2018 (8) TMI 1958 - AT - Insolvency and Bankruptcy

Supreme Court Upholds Insolvency Application under Section 9

The Supreme Court upheld the original order admitting applications under Section 9 of the Insolvency and Bankruptcy Code, 2016, filed by Macquarie Bank ... CIRP Process - Application for clarification as to how the period of 180 days to be computed of completing the ‘Resolution process’ - common Appellant has taken the plea that as per agreement reached between the parties, they have agreed to be governed by English law and, therefore, the Respondent was barred from initiating the proceeding under ‘I&B Code’ - HELD THAT:- Such plea cannot be accepted in view of substantive provisions of ‘I&B Code’ as it is always open to the Respondent to file application under Section 9 of “I&B Code’, if there is debt and default. Merely because there is a provision of arbitration in the agreement, cannot be ground to hold that there is an existence of dispute. The other ground taken by the Appellant is that the Respondent was to prove the payment. A plea has been taken that all the transactions entered between the parties within the credit cycle of 180 days which is still substantive in view of invoices and, therefore, no amount is due as on date - HELD THAT:- Such plea cannot be accepted in view of the fact that there is an admitted debt in pursuance of invoices raised by Respondent, the Appellant has not paid the amount and defaulted. The Corporate Insolvency Resolution Process initiated stands restored - Time consumed because of pendency of appeals before this Appellate Tribunal and the Hon’ble Supreme Court be excluded for the purposes of counting the period of 180 days/270 days. The Resolution Profession will continue from the stage it was stopped due to order of this Appellate Tribunal. Issues:1. Admittance of applications under Section 9 of the Insolvency and Bankruptcy Code, 2016.2. Appeal before the Hon'ble Supreme Court and subsequent remittance.3. Calculation of the 180-day period for completing the resolution process.4. Additional arguments presented by the Appellant.5. Request for adjournment and refusal by the Tribunal.6. Grounds for dismissal of appeals.7. Restoration of the Corporate Insolvency Resolution Process.Analysis:1. The Respondent, Macquarie Bank Ltd., filed applications under Section 9 of the Insolvency and Bankruptcy Code, 2016, which were admitted by the Adjudicating Authority. However, the Appellate Tribunal set aside the orders dated 24th May, 2017, leading to subsequent appeals and challenges.2. The Respondent appealed to the Hon'ble Supreme Court, resulting in the restoration of the original order passed by the Adjudicating Authority. This led to a petition for clarification on computing the 180-day period for completing the resolution process, which was addressed by the Appellate Tribunal.3. The Appellate Tribunal issued notices and directed the Resolution Professional to continue the process from the stage left pending due to the Tribunal's order. The Tribunal granted time for arguments and subsequent adjournments, emphasizing the importance of addressing the issues promptly.4. Despite requests for adjournments and lack of instructions from the Appellant's counsel, the Tribunal delved into the merits of the appeals. The Appellant raised grounds related to the governing law, payment proofs, and maintainability of the appeals through the suspended Board of Directors.5. The Tribunal dismissed the appeals on the grounds of non-maintainability and lack of merit. It emphasized that the existence of a dispute cannot be solely based on an arbitration provision in an agreement. Additionally, the failure to pay the admitted debt within the credit cycle led to the dismissal of the appeals.6. Furthermore, the appeals were deemed not maintainable as they were filed by the Corporate Debtor through suspended Board of Directors, citing a judgment by the Hon'ble Supreme Court. Consequently, the Corporate Insolvency Resolution Process was restored, with the exclusion of time consumed during the appeals for counting the 180-day period. The Resolution Professional was directed to continue the process as per the law.This detailed analysis of the judgment highlights the procedural history, legal arguments, and the Tribunal's decision on various issues involved in the case.