2021 (5) TMI 875 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI - Insolvency & Bankruptcy

Head Note / Extract:
Validity of application admitted for initiation of CIRP - pre-existing dispute or not - contravention of Rule 152, Rule 150 and Rule 89 of the NCLT Rules 2016. Whether there is any pre-existing dispute? - HELD THAT:- Upon a bare reading of e-mail dated 03.11.2016, it is clear that the Corporate Debtor stated that the supplied coal is not as per specification and due to that nozzle bent and boiler has become damaged which would lead to heavy production losses. Hence, it was requested that delivery of the coal be stopped. It is also mentioned that if more losses occurred due to poor/inferior quality of coal they may debit the same amount in the account of Operational Creditor - Corporate Debtor has neither issued any debit note nor has returned the supplied coal but consumed the same. It means that after receiving the e-mail dated 04.11.2016 the Corporate Debtor was satisfied and kept quiet for about 15 months. It is only when they received a statutory notice that they filed a Civil Suit against the Operational Creditor. It cannot be held that there was any dispute in regard to the transaction in question. It seems that in order to avoid the liability, the Corporate Debtor through its reply to notice, tried to impress that there was a pre-existing dispute. The Civil Suit has been filed after receipt of statutory notice, therefore, such Civil Suit cannot be treated as existence of dispute - the Corporate Debtor has failed to prove any pre-existing dispute in regard to transaction in question. Whether the impugned order is passed in contravention of Rule 152, Rule 150 and Rule 89 of the NCLT Rules 2016? - HELD THAT:- It is an admitted fact that the NCLT Bench, Ahmedabad consisted of Shri H. P. Chaturvedi Member (Judicial) and Shri Prashanta Kr. Mohanty Member (Technical) who heard the application and reserved for orders on 20.11.2019. Thereafter, the parties have filed their written submission on 06.01.2020 and the impugned order was pronounced by the same Bench on 28.05.2020. Meanwhile, vide order dated 12.05.2020 and 30.04.2020 these members have been transferred. However, due to lockdown they were unable to join their new place of posting. Since the members were physically present at Ahmedabad. Therefore, in public interest vide order dated 21.05.2020, a special Bench was constituted to pronounce the orders reserved by the erstwhile Bench as per Section 419 (3) of the Companies Act, 2013 for the period of 22.05.2020 to 29.05.2020. Thus, it cannot be said that the members have pronounced the impugned order in contravention of Rule 152 of the NCLT Rules, 2016. The Appellant has failed to establish that there was a pre-existing dispute and in pronouncing the impugned order, the Adjudicating Authority committed any illegality - there are no merits in the appeal - appeal dismissed.