Ved Prakash vs Navkar Traders & Anr

Sh. Ved Prakash ...Appellant

Vs.

M/s. Navkar Traders & Anr. ...Respondents

Present: For Appellant: - Mr. Aditya Sharma, Advocate.

For Respondents: - Mr. Ajay Kumar Jain and Mr. Sourit Arora, Advocates.

ORDER

17.01.2019─ Learned counsel for the Appellant submits that the

order of admission of application filed by the Respondent- ('Operational

Creditor') under Section 9 of the Insolvency and Bankruptcy Code, 2016

("I&B Code" for short) passed by the Adjudicating Authority (National

Company Law Tribunal), New Delhi Bench, on 2nd January, 2019 is not

sustainable, in view of the fact that the parties arrived at an amicable

settlement qua the dispute in regard to the 'operational debt' on 27th

December, 2018 and in pursuance thereof three cheques of the value of

Rs. 5,00,000/-; Rs. 5,00,000/- and Rs. 6,10,000/- respectively were

issued on the same date i.e. 27th December, 2018 in favour of the

Respondent- ('Operational Creditor').

2. Learned counsel for the Appellant has produced the Bank

Statements for the period from 27th December, 2018 to 3rd January, 2019 2

issued by Indian Overseas Bank, wherein one cheque of the value of Rs.

5,00,000/- out of the three cheques has been cleared on 29th December,

2018 and credited to the account of Respondent- ('Operational Creditor')

and value of two cheques to the tune of Rs. 5,00,000/- and Rs.

6,10,000/- respectively is reflected in the account of the Respondent-

('Operational Creditor') on 1st January, 2019.

3. This factual position is not disputed by the learned counsel for the

Respondent- 'Operational Creditor' who admits that in terms of the

amicable settlement inter se the 'Operational Creditor' and the 'Corporate

Debtor', the claim of the 'Operational Creditor' has been fully and finally

settled.

4. It is submitted that the dispute has been settled and the settlement

worked out, implemented and the claim of the Respondent- 'Operational

Creditor' settled well before the admission of the application under

Section 9 of the 'I&B Code'.

5. Learned counsel for the Appellant submits that unfortunately, the

development in regard to settlement of dispute was not brought to the

notice of the learned Adjudicating Authority on 2nd January, 2019 when

the impugned order of admission of application under Section 9 of the

'I&B Code' was passed.

6. After hearing learned counsel for the parties and wading through

the records including the Bank Statements produced today to

substantiate and corroborate the stand taken in regard to settlement, I

Company Appeal (AT) (Insolvency) No. 45 of 2019 3

am of the considered opinion that an amicable settlement has already

been reached between the parties on 27th December, 2018 in terms

whereof cheques worth Rs. 16,10,000/- have been delivered to the

Respondent- 'Operational Creditor' towards full and final satisfaction of

his claim. The Bank Statements corroborate the terms of the amicable

settlement placed on record reflecting credit of the amount of Rs.

16,10,000/- in the account of Respondent- 'Operational Creditor' well

before the date of passing of the impugned order.

7. In view of this factual matrix, there is no difficulty in holding that

no debt was payable in law and consequently no default has occurred

qua the 'operational debt' when the impugned order of admission of

application under Section 9 of the 'I&B Code' was passed by the learned

Adjudicating Authority. In view of the same, the impugned order cannot

be sustained and the same is set aside.

8. In effect, order (s), passed by the Adjudicating Authority

appointing 'Interim Resolution Professional', declaring moratorium,

freezing of account, and all other order (s) passed by the Adjudicating

Authority pursuant to impugned order and action, if any, taken by the

'Interim Resolution Professional', including the advertisement, published

in the newspaper calling for applications, all such orders and actions are

declared illegal and are set aside. The application preferred by

Respondent under Section 9 of the 'I&B Code' is dismissed. Learned

Adjudicating Authority will now close the proceeding. The 'Corporate

Company Appeal (AT) (Insolvency) No. 45 of 2019 4

Debtor' is released from all the rigour of law and is allowed to function

independently through its Board of Directors with immediate effect.

9. The fee and cost incurred by Mr. Aditya Kumar- 'Interim Resolution

Professional', who is present in court in person, shall be determined by

the learned Adjudicating Authority who will pass order with regard to the

same. The appeal is allowed with aforesaid observation. However, in the

facts and circumstances of the case, there shall be no order as to costs.

(Justice Bansi Lal Bhat) Member(Judicial) Ar/uk

Company Appeal (AT) (Insolvency) No. 45 of 2019