Application u/s 9 of IBC against Appointment of IRP: NCLAT remands Matter for Reconsideration [Read Order]

The New Delhi bench of the National Company Law Appellate Tribunal ( NCLAT ) remanded the application filed under section 9 of the Insolvency Bankruptcy Code (IBC) for the resolution of its debt against the Corporate Debtor has been admitted, and appointment of the Interim Resolution Professional (IRP).

The Tribunal set aside the order and remanded the matter back to the Tribunal to have a relook into the entire matter after considering all the documents on record and by-passing a speaking order.

Dr. Ghanshyam Bhambhani Suspended ManagingDirector of Cardiac Care and Allied Health Pvt. Ltd, the appellant challenged the order dated 11.09.2024, passed by the NCLT, Jaipur by which CP (IB) No. 19/JPR,2023 filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 ( ‘Code’) by Operational Creditor, namely, Ace Cardiopathy Solutions Pvt. Ltd. for the resolution of its debt against the Corporate Debtor, namely, Cardiac Care and Allied Health Pvt. ltd. has been admitted and Satendra Prasad Khorania was appointed as the Interim Resolution Professional (IRP).

The counsel for the Appellant has submitted that an amount of Rs. 179,98,948.93/- has been deposited by the Appellant by way of a demand draft in the name of the Registrar of the court. It was submitted that the CD had set up the defence of a pre-existing dispute between the parties which has been rejected by the Tribunal only considering the letter dated 24.09.2022 and not the other correspondence between the parties in which the said dispute was highlighted and hence it was not a moonshine defense; rather, it was a defence based on which the application filed under Section 9 would not have been maintained.

In addition, the counsel for the appellant has submitted that the Respondent / OC was regularly supplying medical consumables to the Appellant/CD which is a hospital situated at Jaipur. It is the case of the Appellant/CD that there were certain objections raised by ECHS about the supply of stents. In this regard, the Appellant/CD received a letter dated 18.08.2022.

It was alleged that the Appellant/CD had sent a letter to Respondent/OC on 28.08.2022 raising a dispute about the supply of tainted material. It is submitted by the Appellant that no reply to the letter was given by Respondent/OC whereas the Appellant received other information from ECHS on 09.09.2022.

Further, the appellant’s counsel has submitted that the CD received a demand notice dated 11.02.2023 under Section 8 of the Code which was duly contested by way of a reply dated 03.03.2023, but thereafter, the application under Section 9 came to be filed by the OC.

It was further asserted that the OC did not choose to file any counter to the aforesaid affidavit and the letter dated 28.08.2022 which was brought on record by an affidavit which also escape the notice of the Tribunal in which the Appellant has, in so many words, raised a dispute about the quality of the material being supplied by the OC to the CD.

It is argued by the Appellant/CD that had the letter also been taken into consideration, a/w letters dated 18.08.2024, 09.09.2022, and 09.12.2022, the Tribunal would not have concluded that the defence set up by the Appellant/CD is a moon shine defence and has to be ignored.

On the other hand, Counsel for Respondent/OC has vehemently argued that there is no defect or error in the impugned order which calls for any interference by the court because the letter dated 24.09.2022 was duly replied by Respondent and the text of the letter dated 24.09.2022 is only with the modality of the payment, etc., and not regarding the discrepancies as alleged by the Appellant.

It has further argued that the additional affidavit with which the letter dated 28.08.2022 is stated to be placed on record is in fact not placed on record. It is also submitted that the affidavit is dated 21.03.2024, whereas the next date before the Tribunal was 22.03.2024 in which it is not reflected in the order that the said affidavit filed by the Appellant was taken on record. It is also submitted that even in the written submissions filed by the CD before the Tribunal there is no reference of the affidavit dated 21.03.2024, therefore, the entire argument of the Appellant is an afterthought which has been raised to wriggle out of the order passed by the Tribunal by which the application filed under Section 9 has rightly been admitted.

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It was submitted that once the document dated 28.08.2022 was on record then it was incumbent upon the part of the Tribunal to have considered the said document in order to hold that as to whether the defence set up by the CD was a moon shine defence or a genuine one.

For the purpose of contesting the application under Section 9, the defence available to the CD are that there is pre-existing dispute and that payment has already been made but it cannot be taken for the first time in reply to the demand notice and has to be there before demand notice is served by the OC and reply to the demand notice is filed.

Once the letter dated 28.08.2022 has been brought on record by way of an additional affidavit and the copy of the affidavit was given to the OC which is not denied, Respondent should have come forward to contest the said affidavit and the letter dated 28.08.2022 and the Tribunal should have taken into consideration the said letter dated 28.08.2022 to determine as to whether because of the letter dated 28.08.2022 there was any pre-existing dispute between the parties for denying the admission of the application filed under Section 9 of the Code.

The bench of Justice Rakesh Kumar Jain, Member (Judicial), Justice Mohammad Faiz Alam Khan, Member (Judicial) and Mr. Naresh Salecha, Member (Technical) viewed that there is an error in the impugned order of not considering not only the letter dated 28.08.2022 but also the letters dated 18.08.2022, 09.09.2022 and 09.12.2022 which are the basis for the letter written by the CD on 28.08.2022 in which the CD had raised the issue regarding the goods supplied to the hospital by the OC and which was pointed out repeatedly by Government vide their letter dated 18.08.2022, 09.09.2022 and 09.12.2022.

The Tribunal set aside the order and remanded the matter back to the Tribunal to have a relook into the entire matter after considering all the documents on record and by-passing a speaking order.

Further it was directed that the amount deposited by the Appellant, in terms of the order passed by this Court on 17.09.2024, shall be returned by the Registrar within one month from the date of passing of this order to the Counsel for the Appellant.

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