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2017 (6) TMI 738 - NATIONAL COMPANY LAW TRIBUNAL AHMEDABAD

2017 (6) TMI 738 - NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD - TMI - Petition under Section 9 of the Insolvency and Bankruptcy Code - Held that:- A dispute which is covered by sub-section (6) of Section 5 of the Code has been raised by the Respondent even before the Demand Notice was issued, and notice of dispute has been given by the Respondent to the Petitioner. - Sub-section (5) of Section 8 of the Code says that Adjudicating Authority shall by an order admit the Application if no notice o .....

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UJCOT in the year 2003 for the amount claimed in the Demand Notice and it is still pending. - The provisions that govern the admission of a Petition for triggering the Insolvency Resolution Process by an Operational Creditor are contemplated in Section 9. Therefore, what is stated in Section 9 cannot be ignored on the ground that NCLT is given jurisdiction to decide the claims against the Corporate Debtor. Therefore, there is no merit in this argument of the learned Counsel for the Petitione .....

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on 9 in respect of admission of a Petition filed by an Operational Creditor. - In view of the above discussion, this Petition is liable to be rejected and it is rejected under Section 9(5)(ii)(d) of the Code. - C.P. (I.B.) NO. 10/9/NCLT/AHM/2017 - Dated:- 5-5-2017 - BIKKI RAVEENDRA BABU, J. For The Petitioner : Kunal Sharma, Ld. CA and Rajesh Bohra, Ld. Adv For The Respondent : Mihir Thakore, Ld. Sr. Adv. and Sahil Shah, Ld. Adv ORDER 1. Gujarat State Cooperative Cotton Federation Limited [h .....

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at 18% p.a. till the date of payment of entire outstanding. 3. It is the claim of the Operational Creditor that it supplied cotton bales to the Corporate Debtor amounting to ₹ 142.56 Crores between 10.3.1998 to 24.6.2008 out of which an amount of ₹ 100.31 Crores up to 17.9.2008 has been paid. The outstanding principal amount payable to the Operational Creditor is ₹ 42.25 Crores. The Operational Creditor issued Demand Notice dated 27th March, 2017 as required by the Code to the .....

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efore this Adjudicating Authority on 28.4.2017. At the request of the learned Counsel appearing for the Operational Creditor, in order to enable him to file reply notice issued by the Corporate Debtor and the Rejoinder Notice issued by the Petitioner along with other documents and with a direction to rectify the mistakes if any by the next hearing date, the matter was listed on 1.5.2017. On 1.5.2017, additional documents were filed by Operational Creditor and Written Submissions were filed by Co .....

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pon letter dated 1st March, 2005 executed by the Managing Director of GUJCOT to STI India. (iii) After 2005-06 and 2006-07, no other payments were ever made by STI India to GUJCOT in relation to the amount claimed in the Demand Notice since the liability was transferred to STI Finance Ltd [ STI Finance for short]. In this connection, STI Finance, relied upon the letter dated 27th May, 2008 addressed by STI Finance to GUJCOT; letter dated 26th June, 2008 addressed by GUJCOT to STI Finance; letter .....

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% p.a. till date of payment is false and incorrect and is not according to the understanding reached between STI India and GUJCOT even before the liability was transferred from the books of STI India to STI Finance. In this connection, STI India has relied upon the letter dated 29th January, 2005 whereby the GUJCOT has categorically agreed to restrict the amount due from STI India to only the principal amount outstanding and to waive the interest and penalty with respect to the outstanding princ .....

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ees, Ahmedabad in Summary Lavad Case No. 214 of 2003 pertaining to the amounts claimed in the Demand Notice and the said Suit is pending. 6. It is clearly stated in the Reply Notice that STI India has no liability or debt towards GUJCOT in respect of the claim made in the Demand Notice. GUJCOT is not Operational Creditor of STI India. There exists dispute between STI India and GUJCOT in respect of the claims made in the notice. There exists Summary Lavad Case No. 214 of 2003 before the Board of .....

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s supplied cotton bales to the Corporate Debtor and an amount of ₹ 45 Crores towards Principal is due to it from STI India. The Petitioner has also placed on record the material to show that a default has occurred in repayment of the said amount. The crucial question is whether Petitioner is an 'Operational Creditor' in respect of STI India or not. Here, it is pertinent to refer to the plea of the Respondent, namely STI India that it has transferred its liability of payment of S .....

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rity for Industrial and Financial Reconstruction ( AAIFR ), New Delhi vide Appeal No. 45/2011. The Appellate Tribunal, AAIFR by its order dated 29th April, 2013 remanded the matter to the BIFR with a direction to take into consideration the reply of the appellant STI India on the report of OA etc., Thereafter, the proceedings went on before the BIFR till 25.3.2014, as can be seen from the material placed on record by the Petitioner. 11. In view of the coming into force of the Insolvency and Bank .....

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ted for transfer of liability of STI Finance. But as can be seen from the letter dated 18th December, 2008 the Board Meeting of GUJCOT did not approve such transfer of liability. Whatever it may be, the outstanding amount due to GUJCOT is payable by STI India or STI Finance is a dispute that has been raised by STI India even before the issuance of Demand Notice by Petitioner. 12. Here itself, it is pertinent to refer to the definition of 'dispute' in Section 5(6) of the Code. It reads as .....

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to waive the entire interest and penalty. This is also a dispute regarding the outstanding amount claimed by the Petitioner. 14. As can be seen from the Reply Notice, and as admitted by the Petitioner, a Suit was filed by GUJCOT before the Board of Nominees, Ahmedabad, vide Summary Lavad Case No. 214 of 2003 and it is pending. It is not an admitted fact that the amount claimed in the said Suit and the amount claimed in the Demand Notice is one and the same and it relates to supply of cotton bale .....

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n given by the Respondent to the Petitioner. 15. Sub-section (5) of Section 8 of the Code says that Adjudicating Authority shall by an order admit the Application if no notice of dispute is received by the Operational Creditor or there is no record of dispute in the information utility. This Adjudicating Authority can only admit the Application filed under sub-section (2) of Section 9 when there is no dispute regarding the amount claimed in the Demand Notice. This Adjudicating Authority has no j .....

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tor or Corporate Person, including claims by or against any of its subsidiaries situated in India. 17. This argument by the learned Counsel for the Petitioner needs to be answered by this Adjudicating Authority. Section 60 of the Code deals with the jurisdiction of the National Company Law Tribunal [ NCLT ] in relation to insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors. It says that the place of Registered Office of the Corporate Pe .....

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nsolvency resolution process or bankruptcy proceedings of a personal guarantor of such corporate debtor pending in a Court or Tribunal to the Adjudicating Authority dealing with Insolvency Resolution Process or liquidation proceedings of such Corporate Debtor. 19. Sub-section (4) of Section 60 says that National Company Law Tribunal is vested with all the powers of Debt Recovery Tribunal as contemplated under Part III of the Code for the purpose of deciding the insolvency resolution process or l .....

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all have jurisdiction to decide any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India. The words any claim referred to in Clause (b) of sub-section (5) of Section 60 relates to the stage after the admission of the Petition. 21. The provisions that govern the admission of a Petition for triggering the Insolvency Resolution Process by an Operational Creditor are contemplated in Section 9. Therefore, what is s .....

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