The judgment emphasizes the availability of an alternative appeal remedy under the Insolvency and Bankruptcy Code, 2016 and the consequences of abusing the extraordinary jurisdiction of the Court.

Headnote:
Insolvency and Bankruptcy Code - Corporate Insolvency Resolution Process - Section 9 of the Insolvency and Bankruptcy Code, 2016 - Rule 6 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016
Fact of the Case:

The second respondent, a Corporate Creditor, approached the first respondent Tribunal seeking to initiate action for recovery of amount due to them from the petitioner under Section 9 of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority passed an order allowing the application filed by the second respondent. The petitioner filed a writ petition against this order.
Finding of the Court:

The Court dismissed the writ petition on the ground of maintainability, as an effective alternative remedy was provided under the IB Code, 2016, by way of appeal before the Appellate Authority. The Court also imposed exemplary cost on the petitioner for leading the Court to believe that they were willing to settle the amount due to the second respondent, without any intent to settle the same.
Issues: Maintainability of the writ petition and the conduct of the petitioner in filing an affidavit of undertaking and subsequently resiling from it.
Ratio Decidendi: The Court held that the conduct of the petitioner in invoking the extraordinary jurisdiction of the Court under Article 226 of the Constitution of India was an abuse of process of law, and the writ petition was liable to be dismissed. The Court also emphasized the availability of an alternative appeal remedy under the IB Code, 2016.
Final Decision: The writ petition was dismissed on the ground of maintainability and exemplary cost of Rs. 1,00,000/- was imposed on the petitioner.

JUDGMENT

V. Parthiban, J.

The petitioner herein is engaged in the business of Manufacturing and Selling of Polyester Yarn, Cotton Yarn etc. The second respondent is a Proprietary Concern engaged in Trading of Polyester Staple Fibre PC Yarn, Polyester Yarn, Cotton Yarn etc. The petitioner had approached the second respondent for supply of the above said materials and an agreement was entered into between them in that behalf. Thereafter, it appears that the second respondent had supplied Polyester Fibre Products to the petitioner and there appears to be a default in making payment by the petitioner to the second respondent in regard to the supply made to them.

2. In the above circumstances, the second respondent, being a Corporate Creditor, approached the first respondent "Tribunal seeking to initiate action for recovery of amount due to them from the petitioner. Since there was no fruitful response forthcoming from the petitioner in regard to the settlement of their liability, the second respondent had initiated proceedings, under Section 9 of the Insolvency and Bankruptcy Code, 2016 (in short, "IB Code, 2016") read with Rule 6 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (in short, "IB Rules, 2016"), before the first respondent, for recovery of the amount due to them. The Adjudicating Authority, namely, first respondent appeared to have issued notices to the petitioner on number of occasions. As there was no response forthcoming from the petitioner herein, the Adjudicating Authority passed an order, dated 02.11.2017, allowing the application filed by the second respondent herein. The order, dated 02.11.2017, passed by the first respondent "Tribunal is self-explanatory and therefore, the same is extracted hereunder as found in Paragraph Nos.7 to 13:

"7. Before proceeding the matter, it is necessary to mention herein that the Respondent was set ex-parte vide order dated 02.11.2017 due to non- appearance on several occasions. The Respondent neither gave a reply to the Demand Notice dated 02.08.2017 nor filed any counter nor caused appearance before this Adjudicating Authority in spite of several notices. The petitioner has also placed on record proof of sending notices and deliveries. The Petitioner has complied with all the requirements as stipulated under the provisions of the I&B Code, 2016 for the purpose of initiating Corporate Insolvency Resolution Process.

8. After hearing submissions of the counsel for the petitioner and having perused the record, this Adjudicating authority is satisfied that the petitioner has clearly made out his case by establishing that the Corporate Debtor has defaulted the payment dues on various occasions to the petitioner. Also, the petitioner has proved by placing overwhelming evidence viz. Invoices, Demand Notice, financial transactions and Bank statements that default has occurred which the Corporate Debtor was responsible to pay. I am of the opinion that the petitioner has established clearly that the amount in default committed by the corporate debtor is genuine and is supported by the documentary evidence placed before this Adjudicating authority. In the circumstances, having satisfied with the submissions put forth by the learned counsel for the petitioner, I am inclined to admit the instant petition.

9. Therefore, the instant petition is admitted and I order the commencement of the Corporate Insolvency Resolution Process which shall ordinarily get completed within 180 days, reckoning from the day this order is passed.

10. I appoint Shri S.Muthu Raju as Interim Resolution Professional (IRP) proposed by the Operational Creditor. There is no disciplinary proceedings pending against the IRP and his name is reflected in IBBI website. The IRP is directed to take charge of the Respondent/Corporate Debtor's Management immediately. He is also directed to cause public announcement as prescribed under Section 15 of the I&B Code, 2016 within three-days from the date of t

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