NCLAT dismisses plea to initiate insolvency proceedings against Inox Wind

The National Company Law Appellate Tribunal (NCLAT) has dismissed the plea to initiate insolvency proceedings against Inox Wind by an operational creditor of the company. A three-member bench of the insolvency appellate tribunal also upheld the orders of the Chandigarh Bench of the National Company Law Tribunal (NCLT), which on May 22, 2023, rejected the plea of GRI Towers India.

Background

GRI, which is in trade and service relating to the business of providing equipment and manpower, had approached the NCLT, alleging a default of Rs 1.7 crore, which also included interest for delay in payments. However, this was rejected by the NCLT on the ground that it is barred by limitation and there is no agreement placed on record for interest, it does not fulfil the threshold of Rs one crore for filing such a petition.

NCLAT's observations

While dismissing the plea, the NCLAT again said that the Insolvency & Bankruptcy Code (IBC) are not proceedings for recovery of contractual dues. The bench said it was apparent from the facts of the present case the operational creditor has initiated proceedings for recovery of its contractual dues arising out of a contract between the parties. Suit for recovery of dues was already filed by the Appellant, which was withdrawn by the Appellant, the NCLAT observed.

The NCLAT bench headed by Chairperson Justice Ashok Bhushan said, "We are also satisfied that the present was a case filed by the Operational Creditor only for recovery of its contractual dues with regard to default committed as per the case of the Appellant on April 30, 2015, for stage 1 and October 23, 2018, for stage 2. The Adjudicating Authority NCLT did not commit any error in rejecting Section 9 application as barred by time. We do not find any merit in this Appeal. The Appeal is dismissed."