TMI Blog2017 (7) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... e management of the Corporate Debtor are duty bound to extend all assistance and co-operation to Interim Resolution Professional as may be required for managing the affairs of the Corporate Debtor. In case such co-operation is not rendered, then the interim resolution professional shall be entitled to file application before this Tribunal as per the terms of Section 19(2) of the Code. - C.P. NO. (I.B.) 64/PB/2017 - - - Dated:- 24-5-2017 - MR. M.M. KUMAR, AND MR. R. VARADHARAJAN, JJ. For The Petitioner : Vivek Sibal and Ms. Pooja Saigal, Advocate For The Respondent : U.K. Chaudhary, Sr. Advocate, Ajay Garg and Himanshu Vij. ORDER 1. Macquarie Bank Limited (for brevity the 'Applicant'), being an assignee of the S.V. Oversees Private Limited (for brevity the 'Supplier') has filed the instant application under Section 8 and 9 of the Insolvency and Bankruptcy Code, 2016 (for brevity the 'Code') against Shilpi Cable Technologies Limited, New Delhi-the Corporate Debtor (for brevity the 'Corporate Debtor'), for committing default in making the payment of operational debt amounting to US Dollar 3,010,150.00, which is equivalent to S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000.00 to the Operational Creditor upon expiry of 180 days from the date of Bill of Lading. The Bill of Exchange has been accepted by the Corporate Debtor (Annexure-8). 5. The 'Supplier' in the meanwhile under subsisting receivables purchase agreement dated 08.07.2015 with the Operational Creditor, vide a purchase order dated 30.03.2016, requested the 'Applicant' to purchase the receivables arising out of the Invoice no. SVO/ 15-16/555 dated 28.03.2016 for an invoice value of USD 3,870,000.00 against which supplies had been effected by the supplier to the Corporate Debtor. A copy of the purchase request dated 30.03.2016 (Annexure-9) and the receivables purchase agreement dated 08.07.2015(Annexure-11) have been placed on record. The receivables were purchased by the 'Applicant' vide purchase confirmation dated 14.04.2016. Accordingly, the Applicant cum Operational Creditor become the assignee of debt owed by Corporate Debtor to the seller for the goods supplied. A copy of the purchase request dated 30.03.2016 has been placed on record (Annexure-10). 6. In terms of Section 8 of the Code, the Applicant-Operational Creditor issued demand notice dated 08.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 5(20) of the Code. According to the aforesaid provisions an Operational Creditor is a person to whom an operational debt is owed and as per Section 5(21) an operational debt is a claim in respect of the provision of goods or services including employment and government dues. There is no legal assignment of the claim in favour of the Applicant and the Operational Debtor is liable to make the payment to the supplier namely S.V. Overseas Pvt. Ltd. and not to the Applicant under the English Law. The Answering Respondent has not acknowledged the assignment of claim in favour of the Applicant. Therefore, the Applicant cannot be an Operational Creditor and therefore, no direct claim can be raised by it against the Answering Respondent. The amount of the transaction is insured with the Insurance Company Euler Hermes, Singapore. The insurer had provided credit insurance cover to the Corporate Debtor against invoices raised on it which have been wilfully suppressed in the present application. 10. The Corporate Debtor had also alleged that the Applicant is guilty of wilful suppression of material facts and has approached the Tribunal with uncleaned hands. It has suppressed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made on Documents against Acceptance, 180 days after the bills of lading dated 23.03.2016 which was to be considered as a due date. However, the debt has been subsequently assigned to the Applicant in April 2016 despite the request of extension having been made for payment. An attempt has been made by the Corporate Debtor to show that the Applicant and the supplier had agreed to the extension of time to make payment of the Invoice Sum on the condition that the Corporate Debtor would trade directly with the Applicant on further trades on 180-day credit payment terms. On the aforesaid basis, it is sought to be submitted in para 20 and 21 of the reply that the terms of agreement stood amended by conduct to the effect that the Applicant would conduct and complete further trades with the Corporate Debtor on a 180-day credit terms which was not limited to the other agreements but was inclusive of the invoice under dispute. In para-22, it has also been submitted that the agreement was amended to the effect that the due date was no longer binding on the Corporate Debtor and it was allowed further time to make payments towards the Invoice Sum to the supplier. Accordingly, the Corporate De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being disposed of. The first objection; The Applicant is not an Operational Creditor because neither any goods have been supplied by the Applicant nor any service is rendered by it. The Applicant (Operational Creditor) is merely an assignee of the debt. This argument does not require any detailed consideration because the expression 'Operational Creditor' has been defined in Section 5(20), which reads as under: 20. Operational creditor means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred . 16. A bare perusal of the aforesaid provision taken from Part-II, Chapter-I of the Code and is applicable to Insolvency Resolution and Liquidation for corporate persons would show in unequivocal term that an Operational Creditor is a person to whom an operational debt is owed and include any person to whom such debt has been legally assigned or transferred. The assignment to the Applicant is lawful and no legal flaw would ensue if the Corporate Debtor has not acknowledged it. Mr. Chaudhary, learned Counsel has not been able to show us any legal provision to that effect. By no stretch of imagination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice of the operational creditor- (a) existence of a dispute, if any, and record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute . 18. A perusal of the aforesaid statutory mandate admits no other interpretation except one that the dispute must be in existence before the receipt of demand notice or invoice in relation to such dispute. In the present case, admittedly the demand notice was sent on 08.03.2017 and reply to the demand notice was sent by the Corporate Debtor on 20.03.2017, which is much earlier than the notice for interim arbitration sent on 19.04.2017. The Judgment of this Bench in the case of Annapurna Infrastructure (P.) Ltd. v. Soril Infra Resources Ltd. - C.P. No. (IB)-22(PB)/2017 dated 24.03.2017 has been relied upon. However, we find that the reliance on Annapurna's case is wholly misplaced because the aforesaid view is no authority for the proposition that the demand notice even if received earlier to the date of dispute then the Corporate Debtor can invoke the bar to trigger the insolvency and bankruptcy process. In that case, the arbitration proceedings have co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has also not impressed us and is liable to be rejected. Apart from mentioning that the English Law is applicable nothing has been pointed out how English Law provides any remedy different than the Insolvency provided by the Code. It was again a 'touch and go' argument. 22. Then lastly an insignificant error has been pointed out in filling the particulars in Col. No. 6. The Applicant should have filled up the name and address of the Power of Attorney. Erroneously it has given the details of the legal firm. This is condonable fault and cannot constitute a basis to throw this application. Accordingly, this last submission too is rejected. 23. As a sequel to the above discussion, the Application is admitted. We declare a moratorium in terms of Section 13 of the Code for the interim resolution professional to follow various provision and comply with each one of those. Section 14 of the Code shall also come in operation. The Interim Resolution Professional shall take all steps in terms of Section 13 (2), Section 14 15 of the Code. As no insolvency resolution professional has been named by the Applicant we request the Insolvency and Bankruptcy Board of India (IBBI) to ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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