The National Company Law Appellate Tribunal (NCLAT), New Delhi, a three-member bench comprising Justice S.J. Mukhopadhaya, Chairperson, Justice A.I.S. Cheema, Judicial Member and Kanthi Narahari, Technical Member was hearing an interesting Appeal of an Operational Creditor who did not accept the amount claimed itself by them from the Corporate Debtor. The Bench further found that the Appellant (Operational Creditor) had returned back the demand draft submitted by the Corporate Debtor for the claimed amount. The three-member bench observed, "the Appellant initiated ‘corporate insolvency resolution process’ with fraudulently and malicious intent for any purpose other than the resolution of insolvency or liquidation and, therefore, it was clearly covered under Section 65 of the I&B Code.
The present Appeal was preferred by the Appellant, who claimed to be an Operational Creditor of the Corporate Debtor, against the order passed by the Adjudicating Authority, whereby the Adjudicating Authority rejected section 9 Application under the Insolvency and Bankruptcy Code, 2016 preferred by the Appellant.
The respondent-Corporate Debtor appeared and took the plea that it was willing to process the invoices raised by the petitioner (Appellant herein) subject to the condition that the petitioner (Appellant herein) got himself registered under the GST Act, 2017. It was also averred that by virtue of an agreement between the parties, the remedy for a dispute was available under the Trading Member and authorised ‘Person Agreement’ and that as per the provisions of the GST Act, 2017 it is applicable.
Considering that the Respondent (Corporate Debtor) was ready to pay the amount subject to the process of the GST, the Adjudicating Authority refused to entertain the application under Section 9 of the I&B Code.
The Counsel appearing on behalf of the respondent submitted that the Respondent was not a ‘corporate person’ within the meaning of Section 3(7) of the I&B Code. In spite of the same, it had come out with the Demand Draft dated 5th March 2019 bearing No. 000356 issued by the HDFC Bank in favour of ‘Peenus Investments’ (Operational Creditor) for Rs. 3,36,978.48, which was the total claimed amount shown in the petition under Section 9 of the I&B Code.
The Counsel for the Appellant submitted that the Appellant was not ready to accept the Demand Draft for Rs.3,36,978.48 as no such offer was made on the date when the application was filed before the Adjudicating Authority. It was further submitted that the application under Section 9 of the I&B Code was not filed to recover the amount.
From the impugned order, the Appellate Authority found that the amount was deposited with the ‘Operational Creditor’ but the ‘Operational Creditor’ returned back the amount. It was noted, that the Respondent had taken a plea before the Adjudicating Authority that it was agreeable to pay the amount subject to the registration of the ‘Operational Creditor’ under the ‘GST Act, 2017’. It was further found that before the admission of the application, the Respondent was ready with the draft for Rs.3,36,978.48. However, the Appellant was not inclined to accept the same.
From the action mentioned above of the Appellant - ‘Operational Creditor’, the Appellate Authority observed that the Appellant initiated ‘corporate insolvency resolution process’ with fraudulently and malicious intent for any purpose other than the resolution of insolvency or liquidation and, therefore, it was clearly covered under Section 65 of the I&B Code.
For the reasons aforesaid, the Appellate Authority was not inclined to interfere with the impugned order. The appeal was dismissed.