IN RE Vs. NOWFLOATS TECHNOLOGIES (P ) LTD

JUDGEMENT

(1.) The Applicant Company has moved the application under the provisions of section 9 of the Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity referred to as Adjudicating Authority Rules) seeking that the Corporate Insolvency Resolution Process be set in motion against the respondent company. The facts giving rise to such a prayer is that the respondent company and the applicant had entered into a service agreement wherein the applicant company had agreed to render certain IT related services to the respondent company and that from time to time for the services rendered invoices since the year 2014 had been raised for the payment of service fee. However the respondent company had been defaulting in the payment of dues and that presently a sum of Rs. 1,93,37,105 is due excluding interest payable by the respondent company to the applicant. In view of the same and also taking into consideration that certain internal disputes were going on between the management and its shareholders, the applicant had issued a notice dated 7-10-2016 under the provisions of section 433(e) and section 434 of Companies Act, 1956 for winding up the respondent company on the ground of inability to pay its debts and in relation to the notice no reply has been received even though served. Upon coming into force of the Insolvency & Bankruptcy Code, 2016 (for brevity referred to as IBC) the applicant in the capacity of an Operational Creditor as defined under BBC issued a Notice of Demand as contemplated under rule 5 of the Adjudicating Authority Rules at the registered office of the respondent company which notice of demand has been returned unserved with the endorsement 'left'. Subsequent notices of demand on 14-02-2017 have also been returned with similar endorsements. In addition it is claimed by the applicant that copies of the notice of demand have also been sent to the key managerial personnel as well as the directors of the respondent company on 22-02-2017 through e-mail. The amount due to the applicant by the respondent company remains unpaid and hence taking into consideration the circumstances it is just, fair and equitable and in the interest of justice that the corporate insolvency process be initiated against the respondent company as contemplated under the provisions of IBC.

(2.) During the course of hearing on 10-04-2017 we were made to understand by the representative of the Official Liquidator's office that in relation to the respondent company the Hon'ble High Court of Delhi has appointed the Official Liquidator as the provisional Liquidator in proceeding for winding up initiated before it in terms of section 450 of the Companies Act, 1956. When confronted with the above said fact, the counsel for the petitioner sought to distinguish the winding up proceedings pending before the Hon'ble High Court of Delhi and the Insolvency Resolution Process pending before this Tribunal as initiated by the petitioner, both proceedings however in relation to the same company, namely the respondent. This Tribunal however apprised the counsel for the petitioner about section 434 of the Companies Act, 2013 relating to transfer of proceedings as well the recent changes brought about by way of insertions by the Central Government by virtue of S.O. 3676(E), dated 07-12-2016 made effective from 15-12-2016.

(3.) Based on request of the Counsel for the Applicant the matter was adjourned by a day to give an opportunity to the counsel to peruse the above said notification as well as to make submissions in relation to legal position as may be applicable under the circumstances. When the matter was again taken up on 11-04-2017, the counsel for the applicant filed written submissions in relation to maintainability of the petition under the provisions of IBC. Going through the written submissions as filed by the counsel for the applicant it is seen that an attempt is sought to be made that the provisions of IBC 2016 will prevail notwithstanding anything inconsistent therewith contained in any other law for the time being in force and further in the absence of any enabling provision to approach Hon'ble High Court in a pending winding up proceedings the application as filed by the applicant under section 9 of IBC has to be admitted if conditions laid down under section 9(5) are complied with and further the object of IBC is materially different from the winding up proceedings before Company Court.