2020 (8) TMI 643 - AT - Insolvency and Bankruptcy

Tribunal Upholds Adjudicating Authority's Order under Insolvency & Bankruptcy Code

Mr. Mahendra Govindlal Agarwal Versus Taranjot Resources Pvt. Ltd, Dhanurdhar Processors Pvt. Ltd.

Mr. Mahendra Govindlal Agarwal Versus Taranjot Resources Pvt. Ltd, Dhanurdhar Processors Pvt. Ltd. - TMI Issues Involved:Appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 against the order dated 05.06.2020 passed by Adjudicating Authority in CP(IB) No.357/9/NCLT/AHM/2018.Detailed Analysis:1. Lack of Reasoning in Adjudicating Authority's Order:The Appellant contested that the Adjudicating Authority did not provide reasons for its conclusions and failed to address all issues raised by the parties. The Appellant emphasized the absence of a valid resolution from the Operational Creditor's Board of Directors supporting the Demand Notice and Petition. Furthermore, the Appellant highlighted a pre-existing dispute regarding the quality of coal supplied by the Operational Creditor, resulting in substantial losses for the Corporate Debtor.2. Validity of Operational Creditor's Petition:The Appellant argued that the Operational Creditor's petition lacked authorization from its Board of Directors, as no resolution was passed, and the Annual Return did not reference a crucial Board meeting. The Appellant also asserted that the Operational Creditor returned cheques issued by the Corporate Debtor due to disputes over the quality of coal supplied.3. Operational Creditor's Defense:In response, the Operational Creditor denied the coal quality issue, providing a certificate from a government-approved lab to support the quality of coal supplied. The Operational Creditor maintained that invoices were raised per delivery terms, and a demand notice was duly sent to the Corporate Debtor, with no response received.4. Adjudicating Authority's Observations:The Adjudicating Authority acknowledged the disputed principal amount but found the debt to exceed the statutory threshold, making it an admitted liability. Additionally, the Operational Creditor raised concerns about the alleged forging of signatures on a confirmation letter and the return of cheques by the Corporate Debtor.5. Judicial Review and Decision:The Tribunal thoroughly reviewed the submissions from both parties and the Adjudicating Authority's order. It emphasized the necessity of a reasoned judgment and noted that the issues were adequately addressed in the order. The Tribunal found no grounds to reject the Operational Creditor's application, as it was complete and in compliance with the I&B Code. Ultimately, the Tribunal upheld the Adjudicating Authority's order, dismissing the Appeal without costs.