NATIONAL COMPANY LAW APPELLATE TRIBUNAL

R.G. Steels Vs. Berrys Auto Ancillaries (P) Ltd.

MANU/NC/6782/2019

23.09.2019

Company

A Sole Proprietary Concern is not a person under Section 3(23) of IBC and it cannot initiate insolvency proceedings

In present case, RG Steels (Petitioner) has approached present Tribunal as Operational Creditor (OC) under the provisions of Section 9 of Insolvency and Bankruptcy Code, 2016 (IBC, 2016) seeking for the initiation of Corporate Insolvency Resolution Process (CIRP) in relation to M/s. Berrys Auto Ancillaries Private Limited Corporate Debtor (CD) for the amounts allegedly unpaid and in default.

Record of proceedings available before present Tribunal shows that upon Notice, the CD had entered appearance through its Counsel who has also filed a reply to the Petition. The petition under the circumstances, in view of the completion of pleadings, was heard on 6.9.2019. Prima facie from the Petition, it is evident that the petition has been preferred by M/s. RG Steels stated to be a Sole Proprietary Concern. However, by virtue of definition as contained in Section 3(23) of IBC, 2016 a person even though includes an individual it does not include within its ambit a Sole Proprietary Concern.

It is also required to note that, from the points out to the documents as filed along with the petition by the Petitioner itself represents that rate as charged by the OC to the CD had been disputed even prior to the issue of a demand Notice by the OC.

Thus, there seems to be a pre-existence of dispute as between the OC and CD in relation to rates charged (and total debt) by the OC to CD and the same being a pre-existing dispute as evident from the documents filed by the petitioner itself before this tribunal. Hence, based on the above namely a Sole proprietary concern taking into consideration the definition of a "person" is not entitled to approach this Tribunal on its own and also in view of the pre-existing dispute evident on consideration of the merits of claim made by the OC against CD, present petition stands dismissed.

Tags : Default CIRP Initiation

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