TaxTMI 
TaxTMI 
2017 (3) TMI 1552
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....ode; 3. To cause a Public announcement of the initiation of Corporate Insolvency Resolution Process and calling for submission of claims under section 15 of the Code; and 4. To declare a moratorium in terms of section 14 of the Code. 2. In order to put the controversy in its proper perspective it would first be necessary to notice few material facts. The applicants have some claims against the Respondent and in pursuance of the order passed by Hon'ble High Court of Delhi Justice (Dr.) Mukundakam Sharma (Retd.) was appointed as Sole Arbitrator to adjudicate all disputes arising out of the lease deed dated 23.11.2005 between the applicants and respondents. It is pertinent to mention that respondent have changed their name and is now known as M/s. SORIL Infra Resources Limited-Respondent. The applicants claimed that applicants are 'Operational Creditor' and the Respondent is a 'Corporate Debtor' within the meaning of code. 3. The arbitrator passed an award on 9.9.2016 in favour of the applicants granting the following reliefs:- a. Rs. 2,67,52,283/- on account of rend from 1.4.2008 upto 22.3.2010 along with interest @ 12 % per annum w.e.f. 23.3.2010 up....
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....cy Law Reforms Committee Volume I: Rationale and Design and has argued that the report clearly brings out that the obligation to pay rent is certainly cover by the definition of expression 'Operational Creditors'. According to the learned counsel the expression 'Operational Creditor' used in section 5(20) and 5(21) of the Code must be construed to include the obligation to pay rent to the applicant as an 'Operational Creditor'. According to the learned counsel the definition of 'Operational Creditor' as adopted in section 5(20) of the Code is not exhaustive but it is illustrative as it is evident from the use of word 'include'. Mr. Nair has submitted that it is well settled principle of law that wherever the expression 'include' is used to define an expression then it has room to imply many other things as the definition is not exclusive. 7. Mr. Nair has then submitted that application u/s. 34 of the Arbitration Act cannot be regarded as continuation of arbitration proceeding because the arbitrator is the final judge of the facts and the High Court while hearing objections u/s. 34 is not expected to scrutinize the award as an appella....
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....y for commercial purpose is certainly a service and has value for the service receiver. In that regard reliance has been placed on para 22 of the Division Bench judgment rendered by the Punjab & Haryana High Court in the case of M/s. Shubh Timb Steels Limited v. Union of India and Another 2011 (1) ILR (Punjab & Haryana) 1008. Learned counsel has also placed reliance on the observations made by Division Bench of Gujarat High Court in the case of Cinemax India Limited v. Union of India MANU/GJ/1053/2011. 10. Mr. Nair further argued that pendency of appeal without any interim order would not constitute a bar for initiation of execution of the award because the main purpose of the Arbitration Act has been to provide a speedy remedy. In that regard learned counsel has placed reliance on the observations made in para 7 of the Division Bench judgment rendered by the Hon'ble High Court of Delhi in the case of Decor India Pvt. Ltd. v. National Building Consti. Corpon Ltd. 2007 (97) DRJ 428 (DB). 11. Mr. Chetan Sharma leaned counsel for the Respondent has made few preliminary submissions. According to him instant petition u/s. 9 of the Code per se is not maintainable because the Respon....
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....smissed on that score alone. 15. Mr. Sharma then submitted that on 27.1.2017 the Respondent served a notice under section 8(2) of the Code clearly pointing out that there is no default in terms of section 8(1) of the Code and has raised the dispute with regard to any such claim. Once there is a dispute raised then the Insolvency Process cannot be triggered in the face of section 8(2). Learned counsel has also pointed out that no affidavit in pursuance of section 9(3)(b) has been filed and no notice has been given by the 'Corporate Debtor' relating to a dispute of unpaid 'Operational Debt'. It has been maintained that such an affidavit could not have been filed in view of notice sent u/s. 8(2) dated 27.1.2017 disclosing the detail of pendency of appeal filed u/s. 37 which came up for hearing on 30.1.2017. Therefore the application is liable to be rejected. 16. Mr. Sharma has also submitted that there is deliberate suppression of material facts as notice dated 27.01.2017 disputing the demand raised by the applicant has not been disclosed and no disclosure has been made with regard to execution of the proceeding as per the prescribed performa (form V). Therefore on t....
