Suresh Kumar Aggarwal vs Royal Kitchen Appliances Pvt. Ltd. & Anr

Present: For Appellant : Mr. Rajshekhar Rao and Mr. Aditya Gupta, Advocates ORDER

20.09.2019 The Respondent - 'M/s. Oyster Steel and Iron Private Limited'

(Operational Creditor) filed an application under Section 9 of the 'Insolvency and

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

Insolvency Resolution Process' against 'M/s. Royal Kitchen Appliances Private

Limited' (Corporate Debtor). The Adjudicating Authority (National Company Law

Tribunal), Principal Bench, New Delhi by impugned judgment dated 19th August,

2019 having admitted the application, the present appeal has been preferred by

the Director of the 'Corporate Debtor'.

2. Learned counsel appearing on behalf of the Appellant submits that there

is no 'debt' payable in fact and the debt has been adjusted. He relied on the

reply to the notice issued by the Respondent (Operational Creditor) under

Section 8(1) of the 'I&B Code'. The said reply has been given on behalf of the

'Corporate Debtor' on 28th December, 2018 in terms of Section 8(2) wherein the

total history of the business between the parties has been referred to. As clause

8(h) therein, it is informed that the 'Corporate Debtor' has good business

relations with M/s. Laxmi Wire Netting and Weaving Factory and request was

made on behalf of the 'Operational Creditor' to the above mentioned effect to 'M/s. Laxmi Wire Netting and Weaving Factory', which they accepted.

Resultantly, the remaining balance amount of Rs.1,42,08,140/- for invoices

raised on Royal appliances to the 'Operational Creditor' and the amount of

Rs.31,30,134/- payable for invoices raised on Royal appliances to 'Duke Sponge

& Iron Pvt. Ltd.' were adjusted against the amount with 'Operational Creditor'

and 'Duke Sponge & Iron Pvt. Ltd.' owed to 'M/s. Laxmi Wire Netting and

Weaving Factory'. It was informed that resultantly a sum of Rs.1,73,38,000/-

was reduced from the outstanding of the 'Operational Creditor' and 'Duke

Sponge & Iron Pvt. Ltd.' and in the account of 'M/s. Laxmi Wire Netting and

Weaving Factory'. The aforesaid fact shows that the appellant replied to the

Demand Notice received under Section 8(1), the 'Corporate Debtor' and merely

wanted to show that it is a third party amount which has been adjusted. There

is no ground to suggest that 'debt' is not payable. In the said reply, it has never

been stated that there is a 'pre-existing dispute' and therefore, we find that the

due amount payable is much more than Rupees One Lakh and the Adjudicating

Authority has rightly admitted the application under Section 9.

In absence of any merit, the appeal is dismissed. No costs.

[Justice S.J. Mukhopadhaya] Chairperson

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

[ Kanthi Narahari ] Member (Technical) /ns/sk Company Appeal (AT) (Insolvency) No. 974 of 2019