Parties adopting International Law in the agreement are not barred from taking recourse under the I&B Code: NCLAT
NCLT has jurisdiction to entertain an application under the IBC the parties cannot derive the advantage of the terms of the. An agreement where parties agreed that any suit or case is maintainable only in a Court outside India. The order passed by the NCLAT New Delhi in its decision in   Excel Metal Processors Limited Benteler Trading International GMBH and Anr (Company Appeal (AT) (Insolvency) No. 172 of 2020)   by Hon’ble Shri  Justice S. J. Mukhopadhaya and Justice A.I.S. Cheema The facts of the case were such that – Mr. Imran Iqbal Khan who is the director of the Corporate debtors/appellant company filed an application to substitute himself as the appellant in place of Corporate Debtor and transpose the appellant through Interim Resolution Professional. The tribunal allowed Mr. Imran Iqbal to be treated as sole appellant and delete the name of the first appellant/Corporate debtor. The Respondent/Operational Creditor recorded an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 against Excel Metal Processors Private Limited/Corporate Debtor asserting that the ‘Corporate Debtor’ submitted default on 27th March 2016 in making the installment to a degree of US $1,258,219.42 comprehensive of premium @ 15% per annum. Challenging the order of adjudicating authority the counsel on behalf of Appellant/Mr. Imran submitted referring the Understanding came to between the gatherings and presented that according to the Arrangement and as the Workplace of the Respondent/Operational Creditor is in Germany, any suit or case is viable just in the Court at Germany. No case can be recorded in any Court in India. Subsequently, Guidance has brought up the issue of the locale of the NCLT, in engaging the application under Segment 9 of the I&amp;B Code. But in the landmark judgment of NCLAT in the case of Binani Industries Limited vs. Bank of Baroda and Anr tribunal held that ‘Corporate Insolvency Resolution Process’/ insolvency proceedings is not a ‘suit’ or a ‘litigation’ or a ‘money claim’ for any litigation; No one is selling or buying the ‘Corporate Debtor’ a ‘Resolution Plan’; It is not an auction; it is not a recovery, which is an individual effort by the creditor to recover the dues through a process that had debtor and creditor on opposite sides; and it is not liquidation. The object is merely to get resolution brought about so that the Company do not default on dues. Talking about the jurisdiction Appellate Authority according to section 408 of the Organizations Act, 2013, the NCLT has been comprised in various States. As far as the said arrangement, the Focal Government has informed and vested the force on individual Public Organization Law Councils to manage the matter inside its region, where the enrolled workplaces of the Organizations are arranged. According to Segment 60(1) of the I&amp;B Code, “The Settling Authority, comparable to bankruptcy goal and liquidation for corporate people including corporate borrowers and individual underwriters thereof will be the Public Organization Law Court having regional locale over where the enrolled office of the corporate individual is found”.
NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI Company Appeal(Insolvency) No. 7819 IN THE MATTER OF: Excel Metal Processors Limited Appellant Benteler Trading International GMBH and Anr. Respondents For Appellant: Mr. Javeed Hussain amd Mr. Ashish Rana O R D E R 21.08.2019 An application for substitution has been filed by Mr. Imran Iqbal Khan Director of ‘Corporate Debtor’ M s Excel Metal Processor Limited to substitute him as the Appellant in place of M s Excel Metal Processors Limited and transpose M s Excel Metal Processors Limited through ‘Interim Resolution Professional’ as Respondent. However as we find that Mr. Imran Iqbal Khan is already Appellant No.2. we allow the Appellant to delete the name of the 1st Appellant M s Excel Metal Processors Limited from the Cause Title and to treat Mr. Imran Iqbal Khan as sole Appellant. M s Excel Metal Processors Limited through ‘Interim Resolution Professional’ is allowed to be impleaded as 3rd Respondent. Counsel for the Appellant will make necessary corrections in the Cause Title of the paper book and the Cover Page in course of the day. The Respondent Benteler Trading International GMBH a German Company filed application under Section 9 of the Insolvency and Bankruptcy Code 2016 against Excel Metal Processors Private Limitedalleging that the ‘Corporate Debtor’ committed default on 27th March 2016 in making the payment to an extent of US $1 258 219.42 inclusive of interest @ 15% per annum. The Adjudicating Authority Mumbai Bench by impugned order dated 25th June 2019 having admitted the application the Appellant Imran Iqbal Khan Director has challenged Company Appeal(Insolvency) No. 7819 the said order. Learned Counsel appearing on behalf of the Appellant referred to the Agreement reached between the parties and submitted that as per the Agreement and as the Office of the Respondent Benteler Trading International GMBH is in Germany any suit or case is maintainable only in the Court at Germany. No case can be filed in any Court in India. Therefore Counsel has raised the question of jurisdiction of the National Company Law Tribunal Mumbai Bench in entertaining the application under Section 9 of the I&B Code. However we are not inclined to accept the aforesaid statement as it is now settled and decided by this Appellate Tribunal in Binani Industries Limited vs. Bank of Baroda and Anr. Company Appeal Insolvency) No.818 etc. decided on 14th November 2018 wherein it was held that ‘Corporate Insolvency Resolution Process’ insolvency proceedings is not a ‘suit’ or a ‘litigation’ or a ‘money claim’ for any litigation No one is selling or buying the ‘Corporate Debtor’ a ‘Resolution Plan’ It is not an auction it is not a recovery which is an individual effort by the creditor to recover the dues through a process that had debtor and creditor on opposite sides and it is not liquidation. The object is mere to get resolution brought about so that the Company do not default on dues. Pursuant to Section 408 of the Companies Act 2013 the National Company Law Tribunal has been constituted in different States. In terms of the said provision the Central Government has notified and vested the power on respective National Company Law Tribunals to deal with the matter within its territory where the registered Offices of the Companies are situated. As per Section 60(1) of the I&B Code “The Adjudicating Authority in relation to insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors thereof shall be the National Company Law Tribunal having territorial jurisdiction over the place where the registered office of the corporate person is located”. As admittedly the Registered Office of the ‘Corporate Debtor’ namely Excel Metal Processors Private Limited is situated at 132 B Mittal Towers Nariman Point Mumbai 400021 we hold Company Appeal(Insolvency) No. 7819 that the National Company Law Tribunal Mumbai Bench has the jurisdiction to entertain an application under Section 9 of the I&B Code and the Appellant cannot derive advantage of the terms of the Agreement reached between the parties. Next it was pointed out that the ‘Corporate Debtor’ was not served with the Demand Notice in terms of Section 8(1) of the I&B Code. However from the record we find that Demand Notice under Section 8(1) of the I&B Code was issued by the Respondent ‘Operational Creditor’ on 6th March 2018 demanding the repayment of US $971 412.98 plus ancillary obligations 15 % p.a. amounting to US $286.804.44 and despite receiving of the said Demand Notice the ‘Corporate Debtor’ had not replied nor repaid the outstanding dues. The Adjudicating Authority has as such not accepted such plea based on record. In spite of the same we gave option to the Appellant to suggest whether the Appellant or the ‘Corporate Debtor’ would agree to repay the debt as payable to the ‘Operational Creditor’ but it is informed that the ‘Corporate Debtor’ or the Appellant is not in a position to do so. For the reasons aforesaid we are not inclined to interfere with the impugned order dated 25th June 2019 and in absence of any merit the Appeal is accordingly dismissed. No cost. Justice S. J. Mukhopadhaya] Justice A.I.S. Cheema] MemberKanthi Narahari] MemberCompany Appeal(Insolvency) No. 7819 