Paulose Nechupadam Construction Pvt. Ltd. vs Kerala State Electricity Board Limited

Heard the Learned Counsel for the ‘Petitioner’ / ‘Appellant’, in IA No.296/2024 (‘Condone Delay Application’, in ‘Re-filing’ / ‘Re-presentation’ of ‘Appeal Papers’) in Comp. App (AT) (CH) (Ins) No.108/2024.

According to the ‘Petitioner’ / ‘Appellant’, there had occasioned a ‘Delay of 27 days’, in ‘Re-filing’ / ‘Re-presentation’ of ‘Appeal Papers’, before the ‘Office of the Registry’.

The reason assigned on behalf of the ‘Petitioner’ / ‘Appellant’, in IA No.296/2024 in Comp. App (AT) (CH) (Ins) No.108/2024, is that upon perusing the ‘Defects’, pointed out by the ‘Office of the Registry’, the Learned Counsel for the ‘Petitioner’ / ‘Appellant’, took steps to cure the ‘Defects’, and that the ‘physical copies’, along with necessary corrections was sent to the Learned Counsel in Chennai, for ‘filing’. Later, the papers were ‘collated’, and ‘case papers’, were physically filed on 31.01.2024. But, the ‘Defects’, were not rectified in online portal.

Also, that the ‘Petitioner’ / ‘Appellant’, has come out with reasons that the Learned Counsel, has misplaced the Office Copy of the ‘case papers’, due to which, they had to reconstruct the ‘Appeal Papers’, from the available case papers in the ‘Registry’, in the ‘e-filing portal’, and in this process, there had occasioned a ‘Delay of 27 days’, in ‘Re-filing’ / ‘Re-presentation’ of the ‘Appeal Papers’, on 16.02.2024, which is neither wilful nor wanton, but due to the aforesaid reasons.

It is pointed out that the Delay in ‘Re-filing’ / ‘Re-presentation’ of the ‘Appeal Papers’, before the ‘Office of the Registry’, is purely a matter, between the ‘Petitioner’ / ‘Appellant’, and this ‘Tribunal’. In fact, the ‘Respondent’, has no say, in the matter.

Considering the fact, that the ‘Petitioner’ / ‘Appellant’, has assigned the ‘Reasons’, in Paragraph Nos.2.3 & 2.5 of IA No.296/2024 (Condone Delay Application in ‘Re-filing’ / ‘Re-presentation’ of ‘Appeal Papers’) in the instant ‘Appeal’, and on being subjectively satisfied as to the reasons ascribed on behalf of the ‘Petitioner’ / ‘Appellant’, this ‘Tribunal’, by taking a lenient and liberal view and not adopting an hyper-technical and pedantic approach, ‘Condones’, the ‘delay of 27 days’, in ‘Re-filing’ / ‘Re-presentation’ of ‘Appeal Papers’.

Accordingly, IA No.296/2024, in Comp App (AT) (CH) (Ins) No.108.2024 is ‘allowed’, No costs.

The ‘Appellant’ / ‘Petitioner’ / ‘Operational Creditor’, has preferred the instant Comp. App (AT) (CH) (Ins) No.108/2024, in respect of the ‘Impugned Order’, dated 05.12.2023 in CP(IBC)/19/KOB/2023 passed by the ‘Adjudicating Authority’ / ‘National Company Law Tribunal’, Kochi Bench for the dismissal under section 9 Application, filed by the ‘Appellant’ / ‘Operational Creditor’. The ‘Adjudicating Authority’ / ‘National Company Law Tribunal’, Kochi Bench, while passing the Impugned Order on 05.12.2023, envisaged in the CP(IBC)/19/KOB/2023 at Paragraph Nos.11 & 12, observed as under.

It is represented on behalf of the ‘Appellant’, that the above ‘Civil Works’, were carried out on behalf of M/s. Silcal Metallurgic Limited, at Respondent’s Bhoothathankettu work site, the Respondent’s owes a sum of Rs.11,81,50,595/- to M/s. Silcal Metallurgic Limited, which in turn, owes, the said amount to the ‘Appellant’. That apart, the Invoices, in respect of the execution, of the aforesaid ‘Civil Works’, were raised by the ‘Appellant’, on ‘M/s. Silcal Metallurgic Limited’ and the copies of the said ‘Invoices’, were furnished to the ‘Respondent’.

