The National Company Law Appellate Tribunal (NCLAT) has ordered for setting aside the insolvency proceedings that were supposed to be initiated against Romesh Power Products after it was found out that the complaint against the company was filed with malicious intent.
Rajdhani Traders Company was one of the operational creditors of Romesh Power Products and had filed a plea for the initiation of insolvency proceedings against the latter. The complaint was filed for default over the supply of goods o South Bihar Power Distribution Company even after being aware of the fact that it would be paid directly by the Distribution Company.
The Jaipur bench of National Company Law Tribunal had ordered for the initiation of insolvency proceedings against Romesh Power Products on December 20, 2018, and had refused to recall its order on February 21, 2019. The order dated December 20, 2018, was awarded ex-parte on Rajdhani Traders’ plea.
The Appellate Tribunal said that the plea filed under section 9 was not maintainable as it was filed a purpose other than the insolvency or the liquidation of the company. Therefore it said that both the orders dated December 20, 2018, which was awarded ex-parte and that of February 21, 2019, refusing to recall the matter has been set aside by the Appellate Tribunal.
It has also directed the operational creditor and corporate debtor (Romesh Power Products) to pay the interim resolution professional his fee including the costs for 30 days.
The Rajdhani Traders Company had supplied some goods to the South Bihar Power Distribution Company on the direction of Romesh Power Products; this was a project for rural electrification. Subsequently, the power Distribution Company had agreed to pay an amount including dues of Rs. 12 crores to Rajdhani Traders Company. This fact went unnoticed by the NCLT Jaipur bench and thus it had passed an ex-parte decree in the favor of Rajdhani Traders Company.