TMI Blog2021 (8) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... ority. In view of the provision in Section 65 (1), we feel that Adjudicating Authority is the correct forum to agitate this issue and we desist from commenting any further on this matter. On a close perusal of documents submitted by the operational creditor and other parties lead us to the conclusion that the application u/s 9 was not submitted within limitation and it contained documents of doubtful origin which do not inspire confidence, and which formed the basis of admission order. The allegations of collusion between the Operational Creditor and the corporate debtor raise reasonable doubt. Documents filed to hold debt was due, or payable do not raise confidence. Initiation of CIRP of a company which is a going concern, on the basis of a short defence note without a proper reply/defence called from the corporate debtor, and based on such documents attached with the admission application is certainly not proper and defeats the purpose and intent of the IBC in letter and spirit. The Interim Resolution Professional/Resolution Professional shall hand back charge of Corporate Debtor. Adjudicating Authority will pass orders regarding fees to be paid to Interim Resolution Profes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant Rishima has claimed that application under Section 9 of IBC was filed by Respondent No. 3 UICL at the behest of, and in collusion with, Respondents No. 1 and 2 Sarga Hotel and SIDCL respectively, with malafide intention to frustrate the Appellant Rishima s rights arising out of a final arbitration award dated 12.07.2020, partial award dated 30.04.2019 and under the Share Subscription and Shareholders Agreement dated 07.08.2008 (hereinafter called SSHA) and its Addendum dated 31.08.2008. The Appellant Rishima has claimed to be a 35% shareholder and Respondent No. 2 SIDCL is 65% shareholder of the corporate debtor Sarga Hotel with both being financial creditors of the corporate debtor Sarga Hotel. 4. In CA (AT) (Ins.) No. 892 of 2020, the Appellant SIDCL has submitted that the debt in default claimed by Respondent No.2 UICL as operational creditor is barred by limitation as the related invoices pertain to the years 2014 to 2016. He has further argued that no opportunity was given to the corporate debtor to file a proper reply in defence which tantamount to denial of natural justice, and the Impugned Order was passed in haste. He has claimed that the proceedings under IBC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a foreign country were not notarized/apostilled as required under law. He has also alleged that the document placed on record is a single-page board resolution of Operational Creditor UICL appointing Rabindra Kumar Jha as authorized representative for pursuing the case under IBC and while the document is in English it is signed in a foreign language with no authorized English translation provided. 8. Expanding on his arguments, the Ld. Counsel for Rishima has alleged that application under Section 9 of IBC was filed on 22.7.2020 when the Corporate Debtor Sarga Hotel and SIDCL were faced with a final arbitral award and were seeking to somehow subvert the process of execution of the arbitral award. In furtherance of this objective, the operational creditor made a request for urgent mentioning in his application u/s 9 vide email dated 9.8.2020 to the Registry of NCLT, Kolkata Bench. On 10.8.2020, the Registry of NCLT Kolkata Bench directed the Corporate Debtor to forward a short Defence Note of 15-20 lines. Such a note, it is claimed by him, was sought by the Registry without the urgent mentioning having taken place and without any orders after mentioning passed by the Adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perational creditor UICL has denied the allegations of Rishima stating that the allegations made by Rishima are baseless and it had received purchase orders from the Corporate Debtor pursuant to which it supplied the said marble slabs of specified dimensions. Thereafter it raised multiple bills/invoices during the years 2014 to 2016 and a running and continuous account was maintained regarding the payments. It has added that the last payment was made by the corporate debtor on 7.6.2017 and after adjusting the payments received by the operational creditor from the corporate debtor, a principal amount of US$ 324,021.71 (US Dollars Three Lakh Twenty Four Thousand Twenty One and Cent Seventy One only) due and payable by the Corporate Debtor, which amounts to ₹ 2,30,06,458.39 (Rupees Two Crore Thirty Lakh Six Thousand Four Hundred Fifty Eight and Paise Thirty Nine only) being the exchange value of the debt due and payable as on date of issue of statutory demand notice. He has claimed to have sought payment on several occasions without success. 14. The Operational Creditor UICL has further claimed that having come to know from various sources that the corporate debtor was trying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Appellant Rishima that the documents that are attached with the demand notice and application u/s 9 were sent by the operational creditor UICL BY HAND/FAX , but no transmission or receipt report is attached with any of the documents. 20. The Operational Creditor has relied on a document titled details of payment (attached at pg. 118 of the Appeal Paperbook in CA(AT) No. 800 of 2020) to show that the application u/s 9 which was filed on 21.7.2020 is within limitation of three years since the last payment was made in 2017. The statement purported to be details of payment does not mention of the particulars of the payee or the payer, nor there is a title and signature to it. This document appears to be of doubtful origin and it does not inspire confidence. It cannot be taken to extend limitation for the debt in default. 21. Two letters sent by the corporate debtor dated 9th January 2018 and 10th January 2018 (attached at pp. 78-79in the Appeal Paperbook of CA (AT)(Ins) No. 892 of 2020) are purportedly sent by the corporate debtor but there is neither a receipt stamp of this letter nor any indication of the date of its receipt. These letters are of importance as they are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ma has raised the issue of collusion between corporate debtor and SIDCL in filing of the IBC application to stall the execution of the arbitral award. The dispute between Rishima and SIDCL on one hand, and Rishima and corporate debtor on the other, do not concern us insofar as these appeals regarding admission of application under section 9 is concerned. The cited disputes can only lend credence to the allegation of the Appellant Rishima that the operational creditor and the corporate debtor (who are related as both are connected with the Kanoria Group) colluded to stall the execution of the arbitral award by bringing the Section 9 application and the enforcement of moratorium after its admission. 27. An argument placed before us by the Appellant is the way the application for urgent mentioning by the operational creditor vide email dated 10.8.2020 sent to the Registry of the NCLT was dealt. The NCLT Registry immediately replied to the operational creditor asking for a Defence Note in 15-20 lines within 24 hours, for consideration. It is quite surprising that even when the mentioning had not been made before the NCLT, the NCLT Registry presumed that the mentioning would be about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DCL. Insofar as proceedings under this provision is concerned, Hon ble Supreme Court has held in the case of Swiss Ribbons (P) Ltd. v. Union of India [(2019) 4 SCC 17: 2019 SCC Online SC 73]: 59. What is also of relevance is that in order to protect the corporate debtor from being dragged into the corporate insolvency resolution process mala fide, the Code prescribes penalties. Section 65 of the Code reads as follows: 65. Fraudulent or malicious initiation of proceedings - (1) If, any person initiates the insolvency resolution process or liquidation proceedings fraudulently or with malicious intent for any purpose other than for the resolution of Insolvency, or liquidation, as the case may be, the Adjudicating Authority may impose upon such person a penalty which shall not be less than one lakh rupees, but may extend to one crore rupees. (2) If, any person initiates voluntary liquidation proceedings with the intent to defraud any person, the Adjudicating Authority may impose upon such person a penalty which shall not be less than one lakh rupees but may extend to one crore rupees. 32. The IBC provides for action u/s 65 of IBC against the person who initiates ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
