2021 (1) TMI 900 - AT - Insolvency and Bankruptcy

Operational Creditor's Application Granted on Appeal

MCC Concrete (Formerly Known as Mayfair Space Ltd.) Versus Northway Spaces Ltd.

MCC Concrete (Formerly Known as Mayfair Space Ltd.) Versus Northway Spaces Ltd. - TMI Issues:1. Rejection of application under Section 9 of the Insolvency and Bankruptcy Code by the Adjudicating Authority.2. Existence of a pre-existing dispute between the parties.3. Barred by limitation claim.4. Consideration of ledger accounts in determining operational debt exceeding &8377; 1 lakh.Analysis:1. The Appellant, an Operational Creditor, filed an appeal against the rejection of their application under Section 9 of the Insolvency and Bankruptcy Code by the Adjudicating Authority. The dispute arose from the non-payment of a balance amount by the Corporate Debtor despite several communications and a demand notice sent by the Appellant.2. The Corporate Debtor contested the application, claiming that certain invoices were erroneously issued and that there was a pre-existing dispute regarding the goods supplied. However, the Appellant argued that the disputed invoices were rightly sent as the Corporate Debtor and Mayfair Corporate Park were associated entities.3. The Adjudicating Authority found that the application was within the limitation period and that there was no pre-existing dispute based on the ledger accounts provided by both parties. The Appellant's ledger showed an outstanding amount due, while the Corporate Debtor's ledger indicated a lesser amount. The Authority considered the reliability of the ledger accounts and concluded that the application was fit for admission.4. The National Company Law Appellate Tribunal reviewed the ledger accounts and discrepancies between them. It was noted that certain items were missing in the Corporate Debtor's ledger, leading to a determination that an operational debt exceeding &8377; 1 lakh was due and payable. The Tribunal also emphasized the importance of considering the existence of a dispute at the time of admitting the application under Section 9 of the I&B Code.5. Ultimately, the Tribunal set aside the earlier order, remitting the case to the Adjudicating Authority for admission of the application under Section 9 of the I&B Code. The decision was based on the finding that the Corporate Debtor had failed to pay the outstanding amount exceeding &8377; 1 lakh, and there was no substantial pre-existing dispute between the parties.This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Tribunal's decision-making process in addressing each matter raised in the appeal.