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M/s. Z-Tronics Infratel Pvt. Ltd. Versus M/s. Wipro Enterprises Pvt. Ltd.

2018 (2) TMI 884 - NATIONAL COMPANY LAW TRIBUNAL, BENGALURU

Corporate Insolvency Resolution Process - Held that:- We have seen the primary document, Annexure-R/1 which is entered between M/s. Blue Star Alloys Pvt. Ltd. and the respondent company. The respondent company has also relied on Annexure-R/5, the power of attorney given by M/s. Blue Star Alloys Pvt. Ltd., in favour of Shri Mohammed Saleem Shaikh wherein he was only an authorised representative to lift the scrap material from the respondent company and that too on behalf of M/s. Blue Star Alloys .....

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The Petitioner : Harsha H.M. and Chandrashekar S., Advs. For The Respondent : S.P.J. Legal, Adv. ORDER Per : Hon'ble Shri Ratakonda Murali, Member (Judicial) : Heard on 20.04.2017, 28.04.2017, 31.05.2017, 07.07.2017, 27.07.2017, 09.08.2017, 30.08.2017, 20.09.2017, 17.10.2017, 14.11.2017 and 20.12.2017. The Petitioner/Corporate creditor has filed Form No.5 under Rule 6 of the I & B Code, being the Operational creditor to initiate Corporate Insolvency Resolution Process against the Corpor .....

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aler and is engaged in the business of purchase of industrial scrap material and supplying and selling to various smelling units. It is stated that the Corporate Debtor was engaged in the manufacture of sunflower oil and therefore, it was interested to sell industrial scrap material arising out of the manufacturing process. The Operational Creditor has further contended that M/s. Blue Star Alloys Pvt. Ltd., approached the petitioner along with Corporate Debtor for sale of industrial scrap. A pur .....

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lent to the amount remitted. It is averred that in all an amount aggregating to ₹ 1,01,00,000/- was remitted by the Operational Creditor for the period from 11.10.2013 to 11.04.2014. Therefore, the Operational Creditor is entitled to lift the industrial scrap worth ₹ 1.01 crores. However, it had only lifted the industrial scrap worth ₹ 62,63,845/- and an amount of ₹ 38,36,151/- is still lying with the Corporate Debtor. The Respondent/Corporate debtor did not allow the Ope .....

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ebtor. There is no agreement between the petitioner and the respondent and as such, there does not exist any liability to pay. The petitioner is not at all the operational creditor and as such the petition is liable to be dismissed. It is averred that the respondent had entered into an agreement with M/s. Blue Star Alloys Pvt. Ltd., for the sale of Vanaspati plant equipment and dismantling of complete structure and its disposal outside the Wipro factory premises. The total sale consideration was .....

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Further, an amount of ₹ 5.00 lakhs with applicable tax was to be paid before every despatch. Penalty is also provided that if the work is not likely to be completed by 31.12.2013. It is stated that since M/s. Blue Star Alloys Pvt. Ltd., has failed to complete the terms of agreement, therefore, the agreement came to an end by lapse of time. Further, M/s. Blue Star Alloys Pvt. Ltd., had requested for extension of time. It was extended subject to mutually agreed conditions. This is transpire .....

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ation for each work executed by M/s. Blue Star Alloys Pvt. Ltd. along with Certificate of Remittance from the petitioner. The CORs are received for adjustment against the sale agreement entered between the Respondent Company and M/s. Blue Star Alloys Pvt. Ltd. Further, the deadline for completing the agreement was by 22.05.2014. Thereafter, the Respondent Company had issued a forfeiture notice as M/s. Blue Star Alloys Pvt. Ltd., had failed to honour the terms of the agreement. A copy of the noti .....

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has sought refund of ₹ 32,73,563/- along with interest aggregating to ₹ 49,25,621/-. Sometime later, again a notice of demand was issued by the petitioner to the respondent demanding ₹ 65,70,763/- consisting of principal amount + interest thereon. Thus, the respondent Company denies any agreement with the applicant/petitioner company and the respondent has contended that the petitioner is not at all an operational creditor for the respondent and as such, there is no debt and, c .....

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- Operational Creditor to the Respondent Company and an agreement for lifting of the industrial scrap was duly entered into between them. The counsel would contend that the petitioner was allowed to lift the industrial scrap on payment of money in advance to the Respondent corporate debtor which was made through certificate of remittances and the petitioner operational creditor was allowed to lift such quantity of industrial scrap equivalent to the value of amount remitted. The counsel contende .....

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o supply the industrial scrap for the surplus amount lying with it, then, it ought to have returned the amount to the operational creditor. But, the respondent had failed to do so. Therefore, the petitioner-operational creditor had issued a demand notice dated 24.03.2017 under Rule 5 of I & B Rules. As per the demand notice, the operational creditor has demanded an amount of ₹ 65,15,325/-. Counsel contended that the respondent- corporate debtor did not reply. Therefore, the application .....

