Case Law Details
Allied Silica Limited Vs Tata Chemicals Limited (NCLAT)
The issue under consideration is whether the initiative of insolvency proceedings against Tata Chemicals is sustain even if the corporate debtor has not complied with the procedural aspects?
NCLAT states that, on perusal of the documents submitted by the parties, it is evident from the Letter dated 08.01.2019 which is signed by both the parties, that the Applicant had failed to complete the Tranche II Conditions Precedent as a result of which the Corporate Debtor had exercised its right under the BTA and set-off and adjusted the Tranche III payment of Rs 6,00,00,000/-. It is further evident from the Letter of Corporate Debtor dated 06.03.2019, wherein the Corporate Debtor had demanded a refund from the Applicant of Rs 15.01 Crores along with interest for violation of terms of Letter dated 08.01.2019 by the Applicant, in the same Letter the Corporate Debtor had also disputed that the Applicant is in non-compliance of the BTA and therefore is not liable to receive Tranche II and Tranche III payment under the BTA. These disputes by the Corporate Debtor are raised before the receipt of demand notices. Further, it is also pertinent to note that the Corporate Debtor had replied to the Demand Notices within the statutory period of 10 (Ten) days raising disputes with regards to the claim of Applicant and noncompliance of the BTA by the Applicant. Therefore, in the facts and circumstances of the present case, NCLAT are satisfied that there is a plausible contention in the defence raised by the corporate debtor which requires further investigation and that the alleged “dispute” is not a patently feeble legal argument or an assertion of fact unsupported by evidence. In the circumstances, NCLAT are of the considered opinion that the Ld. Adjudicating Authority has rightly dismissed the application filed under Section 9 of IBC. Thus, they do not find any reason to interfere with the impugned Order. There is no substance in Appeal which is accordingly dismissed.
FULL TEXT OF ORDER OF NATIONAL COMPANY LAW APPELLATE TRIBUNAL
1. This Appeal emanates from the Order dated 15 November 2019 passed by the Adjudicating Authority/National Company Law Tribunal, Mumbai Bench in CP No. 2953/NCLT/MB/2019, whereby the Adjudicating Authority has rejected the Insolvency Application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (in short ‘I&B Code’). The Parties are represented by their original status in the Company Petition and also in Miscellaneous Applications for the sake of convenience.
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