Summary of Opinion — Company Appeal (AT) (Insolvency) No. 150 of 2017

Court: National Company Law Appellate Tribunal, New Delhi

Date: 20 November 2017

Parties: Appellant: Paramjeet Singh (Director of M/s International Coil Limited) — Respondents: Maxim Tubes Company Pvt. Ltd. & another

Bench: Justice S.J. Mukhopadhaya (Chairperson); Justice Bansi Lal Bhat; Justice A.I.S. Cheema (Members)

Factual and Procedural Background

This appeal was filed by Paramjeet Singh challenging the Adjudicating Authority's (NCLT, Special Bench, New Delhi) order dated 16 August 2017 in (IB)-120(PB)/2017. The impugned order had admitted an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, imposed a moratorium and appointed an Interim Resolution Professional (IRP). The appellant contended that there existed a dispute and produced certain letters to support that contention; the respondent objected, alleging that the letter was forged and produced a communication from M/s Mundra Solar Power (Adani) denying issuance of the letter. The Tribunal did not decide the forgery allegation.

Legal Issues Presented

1. Whether the Adjudicating Authority's admission of the Section 9 application (and consequent moratorium and appointment of IRP) should be interfered with in light of the appellant's contention that a pre-existing dispute exists.
2. Whether the document(s) produced by the appellant (allegedly indicating a dispute) are genuine or forged, and if so, whether that affects admission under Section 9.

Arguments of the Parties

Appellant's Arguments

• The appellant asserted the existence of a dispute between the parties and placed certain letters on record to substantiate that claim.

Respondent's Arguments

• The respondent contended that the letter produced by the appellant was forged and that the appellant should be liable for punishment for producing a forged document.
• The respondent placed on record a communication from M/s Mundra Solar Power (Adani) stating that no such letter was issued in favour of the appellant.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Tribunal's analysis proceeded on the statutory framework and the factual record before it:

1. The operational creditor had issued a notice under subsection (1) of Section 8 of the I&B Code to the Corporate Debtor.
2. Despite receipt of that Section 8(1) notice, the Corporate Debtor did not dispute the claim nor submit any reply under subsection (2) of Section 8 within the ten-day period prescribed by the statute.
3. The Section 9 application was filed in Form 5 and it specifically stated that "no objection has been filed by Corporate Debtor" under Section 8(2).
4. Given the absence of any specific evidence on record demonstrating a legitimate pre-existing dispute (and in particular, in light of the corporate debtor's failure to file the statutory response within ten days), the Tribunal was not inclined to interfere with the Adjudicating Authority's order admitting the Section 9 application.
5. The Tribunal expressly refrained from deciding whether the document relied upon by the appellant was forged, noting that the appeal was disposed of for the reasons stated above.

Holding and Implications

APPEAL DISMISSED

Consequences and implications:

• The impugned NCLT order dated 16 August 2017 (admission of the Section 9 application, imposition of moratorium and appointment of the IRP) stands affirmed.
• No costs were imposed ("No cost").
• The Tribunal did not decide the separate factual question of whether the document produced by the appellant was forged; that question remains unanswered in this opinion.
• The decision was based on the statutory non-response under Section 8(2) and the absence of specific evidence to establish a dispute; the opinion does not purport to establish a new legal precedent beyond its application to the facts before the Tribunal.