Appellant’s Claim Deferred Until Corporate Debtor’s Counterclaim Determination: NCLAT

Case Details: Anheuser Busch Inbev India Ltd. v. Pradeep Kumar Sravanam, Resolution Professional of East Godavari Breweries (P.) Ltd. - [2023] 152 taxmann.com 544 (NCLAT-Chennai)

Judiciary and Counsel Details

• • M. Venugopal, Judicial Member & Shreesha Merla, Technical Member
  • Promod Nair, Sr. Adv. & Amar Gupta, Adv. for the Applicant.

Facts of the Case

In the instant case, the appellant (i.e. the financial creditor) gave an advance to the corporate debtor and both entered into an agreement, which stated that the corporate debtor would be liable to repay the advance amount along with an interest on termination of the same.

Subsequently, the said agreement was terminated and the corporate debtor became liable to repay the said amount. The appellant initiated an arbitration proceeding against the corporate debtor to recover the said amount. The Adjudicating Authority (NCLT) initiated the CIRP against the corporate debtor and RP was appointed.

The appellant submitted its claims to the RP, however, the RP did not admit the said claim and kept the same in abeyance. Thereafter, the appellant filed an application before the NCLT seeking the issuance of directions to the RP to admit the claim of the appellant. However, the NCLT vide the impugned order dismissed the application of the appellant.

Aggrieved by the said order, the appellant filed an instant appeal to the National Company Law Appellate Tribunal (NCLAT) against the order passed by the NCLT.

It was noted that arbitration proceedings were pending with regard to the counterclaim of the corporate debtor.

NCLAT Held

The NCLAT held that the ‘appellant’s claim’, could not be admitted, till the ‘counterclaim’ of the ‘corporate debtor’, was determined, which might end in a ‘set off’ of ‘sum’, payable to the appellant’. Therefore, the prayer of the appellant pertaining to the admission of the claim could not be acceded and the impugned order was free from any flaw.

List of Cases Reviewed

• • Anheuser Busch Inbev India Ltd. v. Pradeep Kumar Sravanam, Resolution Professional of East Godavari Breweries (P.) Ltd. [2023] 152 taxmann.com 543 (NCLT – Amaravati) (para 40) affirmed [See Annex].

List of Cases Referred to

• • Union of India v. Raman Iron Foundry [1974] 2 SCC 231 (para 15)
  • S. Rajendran v. Jonathan Mouralidarane [2020] 117 taxmann.com 468 (NCLAT – New Delhi) (para 19)
  • Innoventive Industries Ltd. v. ICICI Bank Ltd. [2017] 84 taxmann.com 320/143 SCL 625 (SC) (para 21)
  • Pioneer Urban Land & Infrastructure Ltd. v. Union of India [2019] 108 taxmann.com 147/155 SCL 622 (SC) (para 22)
  • Export Import Bank of India v. Resolution Professional, JEKPL (P.) Ltd. [2018] 97 taxmann.com 194 (NCLAT – New Delhi) (para 23)
  • Swiss Ribbons (P.) Ltd. v. Union of India [2019] 101 taxmann.com 389/152 SCL 365 (SC) (para 24)
  • Reliance Commercial Finance Ltd. v. Ved Cellulose Ltd. [2017] 83 taxmann.com 276 (NCLT – New Delhi) (para 25)
  • Indian Agro and Food Industries Ltd. v. Gouthami Healthcare (P.) Ltd. [CPCIB) No. 33/7/HDB/2020], dated 19-1-2021] (para 25)
  • Tamil Nadu Generation and Distribution Corpn. Ltd. v. Savan Godiawala Liquidator-Lanco Infratech Ltd. 2020 SCC Online NCLT 7674 (para 26)
  • Bank of India v. Shrenuj and Company Ltd. 2019 SCC online NCLT 3264 (para 27).