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2017 (4) TMI 1111 - Tri - Insolvency and BankruptcyPetition filed u/s 9 of Insolvency and Bankruptcy Code 2016 against a corporate debtor company - default in making payment - interest claim - Held that:- In the given situation, this debtor company figures have gone into minus, P &L statement as on 31st March 2016 of the company reflects profit after tax has gone down to -1551.51crores. This company has not paid single rupee to these creditors in the last three years, it is admitted on record millions of dollars' worth goods purchased from them in the year 2013 by this company showing itself up as purchaser giving all kinds of undertakings waiving right of defence. Now, it says that these goods were delivered to some third party, not to it. It is in between the debtor and that third party, what business these creditors have with that third party, it does not appear in any documentation and that third party is privy to any transaction. The objection of the corporate debtor is that so many complexities are existing in this dispute, for which since they have filed a suit before Hon'ble High Court of Bombay after receipt of notice, therefore taking pendency of the suit filed subsequent to receipt of section 8 notice, this IB petition is to be dismissed. But the argument of the corporate debtor counsel not being in consonance with the mandate of the statute u/s 8, this petition can't be dismissed going by the argument of the counsel of Uttam because filing of a suit or arbitration proceedings subsequent to receipt of notice u/s 8 will not amount to existence of dispute as stated u/s 8 of IB Code. Under any stretch of imagination, the argument of the corporate debtor counsel does not make out any case to construe the corporate debtor filing a suit over this claim subsequent to receipt of notice as dispute in existence, henceforth this point is decided against the corporate debtor. Here in the present case, the power of attorney was given only two months before filing this case mentioning what are the actions the attorney holders to take up, against whom it is to be taken up, therefore it can't be said that since it is not a winding up proceeding, this power of attorney cannot be used to file insolvency proceeding IB Code. The nature of proceedings under winding up as well as insolvency is more or less same. Here the corporate debtor has not come forward making any payment to the creditors in 180 days 'maturity time given. Thereafter, almost three years are over. Still this company has not made any payment to the creditors, now has come forward making allegations that power of attorney is not valid, bill of exchange is not valid, forfaiting to the second creditor is not valid but it is nowhere said that the AIC has not sent the goods to the destination ordered by this debtor in the purchase order. It is also not the case of the debtor that goods were not reached to the destination; in fact, he accepted bill of exchanges and thereafter confirmed the forfaiting agreement in between the first creditor and the AIC. When we see the basic difference to financial debt and operational debt, it is clear that financial debt is money borrowed to repay on future date along with interest, here the money is lent for value addition to the money as agreed between the parties, whereas operational debt is normally based on an agreement to pay to goods or services, it does not mean that interest cannot be claimed in the times to come, it is a normal practice that trade payables are payments deferred for a fixed time, if the party fails to repay within the fixed time, then interest will be claimed over operational debt as well, the same happened over here as well. The corporate debtor himself said in the written submissions that there is email dated April 10,2014 from the corporate debtor in respect to payment of interest, since collaterals are Bills of exchange, even otherwise also, basing on collaterals entitled to interest at the rate of 18% u/s 80 of the Negotiable Instruments Act. The difference in these two transactions is one given to get interest over the money; second transaction happens in business operations, in both the cases money is involved, as days go by after transaction, the time value of money will be there. For that reason, it is nowhere said that the operational creditor is barred from claiming interest. In this case, credit has been given free of interest for 180 days, the debtor has not paid, from the date of maturity, almost three years over, still no payment has come to the operational creditors. Let us test how far this argument is right, one - it is admittedly true Uttam accepted two bills of exchange promising to pay the value of goods within 180 days, thereafter Uttam has not made any payment, by now more than three years and six months are over. For the reasons above and the material available on record showing compliance under section 9 of the code, this petition is hereby admitted and Registry is hereby directed to refer it to the Insolvency and Bankruptcy Board to recommend the name of an IRP to appoint him in this case.
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