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t- corporate debtor. The contention of the learned counsel that the petitioner-operational creditor is able to establish that it had remitted the amount to the account of respondent-corporate debtor and the industrial scrap worth ₹ 62,63,845/- out of ₹ 1.01 crores was only lifted. Therefore, it is contended that there is a direct contract between the parties and now the respondent-corporate debtor cannot dispute the contract which was acted upon. The counsel further contended that th .....

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aring for the respondent-corporate debtor would contend that the respondent-corporate debtor had in fact, entered into contract with M/s. Blue Star Alloys Pvt. Ltd. for sale of Vanaspati plant. The counsel contended that Annexure-R/1 is the copy of the contract between M/s. Blue Star Alloys Pvt. Ltd. and M/s. Wipro Enterprises Pvt. Ltd. Counsel contended that there is no privity of contract between the petitioner and the respondent company. Therefore, the petitioner has no locus standi to initia .....

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16 which is as under: as a claim in respect of the provision of goods or services including employment or a debt in respect of the repayment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority. Counsel contended that there is no agreement for service in this case between the petitioner and the respondent per-se. Therefore, there does not lie any liability to pay. Counsel contended that the petitioner is not .....

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has relied on the agreement between M/s. Wipro Enterprises Ltd. and M/s. Blue Star Alloys Pvt. Ltd. which is shown as Annexure-R/1 to the reply statement. It is true that Annexure-R/1 discloses that the contract was entered between the respondent company and M/s. Blue Star Alloys Pvt. Ltd. and that there are so many conditions in the work contract. The value of the contract is ₹ 4.15 crores. The agreement does not permit any sub-contract and only authorised representative of purchaser to b .....

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me was mutually extended till 25.01.2014. This is evident from the e-mail from Annexure-R/2. It is true that the term of contract was extended till 25.01.2014 and the petitioner company is given a time schedule for completion of the contract in the memo attached. No doubt, this e-mail was also issued on behalf of the petitioner company signed by Mr. Mohammed Saleem Shaikh. The contract could not be completed even on the extended period. The counsel contended that again M/s. Blue Star Alloys Pvt. .....

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ys Pvt. Ltd. has given an irrevocable power of attorney shown as Annexure-R/5. We have seen the annexure and it is an irrevocable power of attorney given to Mr. Mohammed Saleem Shaikh. It is said to have been issued by M/s. Blue Star Alloys Pvt. Ltd. As such, Mr. Mohammed Saleem Shaikh has to act on behalf of M/s. Blue Star Alloys Pvt. Ltd. The learned counsel has relied on Annexure-R/6 from which it is evident that the petitioner company represented by the authorised signatory had informed the .....

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ondent company and M/s. Blue Star Alloys Pvt. Ltd. It goes without saying that there is no direct contract of service between the petitioner and the respondent company. But, the petitioner may be an agent of M/s. Blue Star Alloys Pvt. Ltd. and also a power of attorney holder for M/s. Blue star Alloys Pvt. Ltd. The letters are dated 03.01.2014. So, whatever amount is remitted by the petitioner herein to the account of the respondent company, it is towards the sale order between M/s. Blue Star All .....

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had approached the respondent company with the representative of M/s. Blue Star Alloys Pvt. Ltd. The contention of the respondent company is that the petitioner was never an operational creditor and that there was no operational debt due by the respondent company. Section 5(20) of I & B Code deals with operational creditor. The question is whether the petitioner falls within the meaning of operational creditor. Section 5(21) defines operatipnal debt which reads thus: 21. Operational debt me .....

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rational creditor herein was not directly engaged by the respondent company. M/s. Blue Star Alloys Pvt. Ltd. had entered into contract with the respondent company. At best, the petitioner has acted as an agent of M/s. Blue Star Alloys Pvt. Ltd. Therefore, there is no operational debt payable by the respondent company to the petitioner. May be, the petitioner has also remitted the amount to the account of the respondent company. But, whatever is done by the petitioner, it is with reference to M/s .....

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roceedings relating to- (b) The quality of goods or service; (c) the breach of a representation or warranty. The contention of the counsel for the respondent company is that the deadline for completion of the agreement was 22.05.2014. This was not adhered to by M/s. Blue Star Alloys Pvt. Ltd. Thus, there was non- compliance of the terms and conditions of the agreement and that a notice was issued to M/s. Blue Star Alloys Pvt. Ltd. on 28.08.2014 indicating forfeiture of the security deposit. It i .....

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letter, the respondent company has again extended the time till 15.09.2014 as a final chance. So, the correspondence was only between M/s. Blue Star Alloys Pvt. Ltd. and the respondent company. The respondent company has also issued reply notice to the winding up notice shown as Annexure-R/10. This is issued to the petitioner. It is made clear in this reply notice that the respondent company had never entered into any contract with the petitioner. So, right from the beginning, the respondent co .....

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as if the respondent company was liable to pay a sum of ₹ 38,36,155/- to the petitioner and the interest is Rs,.272,032/- totalling ₹ 65,98,187/-. The petitioner has also relied on Annexure-2C to show that various amounts have been credited to the account of M/s. Wipro Enterprises Ltd. The amounts were sent through RTGS. As already stated earlier, these amounts were remitted to the respondent company s account by the petitioner. Simply because the amounts were remitted by the petiti .....

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