The tribunal dismissed an application to initiate CIRP due to total debt failing the legal threshold after excluding Section 10A barred invoices, while holding that the unregistered status of the applicant did not bar the application.
Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE NATIONAL COMPANY LAW TRIBUNAL NEW DELHI BENCH-VI
IB-796/(ND)/2021
Section: Under Section 9 of the Insolvency and Bankruptcy Code, 2016 and Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority), Rules, 2016.
In the matter of:
M/S. BHARAT STEEL ROLLING MILLS UNIT-1
Registered Office At: 786/C, Govindpuri, Muzaffarnagar
...Applicant/Operational Creditor
Versus
M/S. REVITAL REALITY PRIVATE LIMITED
Registered Office At: 1114, Hemkunt Chambers 89, Nehru Place, New Delhi-110019
...Respondent/Corporate Debtor
Coram:
Shri. P.S.N Prasad, Member (Judicial) Shri.Rahul Bhatnagar, Member (Technical)
Counsel for Applicant : Mr. Satish Rai Counsel for Respondent : Ms. Gunjan Mittal
PATIBANDLA Digitally signed by PATIBANDLA RAHUL Digitally signed by RAHUL PRASAD SATYANARAYANA PRASAD SATYANARAYANA PRASAD Date: 2023.03.21 17:43:56 +05'30' PRASAD BHATNAGAR BHATNAGAR Date: 2023.03.21 11:01:59 +05'30'
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ORDER
PER: P.S.N PRASAD, MEMBER (JUDICIAL)
Date: 16.03.2023
PATIBANDLA Digitally signed by PATIBANDLA RAHUL Digitally signed by RAHUL PRASAD SATYANARAYANA PRASAD SATYANARAYANA PRASAD Date: 2023.03.21 17:45:17 +05'30' PRASAD BHATNAGAR BHATNAGAR Date: 2023.03.21 11:02:16 +05'30'
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ii. That Corporate Debtor, in the year 2017, being a well known name in the real estate industry and keen and desirous of purchasing T.M.T Steel bars for its new housing project, contacted Operational Creditor for discussion on the supply of goods and after being satisfied with the price and quality of the goods, Corporate Debtor placed various orders for purchase verbally in favour of Operational Creditor for supply of T.M.T Steel Bars at their sites situated at Affordable Group Housing "The Valley" Sector 78, Gurgaon, Haryana. 4.
iii. That believing the Corporate Debtor's assurances to pay the invoice amount within the stipulated time, the Operational Creditor has been regularly supplying the goods in terms of the orders received verbally from the Corporate Debtor during the period w.e.f. year 2017 till year 2021 and hence fulfilled their part of obligation of the contract.
iv. That the Operational Creditor has recorded all transactions entered with Corporate Debtor as running account and for better accounting purposes
PATIBANDLA SATYANARAYANA PRASAD Digitally signed by PATIBANDLA SATYANARAYANA PRASAD Date: 2023.03.21 17:45:31 +05'30' RAHUL PRASAD BHATNAGAR Digitally signed by RAHUL PRASAD BHATNAGAR Date: 2023.03.21 11:02:25 +05'30'
IB-796/ND/2021
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maintained a separate ledger accounts for goods supplied at sites situated at Gurgaon.
v. That during the period 01.04.2017 to 31.02.2022, upon receipt of verbal orders for purchase, operational creditor supplied the goods total amounting to Rs. 10,54,06,643/- and against which corporate debtor made a part payment amounting to Rs. 8,58,17,545/-. After adjusting the above received amount against the running account, the closing balance amount of Rs. 1.95.89.098/- is still lying outstanding and remains unpaid till date.
vi. That upon receipt of the goods supplied under the issued invoices, ever since receiving the goods and till date, the Corporate Debtor has not raised any dispute/objection with regard to the quantity and specifications as ordered and also with regard to the quality of the supplied goods and has used the same for their business purposes. The Corporate Debtor has also not raised any dispute at any point of time with respect to up-paid debt amounting to Rs.
1.95.89.098/- . Since the Corporate Debtor has failed
PATIBANDLA Digitally signed by PATIBANDLA RAHUL Digitally signed by RAHUL PRASAD SATYANARAYANA PRASAD SATYANARAYANA PRASAD Date: 2023.03.21 17:45:47 +05'30' PRASAD BHATNAGAR BHATNAGAR Date: 2023.03.21 11:02:35 +05'30'
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to clear the payment as agreed within 15 days upon presentation of the lnvoice, the Operational Creditor is entitled receive an interest @12% per annum on principle amount as agreed in the terms of invoices.
vii. That the Operational Creditor sent the demand
notice in Form-3 on 30.09.2021 in compliance of Section 8(1) of the lnsolvency and Bankruptcy Code, 2016 seeking principle amount of Rs. 1,95,89,0981 along with an interest of Rs. 13,41,2181- total amount amounting to Rs. 2,09,30,316/- at the registered office of the Corporate Debtor which has been duly received by the Corporate Debtor at its respective address on 01.10.2021. Upon receipt of notice dated 30.09.2021 sent through speed post, no reply has been furnished by the corporate debtor and hence the instant Company Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the lnsolvency and Bankruptcy (Application to Adjudicating Authority Rules, 2016 is preferred by the Operational Creditor through its Proprietor against the Corporate Debtor.
