United Motors Heavy Equipment Pvt. Ltd vs Sundaram Industries Pvt. Ltd
- CitationCompany Appeal (AT) (Insolvency) No. 118 of 2017
Ratio decidendi
The rule this decision rests on
A pre-existing dispute between the parties as to the quality of goods supplied, evidenced before the issuance of the demand notice under section 8, is a ground on which an application under section 9 of the Insolvency and Bankruptcy Code, 2016 may be rejected, and the Adjudicating Authority is entitled to reject the application on that basis. Subsequent resolution of such a dispute, by the operational creditor's own account, does not alter the position that the dispute existed when the section 8 notice was issued, and the appellate court will not interfere with a rejection founded on that existing dispute. The dismissal of the appeal does not bar the operational creditor from pursuing its claim before the court of competent jurisdiction in which its suit is pending.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
United Motors Heavy Equipment Pvt. Ltd. ...Appellant
Versus
Sundaram Industries Pvt. Ltd. ...Respondent
Present: For Appellant: Mr. Vijayan, Mr. Tejaswiai BR and Mr. Sujit Kesheri, Advocates.
For Respondent: Mr. Arun Kathpalia, Senior Advocate with Mr. Anirudh Wadhwa, Mr. Chandramouli Prabhakar and Mr. Hiresh Chaudhary, Advocates.
ORDER
19.09.2017 - The appellant-'Operational Creditor' filed application
under section 9 of the Insolvency and Bankruptcy Code, 2016 after
serving notice under section 8 on the respondent-'Corporate Debtor'.
Learned Adjudicating Authority by impugned order dated 15th June,
2017, taking into consideration the fact that there is a dispute in
existence, relying on decision of this Appellate Tribunal in "MIs. Kirusa
Software Private Limited V. Mobilox Innovations Private Limited",
rejected the application.
-2-
2. Learned Counsel appearing on behalf of the appellant submitted
that there was no dispute in existence and suit was filed after service of
Section 8 notice only to save the period of limitation.
3. Notice was issued on Respondent-'Corporate Debtor' to state
whether any dispute was in existence prior to issuance of Section 8
notice.
4. In reply to the notice, the respondents in their counter affidavit
enclosed e-mail dated 15th November, 2011 which shows that the
engineering department of one John Bin Technology Corporate, to whom
the supply was made through the 'Corporate Debtor' who raised
objection regarding quality of 30 solid tyres supplied by the appellant as
materials were substandard.
5. Learned Counsel appearing on behalf of appellant referred to one
or other record to suggest that subsequently they have resolved the
dispute about the quality of goods were discussed, but there being an
existence of dispute, we are not inclined to interfere with the impugned
order.
6. In absence if any merit, the appeal is dismissed. However, the order
passed by the Adjudicating Authority or this Appellate Tribunal will not
come in the way of appellant for decision by Court of competent -3-
jurisdiction before which the suit preferred by appellant is pending. No
cost.
(Justice S.J. Mukhopadhaya) Chairperson
(Justice A.I.S. Cheema) (Balvinder Singh) Member (Judicial) Member(Technical)
ar
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