TMI Blog2023 (2) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... orporate Debtor to the Appellant. In the light of the submissions and pleadings made by the Learned Counsel for Respondent No.2 and 3 and after seeing the material on record it is satisfying that the dispute raised on behalf of the Corporate Debtor company is not a moonshine dispute or a bluster. The Adjudicating Authority has rightly dismissed the Section 9 application of the Appellant and that the impugned order does not warrant any interference - Appeal dismissed. - Company Appeal ( AT ) ( Ins. ) No. 17 of 2022 - - - Dated:- 1-2-2023 - [Justice Ashok Bhushan] Chairperson And [Barun Mitra] Member (Technical) For the Appellant : Mr. Nilotpal Shyam, Advocate For the Respondents : Ms. Swati Dalmia, Mr. Indranil Ghosh, Mr. Orijit Chatterjee and Mr. Palzer Moktan, Advocates for R-2 R-3 JUDGMENT [ Per : Barun Mitra , Member ( Technical ) ] The present appeal filed under Section 61 of Insolvency and Bankruptcy Code, 2016 ( IBC in short) by the Appellant arises out of the Order dated 11.10.2021 (hereinafter referred to as Impugned Order ) passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi, Court VI) in CP (IB) No. 1840(ND) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in one month from the date of the order for its smooth running in accordance with the provisions of the Companies Act which has not been acted upon so far by them. Challenging the Impugned Order, it was submitted that the dues claimed by the Operational Creditor is lawful and there being no pre-existing disputes thereto, Section 9 application should have been admitted. 4. Advancing the rival contentions, the Learned Counsel for Respondents No. 2 and 3 submitted that that the Appellant and Respondent No. 2 had signed a Consultancy Agreement on 04.11.2013 by virtue of which the Appellant had agreed to provide certain services to Respondent No.2 to assist them in setting up an entity in India and for overseeing its operations. However, this fact had not been deliberately disclosed by the Appellant before the Adjudicating Authority. The Corporate Debtor/Respondent No. 1 had been subsequently incorporated on 11.02.2014 with 98.98% of the paid-up share capital of the Corporate Debtor/Respondent No.1 being held by Respondents No.2 and 3. Post incorporation of Respondent No. 1 company, the Appellant along with one Mr. K.K. Vashishtha ( KKV in short) were appointed as Directors of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said Consultancy Agreement of 04.11.2013. Elaborating further, it was stated that the Corporate Debtor company was engaged in the business of water testing and sanitation products and services related purchase, the Appellant violated various clauses of the Consultancy Agreement having engaged himself in the activities of a competing entity thus causing loss to the business of the Corporate Debtor. In addition, the Appellant had made excess withdrawals from the accounts of the Corporate Debtor aggregating to Rs.19,33,418/- purportedly on account of tour and travelling without supporting documents to substantiate such withdrawals. Pointing out at these pre-existing disputes, it was submitted that the present Section 9 application is not maintainable. 8. We have duly considered the detailed arguments and submissions advanced by the Learned Counsel for both the parties and perused the records carefully. 9. The main issues before us for our consideration are as follows: - (i) Whether the Section 9 petition filed before the Adjudicating Authority was a collusive petition; (ii) Whether in the given facts and circumstances of the present case the Respondents No. 2 and 3 are ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the Company Master Data besides taking initiative for a new Board of the Corporate Debtor company by calling extraordinary meeting of the Corporate Debtor in 2018 but was not allowed to do so by the majority shareholders. Be that as it may, on the date of issue of the said demand notice, the Appellant having admitted that both KKV and he had already tendered their respective resignations from the position of Director of the Corporate Debtor company with effect from 02.07.2017, it defies logic as to why the Appellant sent the demand notice at the given address at a time when the Board of Corporate Debtor had ceased to exist. 12. The other copy of the demand notice has admittedly been addressed to KKV who at that point of time had also resigned from the position of Director of the Corporate Debtor. The Appellant in spite of having full knowledge of the fact that KKV had already resigned, yet, addressed the demand notice to him which puts question marks on the bona-fide of the Appellant. Furthermore, we notice that when the Section 9 application was filed before the Adjudicating Authority, at which time KKV had already resigned as a Director, he still appeared before the Adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guard the rights and interests of the Corporate Debtor and their respective stakeholders given that the Appellant and KKV had in collusion foisted an abnormal situation by their resignation from the Corporate Debtor company causing a void and leaving none on the Board of Directors to defend the interests of Respondent No.1/Corporate Debtor company. To add to this, KKV was unauthorisedly representing the Corporate Debtor company before the Adjudicating Authority even after having submitted his resignation thus causing serious miscarriage of justice for the Respondent No.1. Hence, in the interest of justice, we are of the view that the present appeal filed before this Tribunal by Respondents No.2 and 3 deserves to be considered on merit. 14. Having answered items 9 (i) and (ii), we now proceed to examine whether there was any pre-existing dispute between the Appellant and the Corporate Debtor company. It has been submitted by Learned Counsel for the Respondents No. 2 and 3 that the Appellant had deliberately withheld information from the Adjudicating Authority about the Consultancy Agreement which had been signed between the Appellant and Respondent No. 2 on 04.11.2013. The Learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ior written consent of the Corporate Debtor company, the Consultant could not accept any engagement or employment or have any concern in any business which is similar to or in any way competitive with any of the businesses of the company or any group company. Further Clause 8.2 of the same agreement stipulated that the Consultant would indemnify the Respondent No.2 against loss and liabilities arising out of disregard by the Consultant of their duties and responsibilities. It may be useful to reproduce the said clause which is to the effect: 8.2 The Consultant hereby agrees to indemnify the Company and all Group Companies against all costs, claims, actions, demands, penalties and liabilities incurred in respect of or arising in connection: ***** ***** ***** 8.2.3 any intentional and conscious or reckless disregard by the Consultant of his duties or responsibilities. ***** ***** ***** 9.1 During the Term the Consultant shall not, without the prior written consent of the Company, accept any engagement or employment or have any concern in any business which is similar to or in any way competitive with any of the businesses of the Company or any Group Company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of notice of dispute, the Adjudicating Authority can reject the Section 9 Application if there is a record of dispute. 19. We are of the considered view that given the framework of Section 9 of IBC, the remit of this Tribunal is summary in nature and it therefore does not behove this Tribunal to undertake either the comparative examination of the areas of specialisation of Caya and the Corporate Debtor company or to enquire into the veracity of the emails. All that we observe at this stage is that a dispute centering around breach of fiduciary duty by the Appellant in the context of Consultancy Agreement has been raised by the Respondents as their defence against the claim of the Appellant which is evidenced from the material placed on record. 20. It has been further submitted by the Learned Counsel for the Respondent that the Appellant without prior authorisation had made excess withdrawals aggregating to Rs.19,33,418/- purportedly on account of tour and travelling without supporting documents to substantiate such withdrawals. The Appellant has contended that these averments have been made without any basis and valid proof. However, we see that material has been placed o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
