Vijay Jeet Kataria vs Praveen Jain Proprietor Bharat Traders

IN THE MATTER OF: Vijay Jeet Kataria ...Appellant Versus Praveen Jain & Anr. ...Respondents

Present: For Appellant : Mr. Parvesh Bansal and Mr. Rahul Bansal, Advocates.

For Respondents : Mr. Praveen Jain, Party in person.

ORDER

(Hybrid Mode)

13.05.2025 : This appeal has been filed against an order dated

12.09.2024 admitting Section 9 application filed by the operational creditor.

2. When the appeal was heard, appellant submitted that he has settled

with the operational creditor and the proposal be placed before the CoC, which

we noticed in our order dated 19.03.2025, which is as follows:

"This Appeal has been filed against the order dated 12.09.2024 passed by Adjudicating Authority admitting Section 9 application filed by the Operational Creditor. Learned Counsel for the Appellant submits that the Appellant is already entered into settlement with the Operational Creditor on 11.11.2024 for sum of Rs.1,43,50,000/- and part of the amount has already been paid.

Learned Counsel appearing for the RP submits that Committee of Creditors has already been constituted. In the facts of the present case, when the Appellants prays that he has settled with the Operational Creditor the course open for the Operational Creditor is to file an application under Section 12A and the CoC having been constituted, of course, after the approval by 90% of the CoC as per Section 12A r/w Regulation 30A of the Regulation.

Learned Counsel for the Appellant seeks liberty to file hard copy of the I.A. by tomorrow.

Learned Counsel for the Appellant may also inform the Operational Creditor of the date fixed in the matter. List this Appeal on 24.03.2025."

3. Subsequently, it has been informed that CoC has not approved the 12A

settlement which has been noticed in 01.05.2025 order which is to the

following effect:

"Learned counsel for the Appellant submitted that the CoC has not approved the 12A settlement. He prays that appeal may be heard on merit in next two week. As prayed, list this Appeal on 13.05.2025."

4. Learned counsel for the appellant submitted that corporate debtor is a

running company and appellant shall also approach the Bank for settling

their dues and he has already deposited Rs.35 lakh/- from the personal

account of the promoters.

5. We have considered the submissions of the counsel for the appellant

and perused the record.

6. In Section 9 application which was filed in the year 2018 in terms of the

settlement between the parties on 26.08.2019, the Section 9 application was

withdrawn which was revived on account of corporate debtor not able to

comply the terms of the settlement.

7. Learned counsel for the appellant submits that in fact the invoices were

all handwritten and the issues were not considered by the Court. It is

submitted that there was also issue of limitation.

8. The order impugned notices the question of limitation and has returned

finding that application cannot be dismissed on the ground of limitation. The

Comp. App. (AT) (Ins.) No. 2116 of 2024 2 of 3 fact that settlement was entered which was not complied with by the corporate

debtor itself is an acknowledgement of the dues of the operational creditor.

9. Learned counsel for the appellant submits that appellant is a registered

MSME and wants the company should run as a running company.

10. Counsel for the Resolution Professional (RP) submits that Form-G has

already been issued.

11. If so advised, it is open for the suspended director to submit a resolution

plan. The company being MSME they are also entitled to submit a plan after

fulfilling all necessary eligibility. We further make it clear that it is also open

for the appellant to enter into settlement with the Union Bank who is a

financial creditor and in event any settlement is arrived, it is open for the

appellant to file afresh 12A application before the adjudicating authority in

accordance with law.

Subject to the above observations and liberty, appeal is dismissed.

Learned counsel for the appellant lastly contended that the Section 9

application was filed for the recovery which is not permissible. The scheme

under Sections 8 & 9 indicates that in event of default committed by corporate

debtor, the operational creditor is entitled to file an application under Section

9 and we thus are of the view that on above submissions no fault can be found

with the order impugned.

[Justice Ashok Bhushan] Chairperson

[Arun Baroka] Member (Technical) himanshu/nn Comp. App. (AT) (Ins.) No. 2116 of 2024 3 of 3