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2021 (9) TMI 334 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial creditors failed to make repayment of its dues - Rate at which green tea supplied, was not mentioned - amount payable and the date of default established or not - existence of debt and dispute or not - HELD THAT:- It is evident from the Agreement that the Rate per kg. of green tea leaves is not fixed on the date of agreement. It would be fixed in future. On the other hand, the Respondent is expected to supply 12.50 lacs kgs. of quality green tea leaves to the Applicant without knowing the rate. It is clearly established that the amount payable and its due date are not known neither to the Petitioner nor to the Respondent. Hence, the amount payable and the date of default is not established - It is further found from the documents and submissions made during the arguments that the Applicant has not provided the details to the Respondent relating to the quantum of green tea leaves received, rate at which it is sold, the amount of sales proceeds credited and the said bank account maintained. Derivative arrangement or provision is also not there. The Auditor has not shown this amount as Overdue/NPA in its report. Tea Industry is a going concern. The Applicant has reportedly given further advance of ₹ 98,50,000.00 on its own. Auditor has reported that the copy of the Original Agreement was not furnished to them while the balance sheet was being prepared by them. No further balance sheet has been prepared after 31.03.2018. Existence of debt and dispute or not - HELD THAT:- One of the prime conditions for admission of Application filed under Section 7 of IBC is that there should exist a debt which has become due and payable by the CD, the CD has committed default in payment of the same on due date and the date of default must be established. In this case, the documents have not been produced by the Petitioner to show the quantum of green tea leaves received from CD, the rate at which green tea leaves purchased/sold and the amount payable to/receivable from the CD and thereby it is clear that the amount of default and the date of default are not established. Then the pleadings of the Applicant that the Respondent has defaulted in making payment of the amount due do not carry any substance - the Application filed under Section 7 of IBC needs to be rejected on this ground also. The appropriate Authority may take cognizance of prevailing of this type of Agreement and take suitable measures so these type of Agreements with such terms and conditions are not in operations and the needy Tea Estates Companies availing advance from others for supply of Green Tea Leaves are prohibited from the Debt Trap, Exploitation, Imminent Closure, Hostile Takeover and Liquidation, When Advances/loans are available from the established Financial Institutions/Banks with transparent, fair terms & conditions, insurance coverage and reasonable/lower rate of interest to the Tea Estates/Tea Plantation/Agriculture Advance/MSME Tea Industries. This Application filed under Section 7 of IBC is rejected.
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