IMPORTANT POINT
IBC is not intended to be substitute to a recovery forum.

JUDGMENT

A.K. SIKRI, J.

The order of the National Company Law Appellate Tribunal, New Delhi (for short, ‘NCLAT) dated September 04, 2018 is the subject matter of challenge in the present proceedings. It is a short order, which is reproduced herein its entirety.

“Having heard learned counsel for the parties and being satisfied of the grounds shown, six days delay in preferring the appeal is condoned. I.A. No. 973 of 2018 stands disposed of.

Prima facie case has been made out by the Appellant in view of the part decree awarded by the competent court under Section 34 of the Arbitration and Conciliation Act, 1996 and the review application under Section 37 preferred by the Respondent having rejected on 29th January, 2016.

However, taking into consideration the fact that if appeal is allowed and Corporate Insolvency Resolution Process is initiated against the Respondent – “Transmission Corporate of Andhra Pradesh Ltd.’, the government undertaking may face trouble. Therefore, by way of last chance we grant one opportunity to respondents to settle the claim with the appellant, failing which this Appellate Tribunal may pass appropriate order on merit.

Post the case ‘for admission’ on 4th October, 2018. Appeal may be disposed of at the stage of admission.”

2. Though, in the first brush, it appears that matter is still at the stage of admission and the aforesaid order is an interim order, a careful reading thereof would clearly bring out that the NCLAT perceives that the appellant herein owes money to the respondent and for this reason a chance is given to the appellant to settle the claim of the respondent, otherwise order would be passed initiating Corporate Insolvency Resolution Process (for short, ‘CIRP’). According to the appellant, no amount is payable and the order in question is causing serious prejudice to the appellant which is asked to settle the purported claim, failing which, to face insolvency proceedings. It may also be recorded at this stage itself that the appeal pending before NCLAT is filed by the respondent herein which is against the Orders dated April 09, 2018 passed by the National Company Law Tribunal (for short, ‘NCLT’), Hyderabad. By the said order, the NCLT has dismissed the petition filed by the respondent herein under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the ‘IBC’). To put it briefly at this stage, the NCLT, after detailed deliberations, has come to the conclusion that the Company Petition filed by the respondent was not maintainable as the claims which were preferred by the respondent against the appellant and on the basis of which respondent asserts that it has to receive monies from the appellant are not tenable and in any case these are not disputed claims. This assertion is based on the fact that these very claims of the respondent were subject matter of arbitration and the award was passed rejecting these claims as time barred. Moreover, the company petition itself suffers various fundamental defects. On that basis, NCLT held that there is a valid dispute, rather no dispute as issue in question was substantially dealt with by various courts as mentioned in the order passed by NCLT.

3. Before going into the details of the said order passed by NCLT it would be appropriate to refer to some important events in chronological order, which have a bearing on the present case.

4. The appellant is a Transmission Corporation of Andhra Pradesh Government and is successor of Andhra Pradesh State Electricity Board (for short, ‘APSEB’) and is in the activities relating to transmission of electricity. It had awarded certain contracts to the respondent herein for supply of goods and services. Some disputes arose and the respondent initiated arbitration proceedings. As many as 82 claims were filed by the respondent before Haryana Micro and Small Enterprises Facilitation Council (hereinafter referred to as ‘Arbitral Council'). These proceedings culminated into Award dated June