Skip to main content

Strict burden of proof not applicable to proceedings under the I&B Code, 2016

Cause Title : Ashok Kumar Bhasin. vs ABB Power Products and Systems India Limited, Company Appeal (AT)(Insolvency) No. 414 of 2023, National Company Law Appellate Tribunal

Date of Judgment/Order : 

Corum : 

Citied: 

Anil Rishi Vs. Gurbaksh Singh, (2006) 5 SCC 558

Rangammal Vs. Kuppuswami & Anr., (2011) 12 SCC 220

Mascot Petrochem Private Limited Vs. Midas Construction Company Private Limited, C.A. (AT) Ins. No. 1399 of 2019 decided on 03.02.2022,

Background

The Appellant suspended director of the Corporate Debtor Sigma-C Infrastructure Private Limited has filed this Appeal challenging the admission order under Section 9 of the Insolvency Code, issued by NCLT, Kolkata.

Allegedly, some goods were supplied by the Operational Creditor to the Corporate Debtor for onward delivery to CESC, against which payment were not received. Hence the application under Section 9.

One of objections raised by the  Corporate Debtor was that Operational Creditor has failed to file any document proving delivery of the materials which fact was also noticed in the communication by Advocate of Operational Creditor. Operational Creditor in Section 9 Application did not file any proof of service of Section 8 Notice. The burden of proof lies on the Operational Creditor proving delivery of goods before any claim for payment can be considered. Operational Creditor failed to prove the delivery of goods.

Judgment

The NCLAT observed that supplementary affidavit was filed before the Adjudicating Authority bringing on record the proof of service of Section 8 Notice and in the said notice, Section 9 application as well as Part-IV of the Application (Particulars of Operational Debt), it has been clearly stated that “the equipment was duly received by the Corporate Debtor from the Operational Creditor, without any dispute or demur.” Further, the tax invoice has been filed along with Section 9 Application dated 16.05.2018 in which details of recipients is mentioned as name of the Corporate Debtor and details of consignee was mentioned as CESC Limited. Also, there were communications between the OP and the CD which indicate deliveries were made and at no point of time prior to filing reply to Section 9 Application, corporate debtor issued any such letter or complaint informing the Operational Creditor about non-delivery of goods. 

Invalidating the various SC judgments referred to by the CD which had insisted on strict proof of delivery for admission of application under Section 9 of IBC, the NCLAT held that the above judgements were considering the provisions of Section 101, 102 and 106 of the Indian Evidence Act, 1872. The observations made by the Hon’ble Supreme Court were in context of burden of proof under the Indian Evidence Act. Strict burden of proof under the Evidence Act can not be applicable with regard to proceedings under the I&B Code, 2016 which are summary proceeding where pleadings are in proforma as prescribed in Rules and Regulations.

As for the NCLT order, the NCLAT held that this is a case where Demand Notice was not even replied by the Corporate Debtor and the plea raised in the Reply by the Corporate Debtor regarding non-supply of goods has been held to be dishonest plea and moonshine plea hence the judgement of this Tribunal in above case does not come to any help to the Appellant.

Comments

Post a Comment

Most viewed this month

Court approached in the early stages of arbitration will prevail in all other subsequent proceedings

In National Highway Authority of India v. Hindustan Steelworks Construction Limited, the Hon'ble Delhi High Court opined that once the parties have approached a certain court for relief under Act at earlier stages of disputes then it is same court that, parties must return to for all other subsequent proceedings. Language of Section 42 of Act is categorical and brooks no exception. In fact, the language used has the effect of jurisdiction of all courts since it states that once an application has been made in Part I of the Act then ―that Court alone shall have jurisdiction over arbitral proceedings and all subsequent applications arising out of that agreement and arbitral proceedings shall be made in that Court and in no other Court. Court holds that NHAI in present case cannot take advantage of Section 14 of the Limitation Act, 1963 for explaining inordinate delay in filing present petition under Section 34 of this Act in this Court.
Post a Comment
Read more

No Rebate For Stamp Duty Paid In Another State - Bombay HC

A three judge bench of the Hon'ble Bombay High Court (Bombay HC) in a recent judgment in the matter of Chief Controlling Revenue Authority, Maharashtra State, Pune and Superintendent of Stamp (Headquarters), Mumbai v Reliance Industries Limited, Mumbai and Reliance Petroleum Limited, Gujarat1 has held that orders in case of a scheme of arrangement under Section 391 to 394 of the Companies Act, 1956 (Act) involving different High Courts in multiple states, are separate instruments in themselves. Accordingly, stamp duty would be payable on all the orders (and consequently, all the states) without the benefit of remission, rebate or set-off.
Post a Comment
Read more

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more