REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5899 of 2021

M/S. JAI BALAJI INDUSTRIES

… Appellant(s)

Versus

D.K. MOHANTY & ANR.

… Respondent(s)

WITH

CIVIL APPEAL No. 5904 of 2021

O R D E R

1.

By way of these appeals under Section 62 of Insolvency and

Bankruptcy Code, 2016,¹ the appellant, said to be an operational creditor

of the respondent No. 2 company, seeks to question the common order

dated 17.08.2021 passed by the National Company Law Appellate

Tribunal, Principal Bench, New Delhi,² in Company Appeal (AT)

(Insolvency) No. 888/2020 and Company Appeal (AT) (Insolvency) No.

889/2020, whereby the Appellate Tribunal, after holding that the

operational debt claimed by the appellant was not free from pre-existing

dispute, set aside the orders dated 30.09.2020 passed by the National

Company Law Tribunal, Kolkata Bench, Kolkata,³ in admitting the

1 Hereinafter also referred to as ‘IBC’ or ‘the Code’.

2 Hereinafter also referred to as ‘NCLAT’ or ‘the Appellate Tribunal’.

3 Hereinafter also referred to as ‘NCLT’ or ‘the Tribunal’.

1

Digitally signed by

Neelam Gulati

Date: 2021.10.27

11:36:54 IST

Reason:

Signature Not Verified

application made by the appellant for initiation of Corporate Insolvency

Resolution Process⁴ concerning the respondent No. 2 company.

2.

Having regard to the questions sought to be raised, elaboration on

all the factual aspects pertaining to the claim of the appellant and the

dispute raised by the respondents is not necessary. Only a brief reference

to the relevant background would suffice.

3.

The appellant M/s. Jai Balaji Industries is engaged in the business

of manufacturing and supply of iron and steel products, having its plants

in the States of West Bengal and Chhattisgarh.⁵ The respondent No. 2

Orissa Minerals Development Company Limited is a company engaged in

the business of selling iron ore, having its mines in the State of Orissa.⁶

The respondent No. 1 is the Managing Director of this company.

3.1.

The appellant and the respondents entered into two

Memorandums of Understanding⁷ on 13.08.2003 and 11.03.2004,

whereby the respondent No. 2 agreed to supply, respectively, 1 lakh and

7 lakh metric tons of iron ore per month to the appellant. A dispute ensued

between the parties, as regards the requisite supply and payment,

leading the appellant to invoke the arbitration clause and the matter was

taken up in arbitration proceedings.

4.

Two separate arbitral awards dated 22.02.2010 and 15.02.2010

were passed in relation to the respective MOUs in favour of the appellant

whereunder the respondent company was held liable to make payment of

Rs. 4.44 crores and Rs. 2.79 crores respectively.

4 ‘CIRP’ for short.

5 The appellant is also referred hereinafter as ‘the operational creditor’, as per the context.

6 The respondent No. 2 company is also referred hereinafter as ‘the respondent company’ or ‘the

corporate debtor’, as per the context.

7 ‘MOU’ for short.

2

4.1.

The respondent company challenged the legality and validity of

the awards so made by way of petitions under Section 34 of the

Arbitration and Conciliation Act, 1996.⁸ These petitions were, however,

dismissed by the District Court, Barasat by its orders dated 27.02.2012⁹

and 29.02.2012¹⁰ respectively. These orders were challenged by the

respondent company by way of two appeals¹¹ under Section 37 of the Act

of 1996 before the High Court of Calcutta on 07.08.2012. The appeals

remained pending for long but, on 22.11.2019, the same were dismissed

in default because of non-appearance of the appellant therein (i.e., the

respondent company).

4.2.

On 17.12.2019, the respondent company moved respective

applications for restoration of appeals;¹² and these applications were

allowed by the High Court on 02.03.2020, after finding sufficient cause for

non-appearance on the date of hearing. Consequentl