NATIONAL COMPANY LAW APPELLATE TRIBUNAL

NEW DELHI

Company Appeal (AT) (Ins) No.1142 of 2019

IN THE MATTER OF:

iValue Advisors Pvt. Ltd.

…Appellant

Versus

Srinagar Banihal Expressway Ltd.

…Respondent

For Appellant:

Shri Sameer Rastogi, Advocate

For Respondent:

Shri Mahfooz Nazki and Shri Zain Maqbool,

Advocates

O R D E R

13.01.2020

Heard Counsel for the Appellant – Operational Creditor as

well as the learned Counsel for the Respondent – Corporate Debtor.

2.

The Appellant is an MSME (Micro, Small and Medium Enterprise) and

filed Section 9 Application under Insolvency and Bankruptcy Code, 2016 (IBC

– in short) against the Respondent. The Appellant claimed in the Application

that the Corporate Debtor is a special purpose vehicle company incorporated

for execution of project, that is, rehabilitation, strengthening and four laning

of Srinagar to Banihal section in the State of J&K. The Appellant claimed that

in 2014, an engagement letter dated 21^st November, 2014 was signed between

the Operational Creditor and the Corporate Debtor and fee was fixed at Rs.22

Lakhs for availing project monitoring services, which were to be rendered by

the Appellant. The Appellant raised invoices between 24.11.2014 till 16^th

February, 2017 and the Corporate Debtor had released payments up to 6^th

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Company Appeal (AT) (Ins) No.1142 of 2019

October, 2016. The Appellant claimed that part payment was due and the

Appellant sent Notice under Section 8 of IBC on 21^st January, 2019 (Page –

94) referring to the invoices due and outstanding and sought to recover the

dues for services rendered. In spite of the Notice, the Respondent did not pay

and thus, Section 9 Application was moved under IBC.

3.

The learned Counsel for the Respondent refers to the Reply which was

filed by the Respondent before the Adjudicating Authority (National Company

Law Tribunal, Hyderabad Bench, Hyderabad). According to the Counsel, the

Appellant had approached Delhi MSME Facilitation Council for the same

purpose for which Section 9 Application was moved. The Respondent -

Corporate Debtor claimed that the Corporate Debtor had been instructed by

the MSME to conciliate the alleged dispute with the Operational Creditor and

Corporate Debtor had sent Reply dated 4^th March, 2019 (Page – 90) and

refuted all the allegations made by the Operational Creditor. According to the

Respondent, when reference was made by the Appellant to MSME Council,

that itself showed that there was dispute and the arbitration proceedings

under the MSME Council are to be initiated and thus the Application under

Section 9 was liable to be rejected.

4.

The Adjudicating Authority heard the parties and rejected the Section

9 Application observing in para – 5 of the Impugned Order as under:-

“5.

It is the case of petitioner that various invoices

were raised from 24.11.2014 till 16.02.2017 and the

Corporate Debtor has released payments for the

services in full up to 06.10.2016 and there was a

substantial delay in making part payment and the

amount in default is Rs.73,52,122.92/-. On perusal of

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record by this Adjudicating Authority, it is observed that

the Petitioner themselves in the petition has stated that

the subject matter has already been taken to the MSME

facilitation council for redressal in terms of MSME

Development Act, 2016 and Arbitration proceedings

between the Operational Creditor and Corporate Debtor

have been commenced with the failure of conciliation

between the parties as per section 18(3) of the MSME

Development Act, 2006. Furthermore, the Corporate

Debtor has also sent a reply on 07.02.2019, to the

demand notice dated 21.01.2019, sent by the

Operational Creditor raising the pre-existing dispute

with regards to the amount claimed to the demand

notice. The Adjudicating Authority has already held that

the pendency of the A