Competition LawInsolvency and BankruptcyNCLTRulings

NCLT can initiate CIRP if High Court has not appointed official Liquidator & passed winding up order

Nuvoco Vistas Corporation Ltd. vs Maxout Infrastructures Pvt. Ltd.

In Nuvoco Vistas Corporation Ltd. vs Maxout Infrastructures Pvt. Ltd. , NCLT held that it does not have any bar to initiating CIRP if a winding up petition is pending unless an official Liquidator has been appointed and a winding up order has been passed.
In the present case, Nuvoco Vistas Corporation Ltd (Applicant) had filed an application against Maxout Infrastructures Pvt. Ltd. (Respondent) u/s 9 of Insolvency and Bankruptcy Code 2016 (‘Code’). Applicant alleged that respondent company had defaulted in clearing the debt and the payment became due within 30 days from the date of the invoices. Thereafter, as per Section 8 of the Code applicant had sent the notice calling upon the payments within 10 days of the receipt of the notice.
Respondent also mentioned that Respondent had made the entire payment to the Applicant through its bank account. However, Respondent alleged that the applicant had deliberately produced an incorrect statement of account with respect to the payment made by the Respondent. Hence, Respondent was permitted to file details and place Bank account statement. NCLT held that Respondent could not provide the conclusive proof for the settlement of the dues raised by the Applicant company, despite opportunities for reconciliation of account was given. Hence, NCLT held that the amount claimed by the Applicant was due by the Respondent.
Thereafter, Respondent mentioned that Ultra Tech Cement Ltd. had initiated winding up proceedings against the Respondent. However, the appointment of an Official Liquidator has been kept in abeyance by the Delhi HC. Hence, pendency of winding up petition before the HC bars NCLT to initiate CIRP of the Respondent Company.
NCLT relied on Jaipur Metals & Electricals Employees Organisations vs. Jaipur Metals & Electricals Ltd. and Union Bank of India vs. Era Infra Engineering Limited. Thereafter, mentioned that in the present case, HC has kept the appointment of an official liquidator in abeyance. Hence, NCLT held that there is no bar to initiate CIRP of the Respondent Company.
Hence, NCLT appointed Mr. Anup Kumar as the Insolvency Resolution Professional as the applicant had not named the Insolvency Resolution Professional.
Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *