TaxTMI 
TaxTMI 
2025 (12) TMI 770
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....he corporate debtor ['the CD'], by appointing an Interim Resolution Professional. Aggrieved thereby, Mohammad Moinuddin Khan, a suspended director of the CD, filed Company Appeal (AT) (Insolvency) No. 22 of 2024 before the National Company Law Appellate Tribunal, Principal Bench ['the NCLAT'], New Delhi, under Section 61 of the IBC. By judgment dated 13.03.2024, the NCLAT allowed the said appeal and set aside the order of admission passed by the NCLT on the ground that there was a pre-existing dispute between the parties as to the firm's debt prior to institution of the application under Section 9 of the IBC. Hence, this appeal by the firm. 2. The CD is a licensed engineering company that carries out works on contract basis. It placed purchase orders on the firm for supply of pipes and cables for its projects. The CD maintained a running account and used to make payments to the firm on the strength of the invoices raised by it from time to time. While so, the firm communicated its ledger account to the CD under email dated 31.07.2021 and sought confirmation thereof. In response, the CD addressed email dated 04.08.2021, through its Accounts Manager, informing the firm of three po....
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....lakh towards non-supply of material under Invoice Nos. 203 and 205. 4. At this stage, we may note certain crucial facts: A separate CIRP had already been initiated against the CD, vide order dated 06.09.2021 passed in C.P.(IB)/244/MB-V/2020, an application filed under Section 9 of the IBC by M/s. Central Investigation and Security Services Limited, another operational creditor. Therefore, at the time the reply was furnished by the Technical Director of the CD to the firm's demand notice, that CIRP against the CD had commenced and an Interim Resolution Professional had taken over its management. In such a situation, the Technical Director of the CD, who stood suspended, had no authority to reply on its behalf. Further, it is an admitted fact that, even after issuance of the demand notice by the firm under Section 8 of the IBC, the CD continued to make payments to the firm and, in all, a sum of Rs.61 lakh was paid. 5. Upon initiation of the CIRP against the CD, the firm submitted its claim before the Interim Resolution Professional on 09.11.2021. In reply, the Interim Resolution Professional addressed letter dated 19.11.2021 stating that the firm had supplied sub-standard cable....
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....arties regarding the claim put forth by the firm. 8. Surprisingly, the NCLAT seems to have been kept in the dark about a separate CIRP having been initiated against the CD, vide order dated 06.09.2021, and the fact that there was no possibility of the firm initiating its own CIRP at that stage. As per procedure, the firm attempted to lodge its claim with the Interim Resolution Professional appointed in that CIRP and it was only upon coming to know of the filing of a withdrawal application in that CIRP that the firm filed its own application under Section 9 of the IBC. The delay on its part, therefore, could not be held against it. 9. Further, we find that though there were some exchanges between the parties in the years 2018 and 2019 on some issues regarding the supply of pipes and cables made by the firm, the same did not have the effect of stopping further supplies or further payments. This is clear from the ledger account of the firm maintained by the CD itself, which manifests continuous payments being made to the firm during the course of and even after the exchange of such correspondence. It is also an admitted fact that, after issuance of the demand notice under Sectio....
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....nvoice No. 205 from Palghar to Uttar Pradesh, duly indicating the registration number of the truck in which the pipes were loaded, is also produced. An issue is sought to be raised by the CD for the first time, by way of the written submissions now filed, as to the maximum weight that could be loaded in the truck, which seems to have been used to transport both consignments, but the transport bill dated 06.10.2019 reflects the entry 'full trailer' in the remarks column, which explains the so-called discrepancy sought to be projected by the CD at this belated stage. Further, it is hardly believable that the firm would have cooked up all these documents in the year 2019 in anticipation of this litigation years later. Thus, the plea of the CD that no supplies were made against these two invoices, prima facie, cannot be accepted. 13. As regards the issue of short/faulty supply of cables, it may be noted that under the CD's email dated 24.12.2018, there was no clear mention of the actual short supply, but a later email dated 03.07.2019 indicated that the short supply was approximately 20,000 meters. Thereafter, in the replies issued in November 2021, the short/faulty supply was shown....
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....by the company and a petition presented ostensibly for a winding up order but really to exercise pressure would be dismissed, and under circumstances may be stigmatized as a scandalous abuse of the process of the Court. This principle was followed thereafter in Madhusudan Gordhandas & Co. vs. Madhu Woollen Industries Pvt. Ltd. (1971) 3 SCC 632, Mediquip Systems (P) Ltd. vs. Proxima Medical System Gmbh (2005) 7 SCC 42 and again in Vijay Industries vs. NATL Technologies Limited (2009) 3 SCC 527. Applying the same principle in IBA Health (India) Private Limited vs. Info-Drive Systems Sdn. Bhd. (2010) 10 SCC 553, this Court observed that, in Mediquip Systems (P) Ltd. (supra), it was held that the defence must be substantial and not mere moonshine and held that if the debt is bona fide disputed, there cannot be 'neglect to pay' within the meaning of Section 433(1)(a) of the Companies Act, 1956, and the petition for winding up would not lie. 17. Coming back to the IBC regime, in Indus Biotech Private Limited vs. Kotak India Venture (Offshore) Fund and others (2021) 6 SCC 436, while dealing with a financial creditor's application under Section 7 of the IBC, a 3-Judge Bench of this Cour....