Zhejiang Industrial Group Co. Ltd vs Al Badr Seafoods Private Limited
CA (AT) (Ins) 272 of 2023
Facts:
1.Operational Creditor’ (Zhejiang Industrial Group Co. Ltd.) filed an application under Section 9 of the Code against Al Badr Seafoods Private Limited (Corporate Debtor) which was dismissed by the NCLT Kochi Bench vide order dated 03.05.2023 after noting that the default committed to pay amount as per the settlement agreement is not an operational debt.
2.Appellant (Zhejiang Industrial Group Co. Ltd.) has filed the appeal challenging the order of NCLT.
Issue: Whether the order passed is correct ?
Arguments:
Appellant:
1.Counsel for Appellant submitted that before the NCLT kochi Bench it was averred that Debt’, originated from the Purchase of Frozen Precooked Skip Jack Tuna Loins’ (Goods’) by the Corporate Debtor’ from the Appellant / Petitioner / Operational Creditor’.
2.Counsel for the Appellant, contended that the Corporate Debtor’, through its Associate Enterprise’ namely Al Badr Sarl – a Tunisian Entity’, proposed to release’ the Outstanding Debt’ in Instalments. Indeed, the Appellant / Operational Creditor’, with a view to resolve the matter, in an amicable manner, accepted the Proposal’ of the Corporate Debtor’ and its Associate Enterprise’, and a Settlement Agreement’, dated 16.07.2020, was drawn between the Operational Creditor’, Al Badr Sarl’ and the Corporate Debtor’
3.Counsel for the Appellant, points out that Al Badr Sarl’ and the Corporate Debtor’, had extended only the false promises and assurances, to clear the Overdue Instalments’ and Al Badr Sarl’, through its email dated 28.12.2020, among other things, had requested further time, to release payment, in respect of `Overdue Instalments’, on the pretext of Market situation.
For Respondent:
1.Counsel for Respondent in its Reply’, to main CP (IB) / 45 / KOB / 2022, had denied the Execution of Settlement Agreement’, dated 16.07.2020, by it, in the capacity of Confirming Party’, and in fact, the Respondent / Company, had no knowledge of any such Agreement’, at the time, it was entered nor any Board Resolution’, was ever passed, which gave the Signatory’ any Authority’, to sign this Agreement’. That apart, the name of the Signatory’, was not mentioned in the Agreement, thisAgreement’, is not `binding’ on the Respondent.
2.Counsel submitted that Application’, under Section 9 of the I & B Code, 2016, can only be filed on the Occurrence of Default’, and in the instant case, there isany Debt’, which becomes due’, towards the Appellant / Petitioner nor the other elements of making anApplication’, under Section 9 of the Code, were fulfilled.
Decision: NCLAT upheld the decision of NCLT.
Rationale:
1.Hon’ble Tribunal noted that It is to be remembered that an insufficiently stamped Original Document’ or an Unstamped Document’, can be impounded’, and on behalf of the Appellant / Petitioner’, before the Adjudicating Authority’ /Tribunal’, a photocopy of the `Instrument / Document’, was projected and hence this Tribunal’, safely and securely holds that the Noncompliance’ of the ingredients of the Indian Stamp Act, 1899’, the Kerala Stamp Act, 1959’, result in these documents not to be enforceable in `Law’.
2.Tribunal held that Suffice it for this Tribunal’, to relevantly point out that the real Date of Default’, fell during the Suspended Period’, to initiate the CIRP Proceedings’, against the concerned, under the `I & B Code, 2016.
Order Copy:
