Dispute regarding quantum of admitted liability is immaterial at admission stage of CIRP application: NCLAT

Case details: Apya Capital Services (P.) Ltd. v. Guardian Homes (P.) Ltd. - [2021] 129 taxmann.com 393 (NCLAT- New Delhi)

Judiciary and Counsel Details

• • Justice Bansi Lal Bhat, ACTG. Chairperson Anant Bijay Singh, Judicial Member and DR. Alok Srivastava, Technical Member.
    
  • Abhijeet Sinha, Ms. Bani Dikshit and Farman Ali, Advs. for the Appellant. 
  • Ms. Priya Hingorani, Sr. Adv. and Himanshu Yadav, Adv. for the Respondent.

Facts of the Case

The Appellant provided its services to the corporate debtor for raising finance to extent of Rs. 280 crores in respect of whereof it raised a proforma invoice for its fees at a rate of 1 percent, i.e., Rs. 2.80 crores.

The Corporate debtor raised the issue of delay in providing service; however, claimed to have amicably decided to conclude the deal at a fee of Rs. 150 lakhs out of which Rs. 75 lakhs had been admittedly paid.

On being aggrieved, the Appellant issued demand notice claiming an amount of Rs. 2.05 crores and further filed Corporate Insolvency Resolution Process (CIRP) application against the corporate debtor.

However, the Adjudicating authority rejected the CIRP application holding that there was no debt as claimed by the appellant besides there being a deficiency in service provided by the appellant.

NCLAT Held

The Adjudicating Authority stated that once liability was admitted and the same was not discharged by the corporate debtor, the dispute in regard to the quantum of debt was immaterial at the stage of admission of CIRP application.

Therefore, the order of Adjudicating Authority was to be set aside and application of the appellant was to be admitted after giving an opportunity to a corporate debtor to settle a claim of the appellant.

Case Review

• • Apya Capital Services (P.) Ltd. v. Guardian Homes (P.) Ltd. [2021] 129 taxmann.com 392 (NCLT – Mumbai) (para 9) set aside