Author: Khushi J Prajapati
The National Company Law Tribunal, Mumbai held that it is empowered to adjudicate disputes arising from the insolvency of a corporate debtor, including claims for recovery of dues admitted by a creditor.
The National Company Law Tribunal (NCLT) Mumbai Bench discovered that the Respondent, NTPC Limited, had recognized a debt of INR 12,36,28,455/- toward the Corporate Debtor, Petron Engineering Construction Limited. This recognition was evidenced by an email dated 04.06.2022, and there was no dispute over this particular figure.
In court observation, the NCLT remarked that Section 60(5) of the IBC provides a non-obstante clause, which gives exclusive jurisdiction to the NCLT to adjudicate disputes arising out of the insolvency process.
In this regard, the Tribunal referred to the Supreme Court’s judgment in Gujarat Urja Vikas Nigam Ltd v. Amit Gupta (2021) 7 SCC 209, which held that all disputes concerning corporate debtor insolvency should fall within the ambit of NCLT.
The NCLT directed NTPC Limited to pay the Corporate Debtor the recognized amount of INR 12,36,28,455/-.
The Tribunal maintained that such payment was a prerequisite for liquidation proceedings.
The Tribunal said that the accepted amount was under the jurisdiction of the NCLT as per section 60(5) of the IBC. The Tribunal granted the Liquidator permission under section 33(5) of IBC to initiate appropriate legal proceedings for any outstanding dues beyond the admitted amount.
FACTS
The Respondent allowed two Work Orders dated 12.07.2013 to the Corporate Debtor for the supply of electrical devices as well as installation and erection services about them. As per the agreement, running account (RA) billing was done by the Corporate Debtor in which there was a retention of 10% by the Respondent from the amounts billed.
Upon account reconciliation, an amount of INR 12,34,01,237 was accepted by the Respondent as still owing to the Corporate Debtor. Subsequently, in this regard, CIRP against Corporate Debtor was initiated by NCLT Mumbai Bench on 23rd March 2018 which ultimately failed resulting in liquidation order on January 23rd, 2020.
The liquidator in this case was the Applicant who made an application under Section 60(5) read with Section 35(1)(b), (d) & (n) of Insolvency and Bankruptcy Code 2016 (IBC) together with Rule 11 of NCLT Rules 2016 seeking direction from Adjudicating Authority for Respondent to release Amount Payable Of Rs.22,-72-62-756/- Plus Interest At 18% Per Annum As Stipulated In Work Orders Of 12th July 2013. The argument is over the recovery of such amounts during the liquidation process.
Case Details
Interlocutory Application No. 3453 of 2022 In Company Petition (IB) No. 1374 (MB)/2017
Applicant: Vineet K. Chaudhary, Liquidator
Respondent: NTPC Limited
Operational Creditor: Kohinoor Crane Service
Corporate Debtor: Petron Engineering Construction Limited
Judges – Shri. Kuldip Kumar Kareer, Member Judicial and Shri. Anil Raj Chellan, Member Technical
Order Pronounced On: 23.07.2024
