National Company Law Tribunal

National Company Law Tribunal, Mumbai Bench, Mumbai- The Coram of Ashok Kumar Borah, Judicial Member, and Shyam Babu Gautam, Technical Member while allowing the company petition, ordered for initiation of Corporate Insolvency Resolution Process (CIRP). The Bench stated that,

“The Operational Creditor has successfully demonstrated and proved the debt and default in this case and has also proved that there is absolutely no reason for the Corporate Debtor to hold on to the payment of the invoices”.

In the present matter initiation of Corporate Insolvency Resolution Process (CIRP) against Prince MFG Industries Private Limited (Corporate Debtor) was sought for, alleging that the corporate debtor committed default in making payment to the operational creditor. This petition was filed by invoking the provisions of Section 9 Insolvency and Bankruptcy Code, 2016 read with Rule 6 of Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016.

The Tribunal after considering the statements, acts and the submissions was of the opinion that despite giving enough chances, the corporate debtor did not file its reply, showed that the amount was due and payable. Also the acts and the tactics used also elaborated the intention. The Tribunal considering the contradicting statements where a part payments was made and then later denying any pre-existing dispute, it was of the view that,

“This bench clearly visualizes the tactic played on the part of the Corporate Debtor to delay the proceedings”.

The Tribunal was thus of the opinion, “It is observed by this bench that the part payment made by the Corporate Debtor proves that it owes the claimed amount to the Operational Creditor and hence it is deemed to be an admission on the part of the Corporate Debtor”. And further stated, “Hence this Bench is left with no option except to admit the above Company Petition, since the above Company Petition in hand satisfies all necessary legal ingredients for admission under Section 9 of the Code”.

[Amit Sangal v. Prince MFG Industries Private Ltd., IA No. 1509/2021, decided on-05-10-2021]

Agatha Shukla, Editorial Assistant has reported this brief.

Counsel for the parties:

For the Operational Creditor:

Mr. Anuj Solanki, Practicing Company Secretary, Mr. Rajesh Agarwal, Advocate

For the Corporate Debtor :

Mr. Dinesh Dubey, Advocate

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