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2024 Supreme(Telangana) 26
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
M.G. PRIYADARSINI, J.
Ramky Infrastructure Limited – Appellant
Versus
Hi-reach Construction Equipments (P) Ltd. - Respondent
Civil Revision Petition No.377 of 2020
Decided on : 12-02-2024
Advocate Appeared:
For the Appellant : Sri M. Pranav
For the Respondent: Amir Bavani
IMPORTANT POINT
The main legal point established in the judgment is that the Tribunal has jurisdiction to adjudicate the issue of fraud under Section 65 of the Insolvency and Bankruptcy Code and should exercise it to prevent manifest injustice.
Headnote:
Forgery - Jurisdiction of Tribunal - Section 65 of the Insolvency and Bankruptcy Code - Rule 131 of NCLT Rules - The court discussed the jurisdiction of the Tribunal to direct production of documents and impose penalty under Section 65(1) of the Insolvency and Bankruptcy Code for fraudulent or malicious initiation of proceedings. It highlighted key legal provisions, their interpretations, and how they influenced the court's decision.
Fact of the Case:
The Corporate Debtor filed a petition alleging that a ledger statement filed by the Operational Creditor was forged and sought a direction to produce the original statement, impose penalty, and dismiss the company petition. The Tribunal closed the Interlocutory Application as not maintainable.
Finding of the Court:
The court found that the Tribunal has jurisdiction to summon the production of documents and impose penalty under Section 65(1) of the Insolvency and Bankruptcy Code for fraudulent or malicious initiation of proceedings. It held that the Tribunal failed to exercise its jurisdiction, resulting in manifest injustice to the revision petitioner.
Issues: The key issue was the maintainability of the Civil Revision Petition and the jurisdiction of the Tribunal to adjudicate the dispute.
Ratio Decidendi: The court held that the Tribunal has jurisdiction to adjudicate the dispute and should have exercised it. It emphasized that the consequence of initiating a Corporate Insolvency Resolution Process fraudulently will be limited to the monetary penalty provided for in Section 65 of the Insolvency and Bankruptcy Code.
Final Decision: The Civil Miscellaneous Appeal was disposed of by setting aside the Tribunal's order and remanding the matter back to the Tribunal for reconsideration, adhering to the principles of natural justice.
ORDER :
This Civil Revision Petition is filed by the revision petitioner-Corporate Debtor under Article 227 of the Constitution of India, aggrieved by the Order dated 05.02.2020 in I.A.No.867 of 2019 in C.P.(IB).No.586/9/HDB/2019 passed by the learned National Company Law Tribunal, Hyderabad Branch, Hyderabad (for short ‘the Tribunal’), wherein the said Interlocutory Application was closed as not maintainable.
2. For the sake of convenience, hereinafter, the parties will be referred as per their array before the learned “Tribunal”.
3. The applicant/Corporate Debtor filed application under Section 65 of the Insolvency and Bankruptcy Code, 2016 alleging that the Ledger Statement dated 14.04.2017 filed by the Operational Creditor-respondent in main Company Petition was never issued by the applicant-Corporate Debtor. The seal and signature are forged and fabricated. The said document does not belong to the applicant or its authorized signatories. Therefore, the applicant sought for a direction to respondent for producing the original of alleged ledger statement dated 14.04.2017, impose penalty under Section 65(1) of the Insolvency and Bankruptcy Code for malicious initiation and dismiss the company petition for malicious initiation.
4. To the above said application, the respondent-operational creditor filed reply alleging that the alleged ledger statement was provided by the applicant-Corporate Debtor itself and there is no requirement of providing its authenticity and further stated that 3 out of 5 purchase order issued by the applicant bear the same stamp of ‘Ramky Group’ which is claimed to be forged, and that the alleged ledger statement was not served on them with demand notice as the same is an additional document affirming outstanding dues.
5. The learned Tribunal after considering the rival submissions, closed the Interlocutory Application on the ground that it is not maintainable. Aggrieved by the same, the applicant filed this Civil Revision Petition to set aside the impugned order.
6. Heard both sides and perused the entire record including the grounds of revision.
7. It is the contention of the learned counsel for the revision petitioner that the original ledger statement dated 14.04.2017 is in the custody of the respondent and the learned Tribunal ought to have directed the respondent to produce the original of the said document for proving the alleged forgery and prayed to allow the Civil Revision Petition.
8. It is the contention of the learned counsel for the respondent that the revision petitioner issued purchase orders dated 03.05.2012, 10.05.2012, 03.07.2012 and 07.07.2012 to respondent for supply of construction materials on its construction site and that due to failure to repay the dues, respondent issued a demand notice dated 13.05.2019 and petitioner issued a frivolous and false reply dated 21.05.2019 and that the respondent filed Company Petition (I.B.) No.586/HDB/2019 before the Tribunal and later filed impugned Interlocutory Application for production of original ledger statement dated 14.04.2017 and that the learned Tribunal rightly gave a finding that the application is beyond its jurisdiction to adjudicate the issue. It is also contended by the learned counsel for the respondent that there is alternative statutory remedy available under Section 61 of the Insolvency and Bankruptcy Code, 2016. Hence, he prayed this Court to dismiss this Civil Revision Petition.
9. Both the counsel have vehemently argued at length about the maintainability of the Civil Revision Petition in view of alternate statutory remedy available under Section 61 of the IBC, 2016. Thus, before going into the merits of the case, it is just and necessary to proceed with the key issue in this Civil Revision Petition i.e., whether the present Civil Revision Petition is maintainable or not.
10. Learned counsel for the respondent in support of his contention relied upon a decision of the Honourable Supreme Court in M/s. India Glycols Limited and anot
