (Ins.) No. 276 OF 2022 4

rendered in the case of Madhushan Tantia Vs. Amit Choraria & Anr. CA (AT)

(Ins.) No. 557 of 2020 decided on 12.10.2020. It is submitted that the facts of

this case are similar to the case in hand and the issue involved is also the

same on which this Tribunal has held that the change in the threshold during

the pendency of the application for adjudication will not affect the jurisdiction

of the Tribunal as the notification dated 24.03.2020 is prospective and not

retrospective. As far as, the pre-existing dispute is concerned, it is submitted

that the Appellant has been making the payments to the Operational Creditor

even till December, 2017 and in this regard, he has referred to Pg. 191 much

less to the statement dated 21.12.2017 as per which a sum of Rs. 10 lacs

which was paid by the Appellant to the Operational Creditor. It is also

submitted that this fact has also duly noticed in the impugned order by the

Adjudicating Authority.

5. We have heard Counsel for the parties and perused the record with their

able assistance.

6. There is no dispute that the Corporate Debtor had the business

relationship with the Operational Creditor who had been supplying securities

services to it. It is also not disputed that the Operational Creditor had duly

complied with the provisions of Section 8 of the Code by serving a demand

notice upon it. In this regard, it would be relevant to refer to Section 8 of the

Code for a quick reference because the said provision is designed in a way to

avoid a possible litigation which may be initiated by filing an application under

Section 9 of the Code. Section 8 is reproduced herein:

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"Section 8: Insolvency resolution by operational creditor. *8. (1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debt or copy of an invoice demanding payment of the amount involved in the default to the corporate debtor in such form and manner as may be prescribed.

(2) The corporate debtor shall, within a period of ten days of the receipt of the demand notice or copy of the invoice mentioned in sub-section (1) bring to the notice of the operational creditor--

(a) existence of a dispute, 1[if any, or] record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute;

(b) the 2[payment] of unpaid operational debt--

(i) by sending an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the corporate debtor; or

(ii) by sending an attested copy of record that the operational creditor has encashed a cheque issued by the corporate debtor.

Explanation.--For the purposes of this section, a "demand notice"

means a notice served by an operational creditor to the corporate debtor demanding 2[payment] of the operational debt in respect of which the default has occurred."

7. The aforesaid provision shows that the Operational Creditor shall have

to deliver demand notice of the unpaid operational debt alongwith copy of the

invoices upon the Corporate Debtor in the form and manner which is

prescribed and then the Corporate Debtor shall within a period of 10 days of

the receipt of the demand notice of the copies of the invoice may bring to the

notice of the Operational Creditor firstly that there is a pre-existing dispute

and secondly the Corporate Debtor may make the payment of unpaid

operational debt towards the application which is likely to be filed under

Section 9 of the Code. The Appellant herein did not take the benefit of the

notice which was served upon it and rather kept totally silent. Not only this,

when the application under Section 9 of the Code was filed which may

ultimately, after a admission cause initiation of proceedings under Section 13

Company Appeal (AT) (Ins.) No. 276 OF 2022 6

and 14 of the Code i.e. initiation of the CIRP and imposition of the moratorium,

chose not to file reply to the said application also, despite availing various

opportunities as has been recorded by the Adjudicating Authority in the

impugned order. Not only that, the Appellant who was appearing through a

counsel also stopped appearing before the Adjudicating Authority for the

reasons best known to it and then ultimately the Adjudicating Authority had

proceeded against the Appellant and passed the ex-parte order of admission

but relying upon the evidence led by the Operational Creditor. It is also

pertinent to mention here that though the Appellant had a remedy to file the

application before the Tribunal for recalling of the admission order dated

12.01.2022 but again for the reasons best known to it no such application was

filed rather the present appeal has been filed in which the issue of pre-existing

dispute which is purely an issue of fact has been raised. The facts and

circumstances, narrated hereinabove indicates the casual approach or some

kind of arrogance of the Appellant for not responding to the notice issued by

the Operational Creditor till the culmination of the proceedings before the

Adjudicating Authority. In any case, in respect of the legal issue which has

been raised by the Appellant that if the application is filed at the time when

the threshold was Rs. 1 lac and during the pendency of the application the

threshold is changed Rs. 1 lac to 1 Crore the application has to be dismissed,

it would be suffice to say that the decisions relied upon by the Appellant in the

case of Neena Aneja & Anr. (Supra) and Ramesh Kymal (Supra) are not

applicable to the facts and circumstances of the present case rather the

decision rendered in the case of Madhusudan Tantia (Supra) by this Tribunal

Company Appeal (AT) (Ins.) No. 276 OF 2022 7

is directly on the issue and in this regard it would be relevant to refer to the

observations made in Para 56, which is as under:-

"56. As far as the present case is concerned, this Tribunal, after carefully and with great circumspection, ongoing through the contents of the notification dated 24.03.2020 issued by the Ministry of Corporate Affairs, Government of India, whereby and whereunder the minimum amount of default limit was specified as Rs. one crore (obviously raising the minimum amount from Rs. one lakh to one crore) unerringly comes to a definite conclusion that the said notification is only 'Prospective in nature' and not a 'retrospective' one because of the simple reason the said notification does not in express term speaks about the applicability of 'retrospective' or 'retroactive' operation. Suffice it for this Tribunal to point out that from the tenor, spirit and the plain words employed in the notification dated 24.03.2020 of the Ministry of Corporate Affairs, Government of India, one cannot infer an intention to take or make it retrospective as in this regard, the relevant words are conspicuously absent and besides there being no implicit inference to be drawn for such a construction in the context in issue. That apart, if the notification dated 24.03.2020 of the Ministry of Corporate Affairs, Government of India, is made applicable to the pending applications of IBC (filed earlier to the notification in issue) it will create absurd results of wider implications / complications."

8. Therefore, we do not agree with the contention of the Appellant, insofar

this argument is concerned and the same is hereby rejected. As regard the

issue of pre-existing dispute is concerned, there is no evidence brought on

record by the Appellant in this regard, except for referring to invoices relied

upon by the Operational Creditor to contend that those invoices pertains to a

new company i.e. Rajprotim Supply Chain Solutions Pvt. Ltd. In this regard,

we would hasten to add that by virtue of an agreement dated 21.12.2016, the

entire business of the Appellant was transferred to the new company i.e.

Rajprotim Supply Chain Solutions Pvt. Ltd. and the Appellant had been paying

the dues/debts of the Operational Creditor till December, 2017 and then

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stopped the same. As a result thereof, the Operational Creditor had to initiate

the proceedings. No other point has been raised.

9. In view of the aforesaid facts and circumstances, we do not find any

merit in this appeal and the same is hereby dismissed though without any

order as to costs.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Dr. Alok Srivastava] Member (Technical)

SC/RR

Company Appeal (AT) (Ins.) No. 276 OF 2022