Sunday 25 October 2020

Harpreet Singh Ahluwalia vs. Eatigo India Pvt. Ltd. & Anr. - Disputed claim in application U/s 9.

 NCLAT (18.11.2019) in Harpreet Singh Ahluwalia Vs Eatigo India Pvt. Ltd. & Anr. [Company Appeal (AT) (Insolvency) No. 1150 of 2019] held  that even if the amount is disputed, if the claim is more than Rupees One Lakh, the Corporate Insolvency Resolution Process can be initiated.


Excerpts of the order;

18.11.2019: Respondent –‘Eatigo India Pvt. Ltd.’ filed application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as ‘I&B Code’) for initiation of Corporate Insolvency Resolution Process against ‘Liquid Glass Hospitality LLP’ (Corporate Debtor) which was admitted by impugned order dated 9th October, 2019 by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Mumbai.


# 2. Learned counsel for the Appellant submitted that there is a pre-existing dispute and referred to legal notice given by the Operational Creditor dated 19th December, 2018 to which the reply was given by the Corporate Debtor on 24th January, 2019. However, from the reply dated 24th January, 2019, we find that the Appellant has disputed the quantum of the payment but there is no dispute with regard to the service rendered by the Operational Creditor.


# 3. In “Innoventive Industries Ltd. Vs. ICICI Bank and Ors.” – (2018)1 SCC 407, the Hon’ble Apex Court observed as under:  

  • # 27  …..  For the meaning of “debt”, we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a “claim” and for the meaning of “claim”, we have to go back to Section 3(6) which defines “claim” to mean a right to payment even if it is disputed. The Code gets triggered the moment default is of rupees one lakh or more (Section 4).


# 4. From the aforesaid provision it will be evident that even if the amount is disputed, if the claim is more than Rupees One Lakh, the Corporate Insolvency Resolution Process can be initiated.


# 5. Learned counsel for the Appellant wanted time to settle the claim with Respondent. However, Mr. Nikhil Verma, appearing on behalf of the Interim Resolution Professional submitted that claim has been received and the Committee of Creditors has not been constituted. There is a Financial Creditor whose claim is Rs.9 Crore.


# 6. In fact and circumstances, we are not inclined to interfere with the impugned order passed by Adjudicating Authority. However, we allow the Appellant to settle the claim with all the claimants in terms of Section 12A of the I&B Code, if the Appellant so chooses.


# 7. The Appellant and other Promoters are directed to handover all the assets and records of the Corporate Debtor to the Interim Resolution Professional, immediately. Failing which, the Adjudicating Authority will take appropriate action against the Appellant/ Promoters of the Corporate Debtor and this Appellate Tribunal may initiate Contempt Proceeding for noncompliance of directions.


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The sole purpose of this post is to create awareness on the "IBC - Case Law" and to provide synopsis of the concerned case law, must not be used as a guide for taking or recommending any action or decision. A reader must refer to the full citation of the order & do one's own research and seek professional advice if he intends to take any action or decision in the matters covered in this post.

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