National Company Law Appellate Tribunal Uttam Galva Steels Limited vs Df Deutsche Forfait Ag & Anr on 28 July, 2017 NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI COMPANY APPELLATE JURISDICTION Company Appeal (AT) (Insolvency) 39 of 2017 (arising out of order dated 10th April, 2017 passed by National Company Law Tribunal, Mumbai Bench in CP No. 5/Mah/2017 of 2017) IN THE MATTER OF: Uttam Galva Steels Limited .Appellant V. DF Deutsche Forfait AG & Ant.: spondents Present: For Appellt: an Mr Sudipto Sarkar and Mr Virendra Ganda, Sr. Advocates, Mr Arvind Kumar Gupta, Mr Sumesh Dhawan, Ms Purti Marwaha Gupta, Mr Mahesh Agarwal, Mr Anuj Kumar, Ms Vatsala Kak and Mr Rajeev Kumar, Advocate. For Respondents: Mr Vivek Sibal, Senior Advocate, Ms Pooja M Saigal, Mr Akshay Gupta, Advocates and Mr Sahil Bhatia, POA for the Respondent. JUDGEMENT SUDHANSU JYOTI MUKHOPADHAYA, J. The Respondents both of whom claim to be Operational Creditor (s) filed a joint application under Section 9 of the Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as I&B Code) for 1 initiation of corporate insolvency resolution process against Appellant Corporate Debtor. By impugned order dated 10th April, 2017, Learned Adjudicating Authority (National Company Law Tribunal) Mumbai Bench while rejected the objection as were raised by the Appellant, admitted the application and directed to refer the matter to the Insolvency & Bankruptcy Board of India to recommend name of Interim Resolution Professional for his a ment. 2. Ld. Counsel for the Appellant 'Cor'p 'orate Debtor challenged the impugned order on different count. It was subrnittc at there is a preexisting bonafide dispute between the parties and therefore, the insolvency application under Sec of the I&B Code is not maintainable. port of aforesaid submission, it was contended that: (i) there is no privity of contract with the Respondents; (ii) Respondelrits violated the contractual terms; (iii) Appellant disputed execution of contract; (iv) There is dispute about quantum of default; (v) There is a dispute as to who is the defaulter (whether the default can at all be attributed to Uttam Steels in view of actual liability being that of a 3rd party); (vi) There is a dispute as to whether the Respondents are Operational Creditors of the Appellant etc. 3. It was pointed out that the Respondents had issued a winding up notice on 8th December 2016 much prior to the issuance of so called notice under Section 8 of the MB Code. Pursuant to which, the Appellant disputed the claim by a detailed reply dated.3rd January 2017. Apart from that, the Respondents are relying on a document dated 27th December 2013 to fix liability on the Appclldnt, hich has not been signed by Appellant and was The Ld. Counsel for the Appellant referred to an email dated 10.4.2014 forwarded, b existence of bonafide dispute between the parties and submitted that in view of bonafide preexisting dispute, in terms of subSection (6) of Section 5 of the I&B Code, the joint insolvency application is not maintainable. 4. It was further pointed out that the notice under Section 8 of MB Code dated 28.2.17 was issued jointly by two Respondents, both of whom claimed to be 'Operational Creditors' but not by Respondents themselves but through their Advocate, Ms Sonu Tandon. According 3 to Appellant the joint petition under Section 9 by two separate Operational Creditors is not permissible and Demand Notice under Section 8 in Form3 or Form4 of Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as Adjudicating Authority Rules) was not issued by the 'authorised persons' in accordance with law. 5. It was further submitted that the certificate of 'financial institution' as prescribed and man nder clause (c) of sub Section (3) of Section 9 of the I&B d by Respondcnts in . support of their claim of the unpaid operational debt. êllant, the bank certificate dated 2017 submitted by Respondents is defective on multiple' cowi as not issued by a notified "financial institution", but has been issued by 'Misr Bank' which is not recognised as a "financial institution" in India as per subsection (14) of Section 3 read with clause (c) of subsection