PATIBANDLA SATYANARAYANA PRASAD Digitally signed by PATIBANDLA SATYANARAYANA PRASAD Date: 2023.03.21 17:46:05 +05'30' RAHUL PRASAD BHATNAGAR Digitally signed by RAHUL PRASAD BHATNAGAR Date: 2023.03.21 11:02:47 +05'30'
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PATIBANDLA SATYANARAYANA PRASAD Digitally signed by PATIBANDLA SATYANARAYANA PRASAD Date: 2023.03.21 17:46:20 +05'30' RAHUL PRASAD BHATNAGAR Digitally signed by RAHUL PRASAD BHATNAGAR Date: 2023.03.21 11:03:04 +05'30'
IB-796/ND/2021
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agreed nor does it form a part of the oral purchase orders or invoices or otherwise.
PATIBANDLA RAHUL Digitally signed by RAHUL PRASAD SATYANARAYANA PRASAD Digitally signed by PATIBANDLA SATYANARAYANA PRASAD Date: 2023.03.21 17:46:36 +05'30' PRASAD BHATNAGAR BHATNAGAR Date: 2023.03.21 11:03:13 +05'30'
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6. An application under Section 9 of IBC cannot be said to be a suit and analogy of Hon’ble Supreme Court judgment in Hargovindbhai Dave’s case, supra, is fully applicable to the application filed under Section 9 IBC also. Further, also it is well settled by the judgment of the Hon’ble Supreme Court in B.K. Educational Services (P) Ltd. v. Parag Gupta and Associates, (2019) 11 SCC 633 that provision of Section 5 Limitation Act are also fully applicable in Section 7 & 9 IBC applications. Section 5 Limitation Act is not applicable in a suit which is also a clear indication that Application under Section 7 & 9 are not a suit.
7. The Judgments of Hon’ble Supreme Court relied by the Adjudicating Authority regarding bar of Section 69(2) is not attracted in the present case since the application under Section 9 cannot be treated as suit.
PATIBANDLA Digitally signed by PATIBANDLA RAHUL Digitally signed by RAHUL PRASAD SATYANARAY SATYANARAYANA PRASAD Date: 2023.03.21 17:46:55 PRASAD BHATNAGAR Date: 2023.03.21 ANA PRASAD +05'30' BHATNAGAR 11:03:23 +05'30'
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8. We are thus of the view that the Adjudicating Authority has committed error in rejecting Section 9 Application on the ground that it is barred by 69(2) of the Partnership Act. We are thus in view that the order impugned cannot be sustained and deserves to the set aside.
Therefore, it is clear that the bar under Section 69(2) of the Indian Partnership Act, 1932 would not apply to Applications filed under IBC, 2016.
PATIBANDLA Digitally signed by PATIBANDLA RAHUL Digitally signed by RAHUL PRASAD SATYANARAYANA PRASAD SATYANARAYANA PRASAD Date: 2023.03.21 17:47:14 +05'30' PRASAD BHATNAGAR BHATNAGAR Date: 2023.03.21 11:03:36 +05'30'
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between 25.03.2020 to 24.03.2021. The default with respect to the invoices dated 30.10.2020-07.03.2021 occurred on the lapse of 15 days from the date of such invoices thereby, falling within the period specifically barred by Section 10A, IBC, 2016. Further, excluding these invoices, the remaining invoices dated 21.03.2021-22.07.2021 amounting to Rs. 68,64,820 (Sixty Eight Lakh Sixty Four Thousand Eight Hundred and Twenty) including interest fail to meet the threshold limit of Rs. 1 Crore u/s 4, IBC, 2016. Therefore, the said Application is not maintainable.
filed under Section 9 of the IB Code, 2016.
RAHUL Digitally signed by RAHUL PRASAD PRASAD BHATNAGAR BHATNAGAR Date: 2023.03.21 11:03:48 +05'30'
PATIBANDLA Digitally signed by PATIBANDLA SATYANARAY SATYANARAYANA PRASAD ANA PRASAD Date: 2023.03.21 17:47:46 +05'30'
(Rahul Bhatnagar) (P.S.N Prasad) Member (Technical) Member (Judicial)
IB-796/ND/2021
1
2 issues framed by the court
Whether an unregistered partnership firm is barred from filing an application under Section 9 of the Insolvency and Bankruptcy Code, 2016.
Whether the remaining operational debt meets the threshold limit under Section 4 of the Insolvency and Bankruptcy Code, 2016 after excluding invoices barred by Section 10A.
Colour shows how this judgement treated each authority
Rourkela Steel Syndicate vs. Metistech Fabricators Pvt. LtdReferred¶7
Rourkela Steel Syndicate vs. Metistech Fabricators Pvt. Ltd. Company Appeal (AT)(Insolvency) No. 924 of 2022
B.K. Educational Services (P) Ltd. v. Parag Gupta and AssociatesExplained¶7
B.K. Educational Services (P) Ltd. v. Parag Gupta and Associates, (2019) 11 SCC 633 · Who else cites this
5 provisions across 3 enactments
M/S. BHARAT STEEL ROLLING MILLS UNIT-1
P.S.N PRASAD
RAHUL BHATNAGAR
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
