M/S CONSOLIDATED CONSTRUCTION CONSORTIUM LIMITED versus M/S HITRO ENERGY SOLUTIONS PRIVATE LIMITED

M/S CONSOLIDATED CONSTRUCTION CONSORTIUM LIMITED versus M/S HITRO ENERGY SOLUTIONS PRIVATE LIMITED

The Court held that the appellant was an operational creditor because the debt arose from an operational transaction (advance payment for supply of light fittings) and a demand notice may be issued without an invoice; the respondent had not effectively shown that the MOA object to take over the proprietary concern had been validly amended and registered, so the respondent was liable as having taken over the proprietary concern; and the Section 9 application was not time-barred because the default occurred when the proprietary concern finally refused repayment (response dated 2 March 2017) and the Section 9 application filed on 1 November 2017 was within limitation.

Parties
Appellant: M/S Consolidated Construction Consortium Limited; Respondent: M/S Hitro Energy Solutions Private Limited
Jurisdiction
India
Judgment Date
04 February 2022
Procedural Posture
Civil Appeal / Appeal Under Section 62 IBC From NCLAT Order Dated 12 December 2019
Outcome
Appeal allowed
Legal Topics
Operational Creditor, Memorandum of Association, Limitation, Corporate Insolvency Resolution Process
Insolvency and Bankruptcy Code, 2016 Companies Act, 2013 Limitation Act, 1963 Operational Creditor Memorandum of Association Limitation Corporate Insolvency Resolution Process

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Parties

M/S Consolidated Construction Consortium Limited

Appellant

M/S Hitro Energy Solutions Private Limited

Respondent

Procedural Posture

Civil Appeal / Appeal Under Section 62 IBC From NCLAT Order Dated 12 December 2019

Legal Issues

  1. 1 Whether the appellant is an operational creditor under the IBC
  2. 2 Whether the respondent took over the proprietary concern and is liable for its debt
  3. 3 Whether the application under Section 9 of the IBC is barred by limitation

Ratio Decidendi

The Court held that the appellant was an operational creditor because the debt arose from an operational transaction (advance payment for supply of light fittings) and a demand notice may be issued without an invoice; the respondent had not effectively shown that the MOA object to take over the proprietary concern had been validly amended and registered, so the respondent was liable as having taken over the proprietary concern; and the Section 9 application was not time-barred because the default occurred when the proprietary concern finally refused repayment (response dated 2 March 2017) and the Section 9 application filed on 1 November 2017 was within limitation.

Court Disposition

Appeal allowed

Orders

  • Set aside the impugned judgment and order of the NCLAT dated 12 December 2019
  • Application under Section 9 of the IBC was held maintainable and the NCLT order admitting the Section 9 application is restored effectively by allowing the appeal