Deposit proof and insolvency moratorium left the company appeal infructuous under the Companies Act and IBC.

The appellant failed to prove that the paid was a deposit credited to the respondent company so as to attract Section 73(4) of the Companies Act, 2013; the record instead showed payment to Kerala Trade Centre, treated as a separate entity, and the dismissal of the company petition on that ground was upheld. After the respondent entered corporate insolvency resolution process, the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 barred continuation of the appeal, and the claim was left to be pursued within the insolvency framework. The appellate proceedings were therefore rendered infructuous.

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Issues: (i) Whether the amount paid by the appellant was proved to be a deposit made with the respondent company so as to attract Section 73(4) of the Companies Act, 2013; (ii) Whether the appeal survived after the respondent company entered corporate insolvency resolution process and the moratorium under the Insolvency and Bankruptcy Code, 2016 came into force.

Issue (i): Whether the amount paid by the appellant was proved to be a deposit made with the respondent company so as to attract Section 73(4) of the Companies Act, 2013.

Analysis: The appellant failed to discharge the burden of proving that the amount was credited to the respondent company's account as a deposit. The material on record showed that the money was credited to the account of Kerala Trade Centre, which was treated as a separate entity. The receipt and accounting entries relied upon by the respondent also indicated that the transaction related to the project entity rather than the respondent company itself.

Conclusion: The claim under Section 73(4) of the Companies Act, 2013 was not established against the respondent company, and dismissal of the company petition on that ground was justified.

Issue (ii): Whether the appeal survived after the respondent company entered corporate insolvency resolution process and the moratorium under the Insolvency and Bankruptcy Code, 2016 came into force.

Analysis: Once the respondent company was admitted into corporate insolvency resolution process, the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 barred continuation of proceedings. The overriding effect of Section 238 of the Insolvency and Bankruptcy Code, 2016 also operated, while the appellant's claim was left open to be pursued in the insolvency framework under Section 30(2) read with Section 53(1) of the Insolvency and Bankruptcy Code, 2016.

Conclusion: The appeal had become infructuous in view of the insolvency proceedings and moratorium.

Final Conclusion: The challenge to the dismissal of the company petition did not succeed, and the appellate proceedings were rendered infructuous by the subsequent commencement of insolvency proceedings against the respondent company.

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