It is brought to the notice of this ‘Tribunal’, that M/s. Silcal Metallurgic Limited was ordered to be wound up, by an order of the Hon’ble Madras High Court dated 11.12.2006 in C.P. No.141/1999 and the said ‘Company’, is now under ‘Liquidation’, and that the ‘Liquidation proceedings’, are conducted by the ‘Official Liquidator’ of the Hon’ble Madras High Court.

The categorical stand of the ‘Appellant’, is that it took up the ‘issue’, of the ‘pending payments’ of the ‘Respondent’, on numerous occasions. But, the ‘Respondent’ / ‘Corporate Debtor’, took a stand that there was ‘no privity of contract’, between it and the ‘Appellant’. Hence, the ‘Appellant’, staked its ‘Claim’ before the ‘Official Liquidator’ and approached the ‘Hon’ble Madras High Court’ on 11.11.2014 and 11.01.2017 and directed the ‘Official Liquidator’, to adjudicate the ‘Claim’, filed before the ‘Appellant’.

It comes to be known that the Hon’ble Madras High Court, according to the ‘Appellant’, had issued directions to the ‘Liquidator’, through proceedings dated 07.09.2017, ‘adjudicated’, the ‘Claim of the Appellant’, against the company in Liquidation (M/s. Silcal Metallurgic Limited), in regard to the Civil Works carried out, for the benefit of the Respondent, to an extent of Rs. 11,81,50,595/-.

The Learned Counsel for the ‘Appellant’, contends that the ‘Appellant’, has made a request to the ‘Official Liquidator’, to take necessary steps for the recovery of the said amount to the ‘Respondent’, that the Official Liquidator, had not proceeded in the matter and hence, the ‘Appellant’, had approached the Hon’ble Madras High Court and by ‘Order’, dated 28.06.2019, in CA Nos.609 & 610/2018 in Company Petition No. 141/1999, the ‘Appellant’, was permitted to proceed against the ‘Respondent’, to realise the ‘Debt’, due from it to M/s. Silcal Metallurgic Limited, which in turn is due from M/s. Silcal Metallurgic Limited to the ‘Appellant’. Thus, the ‘Debt’, due from the ‘Respondent’, to the Company in ‘Liquidation’, was ‘Assigned’ / ‘Transferred’ to the ‘Appellant’, by the Hon’ble Madras High Court, for the purpose of ‘realising’, the same from the ‘Corporate Debtor’.

It is the contention of the ‘Appellant’, that it was substituted by the Hon’ble Madras High Court as an ‘Operational Creditor’, (envisaged under the Insolvency and Bankruptcy Code, 2016) in place of ‘M/s. Silcal Metallurgic Limited’, in respect of the aforesaid amount ‘due and payable’, by the ‘Respondent’, to ‘M/s. Silcal Metallurgic Limited’. In this regard, a copy of the ‘Order’, dated 28.06.2019, was forwarded to the ‘Respondent’, under the cover of the Appellant’s Letter dated 26.10.2019, demanding payment of sum of Rs.11,81,50,595/- is due from the ‘Respondent’, to the ‘Appellant’, as on the date of receipt of the said Notice dated 26.10.2019, as per the ‘Order’, of the Hon’ble Madras High Court.

The other contention, advanced on behalf of the ‘Appellant’, is that the ‘Demand Notice’, dated 01.12.2022, was issued in the ‘Form 3’ and the said Notice was received on 05.12.2022 but there was ‘no response’, to the said ‘Demand Notice’ nor as it raised any ‘Dispute’, in respect of the ‘Demand’.

According to the ‘Appellant’, the ‘Date of Default’, occurred on the ‘Respondent’ / ‘Corporate Debtor’, failure to make payment, upon receipt of the ‘Demand Notice’, dated 26.10.2019. Hence, the ‘Adjudicating Authority’ / ‘National Company Law Tribunal’, Kochi Bench, was not correct in arriving at the conclusion that the CP(IBC)/19/KOB/2023 filed by the ‘Appellant’ / ‘Operational Creditor’, is ‘not maintainable’ and ‘dismissing’, the Company Petition.