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....cant to disclose any other fact. 20. Having heard the learned counsel for the parties and perusing the paper book with their able assistance we proceed to take up the issues raised before us. It is a classical case where dispute between the parties has already been subjected to arbitration proceedings which are yet to attain finality. The expression 'dispute' has been defined in section 5(b) of the Code and it must be read with section 8(1) & (2) thereof. It would thus be profitable to read the above mentioned provisions which are as under:- Definition 5. In this Part, unless the context otherwise requires,--' (6) "dispute" includes a suit or arbitration proceedings relating to-- (a) the existence of the amount of debt; (b) the quality of goods or service; or (c) the breach of a representation or warranty; Insolvency resolution by operational creditor. 8. (1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in the default to the corporate debtor in such form and manner as may be presc....
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....mentioned by the respondent in its reply dated 27.01.2017 sent under section 8(2) of the Code to the notice issued under section 8(1) of the Code by the applicant that the debt is disputed and appeal under section 37 of the Arbitration Act is pending. The reply dated 27.1.2017 reads as under:- "1. At the outset, kindly note that our client is disputing the existence of the 'operational debt' allegedly payable to you by our client. Our client is vigorously contesting the Award dated 9.9.2016 (Award) passed by Mr. Justice Mukundakam Sharma (Retd.), Sole Arbitrator, in Arbitration Case No. 3 of 2013, before the Hon'ble Delhi High Court. 2. As you are aware, our client had filed a petition under section 34 of the Arbitration and Conciliation Act, 1996 (Act) bearing No. OMP (Comm.) No. 570 of 2016, before the Hon'ble Delhi High Court vide order dated 19.12.2016. Please note that our client has filed an appeal against the said order under section 37 of the Act, bearing No. FAO(OS)(COMM) 20 of 2017, for setting aside the order dated 19.12.2016, and the same is presently pending adjudication before the Hon'ble Court. 3. In view of the above, plea....
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.... and even for additional award after the award has been announced. As already observed section 34 and section 37 of the Arbitration Act provide for setting aside of the award and the remedy of appeal. The appeal under section 37 of the Arbitration Act is still pending. The judgments of Bombay High Court has been rightly relied upon by the learned counsel for respondents. 26. The other judgment that no proceedings were pending on the date of issuance of demand notice in terms of section 8(1) of the Code is equally fallacious. Admittedly appeal under section 37 of the Arbitration Act could be preferred within 30 days against an order passed under section 34 of the Arbitration Act. Merely because no appeal was pending on 16.1.2017 when the respondent have time to prefer the appeal would not entitle the applicant to invoke section 9 of the Code. If that view is taken then extreme technicality would result in nullifying the remedy of appeal within 30 days provided by section 37 of the Arbitration Act. No reasonable person would take such a view. Thus the argument is wholly devoid of merit and therefore we have no hesitation to reject the same. 27. We are further of the view that alrea....
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....n was sought to be countered, on the other hand, by pointing out, that the opportunities provided by the legislature to assail the order(s) passed under the Patents Act, could not be reduced. In this behalf, it was submitted, that the remedies provided by the legislature, where a "revocation petition" is filed, were far in excess of the remedies, in case revocation was sought through a "counter-claim". The legitimate inference derived from the former submission, was thus equally legitimately, repudiated by the latter contention. Since no legitimate solution could emerge from the provisions of the Patents Act, it would be essential, to rely 26 on known principles of law, to resolve the issue. We shall therefore attempt to resolve the issue, on accepted principles of law. 24. A "counter-claim" for all intents and purposes, must be understood as a suit, filed by one who is impleaded as a defendant. A "counter-claim" is essentially filed to obstruct the claim raised in a suit. A "counter-claim" is tried jointly, with the suit filed by the plaintiff, and has the same effect as a cross-suit. Therefore, for all intents and purposes a "counter-claim" is treated as a plaint, and is ....