(M.R. Shah and B.V. Nagarathna, JJ.)
ZNK Traders Pvt. Ltd. ____________________________ Appellant;
v.
Kishore Shankar Signapurkar and Another __________ Respondent(s).
Civil Appeal No. 4804 of 2019, decided on December 13, 2021
The Order of the court was delivered by
Order
1. We have heard Ms. S. Janani, learned counsel appearing for the appellant and Mr. Manu Yadav, learned counsel appearing for the respondent(s) at length.
2. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 29.01.2019 passed by the National Company Law Appellate Tribunal (for short the âNCLATâ), New Delhi in Company Appeal (AT) (Insolvency) No. 739 of 2018 by which the NCLAT has allowed the said Appeal preferred by the respondent herein-Corporate Debtor and by quashing and setting aside the order passed by the National Company Law Tribunal (the âNCLTâ for short), Mumbai admitting Section 9 of the IBC, the original appellant has preferred the present Appeal.
3. At the outset, it is required to be noted that, by the impugned judgment and order, the NCLAT has set aside the order passed by the NCLT admitting Section 9 application solely on the ground that much prior to issuance of the Demand Notice under Section 8(1) of the Insolvency and Bankruptcy Code, 2016 the âCorporate Debtorâ raised the question of standard of goods supplied by the âOperational Creditorsâ upto 05.08.2017. However, it is required to be noted that the dispute with respect to the inferior quality was taken by the Corporate Debtor much belatedly after the transaction between the parties and the same was taken for the first time in the reply to the notice under Section 138 of the N.I. Act. No such dispute was taken by the Corporate Debtor till the cheques were issued which came to be dishonoured and till the proceedings under Section 138 of the Negotiable Instruments Act were initiated. The aforesaid aspect has not been properly appreciated by the NCLAT. Under the circumstances, the impugned order passed by the NCLAT is unsustainable.
4. At this stage, learned counsel appearing on behalf of the respondents – original appellant – Corporate Debtor has submitted that, in fact, number of other points were also raised before the NCLAT but the NCLAT has not considered any other issues/submissions/grounds.
5. In view of the above, we allow the present Appeal. The impugned judgment and order passed by the NCLAT dated 29.01.2019 passed in Company Appeal (AT) (Insolvency) No. 739 is hereby quashed and set aside and the matter is remitted back to the NCLAT to decide the said Appeal afresh in accordance with law and on its own merits.
6. All the contentions and/or defences, which may be available to the respective parties, however, excluding the dispute raised by the respondent(s)-Corporate Debtor with respect to the inferior quality of the goods, are kept open to be considered by the NCLAT in accordance with law and on its own merits.
7. The present Appeal is allowed to the aforesaid extent. No costs.
SUPREME COURT OF INDIA
RECORD OF PROCEEDINGS
Civil Appeal No(s). 4804/2019
ZNK Traders Pvt. Ltd.âŚ.Appellant(s)
v.
Shri Kishore Shankar Signapurkar & Anr.âŚ.Respondent(s)
(Mediation report received from Mediation centre.
IA No. 69775/2019 – EX-PARTE STAY)
Date : 13-12-2021 This matter was called on for hearing today.
(Before M.R. Shah and B.V. Nagarathna, JJ.)
For Appellant(s) Ms. S. Janani, AOR
For Respondent(s) Mr. Manu Yadav, Adv.
Mr. Divyakant Lahoti, AOR
Mr. Parikshit Ahuja, Adv.
Ms. Praveena Bisht, Adv.
Ms. Madhur Jhavar, Adv.
Ms. Vindhya Mehra, Adv.
Mr. Kartik Lahoti, Adv.
Ms. Shivangi Malhotra, Adv.
Mr. Jaigopal Saboo, Adv.
UPON hearing the counsel the Court made the following
ORDER
8. The present Appeal is allowed in terms of the signed order.
9. Pending applications, if any, stand disposed of.
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