When a ‘query’, is raised to the Learned Counsel for the ‘Appellant’, by this ‘Tribunal’, as to whether ‘Petitioner’ / ‘Appellant’, comes within the purview of section 5(21) of the Insolvency and Bankruptcy Code, 2016 either directly or indirectly and whether the ‘Order’, (viz., Annexure A10 before the ‘Adjudicating Authority’ / ‘Tribunal’) , had mentioned that the ‘Petitioner’ / ‘Appellant’, could not be considered as an ‘Operational Creditor’, hence, this ‘Tribunal’, in a crystalline manner, that the ‘Appellant’, does not get a ‘status’, as an ‘Operational Creditor’.

The clear cut fact that emanates, in the instant ‘Appeal’, is that, however the ‘Petitioner’ / ‘Appellant’, is to ‘stake a Claim’, before this ‘Adjudicating Authority’ / ‘Tribunal’, as an ‘Operational Creditor’, is that he ought / owed the amount, either directly or through assigned of proceedings ascribed known of primordial fact that the permission assignment is not default in the Insolvency and Bankruptcy Code, 2016 and in fact the ‘Adjudicating Authority’ / ‘Tribunal’, in the ‘Impugned Order’, at Paragraph No.8 has clearly mentioned that the permission assignment is used in the ‘Law’ governing the ‘Contracts’, and it must be the ‘Substantial Claim’, by way of ‘Assignment’, etc.,

The ‘Respondent’ / ‘Corporate Debtor’, is not a party to the proceedings resulting in Annexure 8, 10, Order being passed against it and as per Annexure A4 Agreement dated 30.12.1994 or Annexure A5 Agreement. There is no plea for the Assignment of ‘Debt’, is seen.

The fact of the matter is that the ‘Assignment of Debt’, creates a ‘right’, to the ‘Assignee’, on the ‘Debt’, whereas ‘permission’ to sue, for realisation of ‘Debt’, from ‘Corporate Debtor’, is not a ‘Right’, on ‘Debt’.

Dealing with the plea that the ‘Respondent’ / ‘Corporate Debtor’, had ‘No Reply’, to the Section 8 Demand Notice of the ‘Petitioner’ / ‘Appellant’, yet non-Reply of the ‘Respondent’ / ‘Corporate Debtor’, will not accrue to the benefit of the ‘Petitioner’ / ‘Appellant’, in its ‘Claim’, against the ‘Respondent’ / ‘Corporate Debtor’. In the instant case, the ‘dispute’, raised by the ‘Respondent’, cannot be said to be a mere ‘Bluster’ or ‘Illusory’ or ‘Imaginary’ or ‘Moonshine’ one. When there is ‘no privity of contract’, between the ‘Appellant’ and the ‘Corporate Debtor’, and also, it comes to light on the arguments of the ‘Respondent’ / ‘Corporate Debtor’, had come with a stand that the ‘Adjudicating Authority’ / ‘Tribunal’, had terminated the Agreement with ‘Silcal’, on 08.09.2010.

Be that as it may, this ‘Tribunal’, is of the considered view that the ‘Petitioner’ / ‘Appellant’, has filed the instant CP(IBC)/19/KOB/2023 on the file of the ‘Adjudicating Authority’ / ‘Tribunal’, ‘not based on the merits of the matter’ and it is open to the Learned Counsel for the ‘Petitioner’ / ‘Appellant’, to approach the competent ‘Civil Forum’, for redressal of its grievances, of course, in the manner known to ‘Law’ and in accordance with ‘Law’, if so advised.

Looking at from any angle, the main CP(IBC)/19/KOB/2023 filed by the ‘Petitioner’ / ‘Appellant’, on the file of this ‘Adjudicating Authority’ / ‘Tribunal’, is ‘devoid of merits’ and accordingly, the instant ‘Appeal’, fails.

In fine, the instant Comp. App (AT) (CH) (Ins) No.108/2024 is ‘dismissed’. No costs.