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Neelkanh case: judgment requires reconsideration

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Category: IBC

Published: 04 September 2022

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The judgment of the Hon’ble NCLAT in the case of Neelkanth Medicare Pvt Ltd Vs ICI Healthcare Pvt Ltd requires reconsideration

In this judgment, Neelkanth Medicate Pvt Ltd is the Operational Creditor (OC-Appellant) and ICI Healthcare Pvt Ltd is the Corporate Debtor (CD-Respondent).

The petition under section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) filed by the OC against the CD was dismissed by the NCLT.

One of the reasons for dismissal of the Company Petition by the NCLT was that the demand notice under Section 8 of the IBC was not supported with the Board Resolution of the OC authorising the issue of such demand notice and consequently, not authorising the filing of Company Petition under Section 9 of the Code.

The OC submitted that the NCLT failed to consider that Board Resolution of the OC dated 02.07.2019 whereby Mr. Jatinder Kumar was authorised to take action against the CD under IBC.

The CD contends that the notice under section 8 of the IBC dated 23.08.2019 was replied on 02.09.2019. But the judgment did not discuss whether the CD disputed the Board Resolution or not.

At page No.10, the Hon’ble NCLAT recognised that Mr. Jatinder Kumar was from Appellant’s (OC) side and Mr. Naveen Jain was from Respondent’s (CD) side.

However, at page 11, the Hon’ble NCLAT finds that the Board Resolution passed by ICI Healthcare Pvt Ltd (which is actually the CD) on 31.02.2020 (must be a typo) authorises Mr. Naveen Jain (recognised as CD’s person in page No.10 by the Hon’ble NCLAT) to represent the Company and take necessary action before the Hon’ble Court of Ahmedabad. Then, the Hon’ble NCLAT continues to say that the demand notice under Section 8 of the IBC sent by the Appellant (Neelkanth, the OC) to the CD on 21.08.2019 and the application under Section 9 of the IBC on 01.10.2019 were much before the Board Resolution, without appreciating the fact that the Board Resolution of ICI Healthcare Pvt Ltd was the respondent whereas the comparison was made with the notice issued and application filed by the Appellant.

For the sake of clarity, the facts are summarised below:

OC/Appellant: Neelkanth Medicare Pvt Ltd

Authorised person of OC/Appellant: Mr. Jatinder Kumar

Date of Board Resolution of OC as claimed by the OC: 02.07.2019

CD/Respondent: ICI Healthcare Pvt Ltd

Authorised person of CD/Respondent: Mr. Naveen Jain

Date of Board Resolution of CD/Respondent (ostensibly to fight against the Company Petition filed by the OC): 31.02.2020 (must be typo)

Demand notice sent by the OC on: 21.08.2019

Company Petition filed by the OC on: 01.10.2019

When we see from the angle of the Appellant, the Board Resolution was on 02.07.2019 and the demand notice was on 21.08.2019 and Company Petition was filed on 01.10.2019. Therefore, they are in perfect chronological order.

However, the Hon’ble NCLAT compared the Board Resolution of the Respondent with the dates of acts done by the Appellant and concluded that these were without authority.

The Hon’ble NCLAT did not decide on the fact whether the Board Resolution dated 02.07.2019 as claimed by the Appellant is in fact, existing. In case there was no Board Resolution, the Hon’ble NCLAT could have dismissed the appeal on that count.

Therefore, this judgment requires reconsideration to decide whether the claimed Board Resolution on 02.07.2019 of the OC exists or not.