An offer to pay a disputed claim does not constitute an admission of liability, allowing the party to contest the claim in a civil forum.

O R D E R

(Hybrid Mode)

13.12.2024

This is an Appeal against the impugned order dated 20.04.2023. The Learned Counsel for the Appellant submits the Learned NCLT ought not to have dismissed the Company Petition (IB) 1295(MB)/2020 and rather should have continued with it giving an opportunity to the Appellant to prove it did not owe any liability to the Respondent.

2. However we may refer to reply dated 18.10.2021 filed before the NCLT to the petition filed under Section 9 filed by the Respondent herein and it read as under:

“….

8. Finally, without prejudice to all of the above, and since the Respondent Company is a bona fide party and a responsible corporation, it is willing to deposit and/or provide security in respect of the entire principal claim of the Petitioner in any manner directed by this Hon’ble Tribunal. The Petitioner can then prefer appropriate proceedings before a civil forum to establish/prove its claim, which will be heavily resisted by the Respondent Company. It is made clear that this offer to deposit or provide solvent security with regard to the entire claim only to undermine the Petitioner’s case that CIRP should be initiated against the Respondent Company. It is o manner whatsoever, constitutes an acknowledgement of liability on the part of the Respondent Company. The Respondent Company vehemently disputes any liability with regard to the Petitioner’s claim and will contest the same in any recovery proceedings that the Petitioner may initiate . This Hon’ble Tribunal may accept the said deposit/security and direct the Petitioner to initiate appropriate proceedings before a civil court for recovery of its alleged claims within a specified time period, failing which the deposit / security would be returned to the Respondent Company.”

3. Learned Counsel for the Appellant submits the Learned NCLT ought to have acted upon para 8 of the Reply wherein the Appellant only offered to deposit the said amount as a security to the alleged claim of the Respondent and to further hear the Company Petition on merits to find out if the Appellant actually had any liability towards the Respondent. However, we find on record at page no. 84 of the Additional Affidavit filed by one Mr. Abhishek A. Javeri, Managing Director of the Appellant herein which read as under:

“….

4. However, in order to ensure that the Respondent Company, for the following reasons, is not a company that could and can be put to the rigours of the Code, and be subjected to a CIRP process, the Respondent Company is ready and willing to pay an amount of Rs. 1,74,16,800/- being the amount claimed by the Petitioner Company in the present proceedings. However, the Respondent Company whilst making the payment of the said amount, reserves its right to take such steps and file such proceedings against the Petitioner Company, for the said amount, which in the Respondent Company's respectful submission, is not a bonafide claim made by the Petitioner . Further, the payment of the said amount, should not in any manner be construed to mean that the Respondent Company has admitted the claim of the Petitioner. The Respondent Company is paying the said amounts to the Petitioner Company under protest; reserving such right of legal remedy and to ensure that the Company, who for the following reasons is not subjected to an order of admission and initiation of CIRP against it.

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6. Moreover, and strictly without prejudice to the above, it is respectfully submitted that there are serious disputes between the Petitioner and the Respondent Company as regards its alleged claim and therefore, the Respondent Company is ready to and without prejudice to its right to adopt such legal remedies in respect of the alleged claim made by the Petitioner in the present proceedings pay the amount of

Rs.1,74,16,800/-, As a result, there is no question of their being justification for the commencement of CIRP against the Respondent Com