Shuchi Sharma vs M.P. Mining and Energy Ltd

Heard learned counsel for the Appellant. This Appeal has been filed against order dated 24.08.2022 by which order Section 9 application filed by the Appellant was rejected. Appellant claiming to be the Operational Creditor filed Section 9 application with the case that Appellant has issued a purchase order on 26.06.2017 and advanced Rs.23 Lakh, out of which Rs.10 Lakh was returned and still there is balance amount of Rs.13 Lakhs. The Adjudicating Authority after hearing the parties came to the conclusion that it is case which has been collusively filed and Corporate Debtor, Appellant and proprietor of M/s Space Traders were all closely related to each other. In Para 9 of the judgment following observations have been made:

“9. No doubt, on 22.01.2018 and 31.03.2018 an amount of Rs.10,00,000/- was stated to be returned by the Respondent/ Corporate Debtor to the Operational Creditor, whereas the invoices pertain to 13.02.2018 and 27.02.2018. In this context, it is also worthwhile to mention that the cancellation, if any, has not come from a due authority, as the cancelation must have been made by Ms. Shuchi Sharma herself or under the due Authority by her husband Mr. Manu Sharma. No such Authority letter of Power of attorney has been placed on record to establish the fact that Mr. Manu Sharma was ever duly authorised to look into day-to-day affairs of M/s Delta Business System. Hence, the said cancellation being without any authority is non-est in law. Moreover, Mr. Puneet Jain i.e. the Director of Respondent/ Corporate Debtor was none-else, but son of Mr. Vijay Jain (who is proprietor of M/s Space Traders) and also brother of Ms. Shuchi Sharma. Hence, all Mr. Vijay Jain, Ms. Shuchi Sharma, Mr. Puneet Jain and Mr. Manu Sharma are closely related to each other and this petition appears to have been filed in collusion with one another, in order to defraud the creditors, that too, when already the material worth Rs.18,70,890/- had been dispatched by the Corporate Debtor to M/s Space Traders.”

Present is a case where the Adjudicating Authority has rightly rejected the Section 9 application.  The application under Section 9 cannot be filed for the purposes of recovery of money.  Present is a clear case filed for recovery of amount of Rs.13 lakhs advanced by the Appellant, which is outstanding according  to  the  Appellant. Further  in  view  of  the  observation  of  the Adjudicating Authority that all parties were closely related and application has been filed in collusion with one another, it is sufficient ground for rejecting the application. We do not find any merit in this Appeal. Appeal is dismissed.