Sobha Limited Vs Pancard Clubs Limited [Company Appeal (AT) (Insolvency) No. 162 of 2017] - Synopsis
Team SoOLEGAL 12 Feb 2021
FACTS:
In this case, Sobha Limited Vs Pancard Clubs Limited [Company Appeal (AT) (Insolvency) No. 162 of 2017], the appellant company had entered into an agreement with the respondent company for construction work on 1st November, 2012. The contract price was Rs. 10,81, 31,099/-. For the construction work, the Operational Creditor that is the appellant had raised invoices on the Corporate Debtor. However, the respondent company had failed to pay the dues and the Operational Creditor had issued a notice under Section 434 of the Companies Act, 1956. The Operational Creditor had filed an application under Section 9 of Insolvency Bankruptcy Code, 2016. According to the Corporate Debtor, the Arbitration Proceedings under Section 11 of the Arbitration and Conciliation Act, 1996 were filed by the parties before the Hon'ble High Court well before the notification under Section 8(1) of the Insolvency and Bankruptcy Code, 2016 and therefore there is an existence of a dispute. As there is an existence of a dispute, the Adjudicating Authority had dismissed the application of the Operational Creditor. Learned Counsel, acting on behalf of the Applicant, had argued that the Corporate Debtor had refused to pay the bills for the work carried out and that the Adjudicating Authority could not deny the application relating to the order of 29th February 2016 passed by SEBI.
It was argued that SEBI had given an order, inter alia, ordering the Corporate Debtor not to alienate, dispose or sell any of the properties of the Company except for the purpose of rendering refunds to its investors and the Ministry of Corporate Affairs and to begin the process of liquidation of the Respondent.

DECISION OF THE COURT:
The commencement of the Corporate Insolvency Resolution Procedure under the Insolvency and Bankruptcy Code, 2016, cannot be nullified by any order passed by SEBI, nor can it be a basis for refusing an application under Section 9 of the Code, but because there is a disagreement over the invoices submitted by the Appellant, the Bench had held that application under Section 9 of the Code cannot be maintainable.
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