2018 (6) TMI 1682 - AT - Insolvency and Bankruptcy

Appellate Tribunal Protects Creditor Interests with Escrow Account Stay Order

Shipra Hotels Ltd. Versus Value Line Interiors Pvt. Ltd.

The National Company Law Appellate Tribunal, New Delhi, addressed the urgent matter raised by the appellant regarding disputes predating the notice under ... Service of SCN - appellant pointed out that the matter of disputes which are prior to the period of issue of notice under Section 8 or filing of application under Section 9 - Application admitted inspite of pre-existing disputes - HELD THAT:- In view of his offer to protect the interest of the operational creditor, offers to keep the amount of ₹ 42,58,844/- in the Escrow account is accepted, to be completed within next 3 days. Confirmation of the same be given to the Registrar of this Tribunal - in view of this offer which is made and the interest of Operational Creditor having been protected let the case be decided in the regular course in the Appellate Tribunal. In the meantime, order dated 01.06.2018 of the Adjudicating Authority will stand stayed till the next date of hearing - Post this matter for hearing on 10th July, 2018. Issues: Urgency in hearing the matter, disputes prior to notice under Section 8 or application under Section 9, admission of application causing irreparable damage, protection of interests of operational creditor, acceptance of offer to keep amount in Escrow account, stay of order passed by Adjudicating Authority, next date of hearing.The judgment by the National Company Law Appellate Tribunal, New Delhi, addressed the urgent matter raised by the appellant regarding disputes predating the notice under Section 8 or the application under Section 9. The appellant's counsel argued that despite pre-existing disputes, the Adjudicating Authority admitted the application, potentially causing irreparable harm. The appellant expressed willingness to protect the Operational Creditor's interests and offered to keep a specified amount in an Escrow account. The Tribunal accepted this offer, emphasizing the need for immediate protection. The Tribunal decided to proceed with the case in the regular course, acknowledging the offer made and the Operational Creditor's interests being safeguarded. Consequently, the Tribunal stayed the order passed by the Adjudicating Authority until the next hearing scheduled for 10th July 2018, ensuring a fair and just resolution of the matter. The Tribunal directed the completion of the Escrow account arrangement within the next 3 days and instructed confirmation to be provided to the Registrar of the Tribunal, maintaining transparency and accountability in the process.