Appeal dismissed, upholding Adjudicating Authority's order on Section 9 application. Debt and default proven.

The appeal was dismissed, affirming the Adjudicating Authority's order admitting the Section 9 application. The Tribunal found that the debt and default were proven, with the Operational Creditor's claim exceeding Rs.1 crore, including both principal debt and interest. The application was held maintainable as the default occurred before the Section 10A period. The Corporate Debtor's procedural conduct, including failure to respond and attend hearings, led to an ex-parte decision against them, indicating an attempt to delay proceedings.

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Issues Involved:
1. Admission of Section 9 application.
2. Calculation of operational debt including interest.
3. Applicability of Section 10A of the Insolvency and Bankruptcy Code (IBC).
4. Procedural conduct and ex-parte proceedings.

Summary:

1. Admission of Section 9 Application:
The appeal was filed by the Suspended Director of the Corporate Debtor challenging the order dated 26.04.2023 by the Adjudicating Authority (National Company Law Tribunal), New Delhi, admitting the Section 9 application filed by the Operational Creditor. The Corporate Debtor and Operational Creditor had a Distributorship Agreement dated 20.07.2016, which included terms of payment and delivery. The Operational Creditor issued purchase orders and made advance payments, with a condition that delivery should be done within 90 days, failing which the advance would be returned with interest at 18% p.a. The Operational Creditor sent emails demanding amounts including interest and issued a demand notice under Section 8 dated 21.12.2020. The Corporate Debtor failed to reply, leading to the filing of the Section 9 application.

2. Calculation of Operational Debt Including Interest:
The Adjudicating Authority held that the debt and default were proved, and the Corporate Debtor failed to repay the amount. The Operational Creditor's claim included both the principal amount and interest, which exceeded the threshold of Rs.1 crore. The Tribunal referred to the judgment in "Company Appeal (AT) (Ins.) No. 690 of 2022, Prashant Agarwal vs. Vikash Parasrampuria & Anr.," which held that the total amount for maintainability of the claim includes both principal debt and interest on delayed payment stipulated in the invoice.

3. Applicability of Section 10A of IBC:
The Corporate Debtor argued that the application was barred by Section 10A since the demand notice was issued on 21.12.2020. However, the Tribunal clarified that the default occurred on 26.07.2018, which was before the 10A period, making the application maintainable.

4. Procedural Conduct and Ex-parte Proceedings:
The Corporate Debtor failed to file a reply despite being granted multiple opportunities and did not appear on the date fixed for hearing. The Adjudicating Authority proceeded ex-parte against the Corporate Debtor. The Tribunal found no error in the Adjudicating Authority's decision to admit the Section 9 application and dismissed the appeal, noting that the Corporate Debtor's conduct showed an attempt to delay the proceedings.

The appeal was dismissed, affirming the Adjudicating Authority's order admitting the Section 9 application.

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