Smart Timing Steel Ltd vs National Steel & Agro Industries Ltd

IN THE MATTER OF: Smart Timing Steel Ltd. ...Appellant Vs. National Steel & Agro Industries Ltd. ...Respondent

Present: For Appellant: - Mr. Sanjay Grover and Mr. Shivlal Singh, Advocates. For Respondent: - Ms. Siddhi, Ms. Abhisree Saujanya and Ms. Tishampati Sen, Advocates.

SUDHANSU JYOTI MUKHOPADHAYA, J.

The Appellant- 'Smart Timing Steel Ltd.'- ('Operational Creditor')

filed an application under Section 9 of the Insolvency and Bankruptcy

Code, 2016 ("I&B Code" for short) for initiation of the 'Corporate

Insolvency Resolution Process' against 'National Steel & Agro Industries

Ltd.'- ('Corporate Debtor'). The Adjudicating Authority (National Company

Law Tribunal), Mumbai Bench, Mumbai by impugned order dated 31st

October, 2018 rejected the application on one of the grounds that as per

Section 9, a copy of the certificate from the Financial institution reflecting

non-payment of the 'operational debt' has not been filed. 2

2. The Adjudicating Authority noticed that the Demand Notice was

issued on 23rd December, 2016 demanding the payment of the amounts

involved in default to the 'Corporate Debtor'. Due to failure of the

'Corporate Debtor' to bring to the notice of the 'Operational Creditor', the

existence of dispute and record of the pendency of suits or arbitration

proceedings filed before the receipt of the demand notice in relation to

such dispute, or the repayment of the unpaid operational debt,

'Operational Creditor' filed a Petition 06/I&BP/NCLT/MAH/2017 before

the Adjudicating Authority under Section 9. However, as the 'Operational

Creditor' was unable to produce a copy of the certificate from the

Financial Institution defined under Section 3(14) of the 'I&B Code', the

Adjudicating Authority rejected the claim earlier on 30th January, 2017.

3. Against the order of the Adjudicating Authority, Company Appeal

(AT) (Insolvency) No. 28/2017 was filed before this Appellate Tribunal,

which was also dismissed by an order dated 19th May, 2017 and affirmed

by the Hon'ble Supreme Court in Civil Appeal No. 9813/2017.

4. Taking into consideration all the aforesaid facts and that the

Hon'ble Supreme Court also considered the order of this Appellate

Tribunal in the case of 'Smart Timing Ltd. v. National Steel & Agro

Industries Ltd.', the Adjudicating Authority dismissed the petition as the

second petition was for same cause of action, was not maintainable.

Company Appeal (AT) (Insolvency) No. 04 of 2019 3

5. Notice was given to the Respondent. They have appeared and

opportunity was given to the parties to settle the matter but no progress

made.

6. In view of the fact that earlier petition under Section 9 was filed by

the Appellant- 'Smart Timing Steel Ltd.'- for initiation of the Corporate

Insolvency Resolution Process' against 'National Steel & Agro Industries

Ltd.'- ('Corporate Debtor') was earlier dismissed by the Adjudicating

Authority and affirmed by the Hon'ble Supreme Court, we agree with the

observations made by the Adjudicating Authority that the second petition

for same cause of action is not maintainable.

The appeal is accordingly dismissed. No costs.

[Justice S.J. Mukhopadhaya] Chairperson

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

[ Kanthi Narahari ] Member (Technical)

NEW DELHI 13th November, 2019

/AR/

Company Appeal (AT) (Insolvency) No. 04 of 2019