The National Company Law Tribunal (“NCLT”), Ahmedabad comprising of Mr. Shammi Khan (Judicial Member) and Mr. Sameer Kakar (Technical Member) adjudicating a petition filed in Bharat Road Carrier Pvt Ltd. v. Rasna Pvt Ltd. admitted the petition to initiate Corporate Insolvency Resolution Process (CIRP) against Rasna Pvt Ltd. (Corporate Debtor). It held that the Corporate...
The National Company Law Tribunal (“NCLT”), Ahmedabad comprising of Mr. Shammi Khan (Judicial Member) and Mr. Sameer Kakar (Technical Member) adjudicating a petition filed in Bharat Road Carrier Pvt Ltd. v. Rasna Pvt Ltd. admitted the petition to initiate Corporate Insolvency Resolution Process (CIRP) against Rasna Pvt Ltd. (Corporate Debtor). It held that the Corporate Debtor’s argument as to the dispute appears to be a moonshine since it has not been able to justify the cause and reasons behind the dispute to the Operational Creditor.
Background Facts:
On 24.09.2019, Bharat Road Carrier Pvt Ltd. (Operational Creditor) filed a petition to initiate a CIRP against the Corporate Debtor for an outstanding operational date of Rs. 71,27,442/- plus interest on service tax and interest on unpaid amount as of 31.03.2019. The Operational Creditor has submitted various dates of defaults for the transportation of various goods from April 2017 to August 2018. The Demand notice was issued on 20.08.2018 and acknowledged by the Corporate Debtor, however, despite repeated reminders the debt remains unpaid.
The Corporate Debtor admitted availing the transportation services from the Operational Creditor, however, contended that there is a pre-existing dispute i.e. a civil suit against the transportation services provided by the Operational Creditor before the notice was issued in the instant Petition filed under Section 8 of the Insolvency and Bankruptcy Code, 2016 (Code).
NCLT Verdict:
The NCLT Ahmedabad admitted the petition to initiate CIRP against the Corporate Debtor and imposed a moratorium under Section 14 of the Code. It noted that though civil proceedings were initiated post the issuance of the demand notice, however, the outcome of the said proceedings was not brought under consideration by the parties. The Tribunal held that the Corporate Debtor’s argument as to the dispute appears to be a moonshine since it has not been able to justify the cause and reasons behind the dispute to the Operational Debtor.
The Tribunal pointed out that the Corporate Debtor cannot take shelter under Section 10A of the Code since the threshold of its default is above Rs. 1 Lakh and as the petition was filed in 2019 when the pecuniary limit to initiate CIRP was Rs. 1 Lakh.
The NCLT also appointed Mr. Ravindra Kumar Goyal as the Interim Resolution Professional.
Case Title: Bharat Road Carrier Pvt Ltd. v. Rasna Pvt Ltd.
Case No.: CP(IB) 317 of 2019
Counsel for Operational Debtor: Mr. Sanyam Jain, Advocate
Counsel for Corporate Debtor: Ms. Aishwarya Reddy, Advocate
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