NCLAT : In Sudhi Sachdev vs. APPL Industries Ltd.

The pendency of the case under Section 138/441 of the Negotiable Instruments Act, 1881, even if accepted as recovery proceeding, it cannot be held to be a dispute pending before a court of law.

In this present case, the appeal has been filed by the Appellant against order dated 2nd August, 2018 passed by the Adjudicating Authority whereby the application under Section 9 of I&B Code preferred by Respondent – ‘APPL Industries Ltd.’ has been admitted and order of moratorium has been passed.

The learned counsel of the Appellant submits that there was an existence of dispute in view of the fact that the Respondent has instituted cases under Section 138/441 of Negotiable Instruments Act, 1881, which are pending in the court of Metropolitan Magistrate, Gurgaon.

The Appellate Authority dismissed the appeal stating that the pendency of the case under Section 138/441 of the Negotiable Instruments Act, 1881, even if accepted as recovery proceeding, it cannot be held to be a dispute pending before a court of law. Thereby the Appellate Authority hold that the pendency of the case under Section 138/441 of Negotiable Instruments Act, 1881 actually amounts to admission of debt and not an existence of dispute.

Link : https://nclat.nic.in/Useradmin/upload/15642763955bebafb8c1669.pdf