Sajan Kumar Satish Kumar vs Archon Powerinfra India Pvt. Ltd.

17.11.2022 This appeal is against the order dated 26.04.2021 by which an Application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (in short ‘Code’) read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (in short ‘Rules’) was dismissed on the ground that the Demand Notice was not served by the authorised person.

In short, the Appellant is a Partnership firm, namely, Sanjan Kumar Satish Kumar. Anant Kumar Aggarwal is a partner of the Appellant firm as per the partnership deed dated 02.04.2001 who had served the demand notice claiming Rs. 86,60,361/- including interest @ 12%. The Respondent replied to the Demand Notice and denied its liability.

The Appellant filed an Application under Section 9 of the Code on 27.08.2019 with an authority letter, executed by the firm, authorising Anant Kumar Aggarwal to sign all the documents required to be filed with the application in the NCLT against the present Respondent.

The said application was dismissed on 26.04.2021 only on the ground that Anant Kumar Aggarwal was not duly authorised by the Firm for serving the demand notice because the authority letter, attached with the Application filed under Section 9 of the Code, was undated. The Tribunal observed that it is not clear as to whether the authority letter was prepared before the Demand Notice was served or at the time when the application under Section 9 of the Code was filed.

Counsel for the Appellant has submitted that the authority letter is required for filing the Application under Section 9 of the Code but it is not required to serve the demand notice. It is further submitted that the Demand Notice has been signed by one of the partners of the firm and as per the provision of Section 25 of the Partnership Act, 1932 (in short ‘Act, 1932’) all the partners of the firm are jointly and severally liable. It is argued that Ld. Tribunal has committed an error in presuming that the authority letter, attached with the Application filed under Section 9 of the Code, was not available at the time when the Demand Notice was issued because the same is undated.

On the other hand, Counsel for Respondent has argued that even if Anant Kumar Agarwal is a partner of the firm and served the Demand Notice, still was required to have the authority letter and in this regard, she has referred to Form-3, prescribed in Rule-5 of the Rules to contend that it is provided therein that the person who has signed the Demand Notice should have the signing authority. It is further argued that the Appellant has otherwise given the liberty to file fresh proceedings.

We have heard Counsel for the parties and perused the records.

As per the case set up by the Respondent, the Demand Notice was issued in May, 2019, in which there is no reference of authority given to Anant Kumar Agarwal, who is the signatory of the Demand Notice but there is no denial to the fact that Anand Kumar Agarwal is the partner of the firm which is pursuing its remedies before the Tribunal against the Corporate Debtor and as per Section 25 of the Act, 1932 all the partners are jointly and severally liable for the acts of the firm done while as a partner.

There is no doubt that there is an authority letter also which has been made part and parcel of the Application filed under Section 9 of the Code but the only issue that has been raised is that the same authority letter does not contain the date.

In our considered opinion, the Ld. Tribunal has committed a patent error in discarding the authority letter simply on the ground that it seems to be manufactured after the Demand Notice was issued whereas it can be assumed that it was there before the Demand Notice was served and was inadvertently not mentioned in the said Demand Notice. The Tribunal cannot reject the Application filed under Section 9 of the Code merely on conjectures and premises. The Application under Section 9 of the Code has been duly filed by the firm along with the authority letter in favour of Anant Kumar Agrawal for presenting the same before the Tribunal. The demand notice was served at the instance of the Partnership Firm in which all the Partners are jointly and severally liable and the application was filed, at the instance of firm before the Tribunal by the Partner who served the Demand Notice. There is no application that he has acted against the interest of the firm and that too without consent of the other partners.

In view of the aforesaid facts and circumstances, we are of the considered opinion that the Tribunal should not have dismissed the application on the technical issue. Consequently, the appeal is hereby allowed and the impugned order is set aside. The matter is remanded back to the concerned Tribunal to decide it again on merits.

The parties are required to appear before the concerned Tribunal on 14^th December, 2022 but it is made clear that while disposing of this Appeal, we have not touched any aspect of the merit of the case.