Can a decree holder file an application under Section 9 of the IBC and Can the Date of default be shifted forward to the date of decree? – Venus Buildtech India Pvt. Ltd. Vs. Senbo Engineering Ltd. – NCLT Kolkata Bench
August 11, 2023
In this case the Operational Creditor has stated the date of default to be as on 06 March, 2020 i.e., the date of execution order. However, the Operational Creditor had filed a civil suit under Order 37 of the Code of Civil Procedure, 1908 in the month of November, 2010.
NCLT Kolkata Bench held that:
(i) The civil suit was filed by the Operational Creditor on non-receipt of payment from the Corporate Debtor, which means that default must have occurred then and triggered the Operational Creditor to file a suit for recovery. Hence, time must have begun then.
(ii) The issue, can a decree holder file an application under section 9 of the Code? has been settled by the Hon’ble Tripura High Court in Sri Subhankar Bhowmik (2022) ibclaw.in 75 HC where the Hon’ble High Court has held the inescapable conclusion from the aforesaid discussion is, that the IBC treats decree holders as a separate class, recognized by virtue of the decree held. The IBC does not provide for any malleability or overlap of classes of creditors to enable decree holders to be classified as financial or operational creditors.
(iii) Distinction of decree holders as creditors from ‘financial creditors’ and ‘operational creditors’, as seen aforesaid is intelligible and take forward the purpose of the Code.
