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Judgment
28.03.2025: This appeal has been filed against order passed by the Adjudicating Authority dated 13.08.2024 by which order the Adjudicating Authority has admitted Section 9 application.
Learned counsel for the Appellant submits that the application under Section 9 was dismissed for non-prosecution and was revived on 31.08.2023 without any notice to the Appellant. He submits that he was not aware of the revival although he was present in the Section 9 application when it was heard. He further submits that payments were made to the Operational Creditor and when the Appellant received complaints from clients then payments were stopped. Learned counsel for the Appellant further submits that now liquidation application is also pending for consideration.
We have considered the submissions of learned counsel for the Appellant and perused the record.
In so far as restoration of Section 9 application on 31.08.2023, the said order is not subject matter of challenge in this appeal and application having been restored, the Adjudicating Authority proceeded to hear the Section 9 application on merits with participation of the Corporate Debtor, hence, said reason is not a reason to interfere with the order impugned.
In so far as submission of the Appellant that he stopped payment after receiving complaints, the Adjudicating Authority has considered the defence and in Para 13 of the order made following observations:
“13.The Corporate Debtor, in its reply, has raised some disputes concerning the quality of goods and delays in delivery. However, there is no correspondence provided to substantiate these disputes. In addition, the demand notice which was sent in accordance with section 8 of the Code has not been responded by the Corporate Debtor. The defence of dispute taken by Respondent appears to be a moonshine defence. Therefore, these disputes cannot be classified as pre-existing dispute exists between the parties.”
Learned counsel for the Appellant lastly contended that Appellant is ready to pay the amount which was claimed in the Part IV of the Section 9 application. We are of the view that in so far as payment to the Operational Creditor is concerned that is matter of settlement between Appellant and the Operational Creditor. In event Appellant is able to settle with the Operational Creditor, proposal may be put before the CoC. It is always open for the Operational Creditor to file Section 12A application before the Adjudicating Authority. Subject to above liberty, we dismiss the appeal.