Sudhi Sachdev Vs. APPL Industries Limited [Company Appeal At (Insolvency) No. 623 of 2018] - Synopsis
Team SoOLEGAL 9 Mar 2021
FACTS:
In this case, Sudhi Sachdev Vs. APPL Industries Limited [Company Appeal At (Insolvency) No. 623 of 2018], the National Company Law Appellate Tribunal had ruled that, where a lawsuit is pending under Section 138/441 of the Negotiable Instruments Act, 1881, it cannot be held to be an issue pending before a court of law. The case pending shall be the admission of the debt and not the presence of a dispute. NCLAT was hearing an appeal against an order passed by the National Company Law Tribunal, New Delhi Bench in which the Adjudicating Authority had authorized the application filed by APPL Industries under Section 9 of the Insolvency & Bankruptcy Code, 2016, and had also passed a moratorium order. On appeal, the appellant had pleaded that there was already a dispute since the APPL had already brought a lawsuit under section 138/441 of the NIA, which was pending in Gurgaon. The action under section 138 is a legal lawsuit for the recovery of money and thus, in view of the pending outcome of the litigation, an appeal under section 9 of the IBC could not be maintained.

DECISION OF THE COURT:
The pendency of the litigation under Section 138/441 of the Negotiable Instruments Act,1881, even though it is admitted as a restitution action, cannot be held to be a dispute pending before a court of law. Therefore, Hon'ble NCLAT had held that the pendency of the litigation under Section 138/441 of the Negotiable Instruments Act, 1881 was in fact the admission of debt and not the presence of a dispute. Hon'ble NCLAT did not see any merit in the appeal and the appeal was rejected.
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