TMI Blog2018 (4) TMI 1440X X X X Extracts X X X X X X X X Extracts X X X X ..... kruptcy Code, 2016 read with Rule 6(1) of the Insolvency and Bankruptcy (Application to Adjudicating Rules), 2016 for the initiation of the Corporate Insolvency Resolution Process against M/s. The Orissa Minerals Development Company Ltd., the Corporate Debtor. Operational Creditor has filed this application claiming that the Corporate Debtor has committed default in making payment of ₹ 13,06,89,315/- (Rupees thirteen crores six lakhs eighty-nine thousand three hundred and fifteen) only. The Operational v/debt fell due on 20.05.2015 when final arbitral award was passed in favour of the Operational Creditor. 2. The Operational Creditor, M/s. Orissa Stevedores Limited, having Identification No. U35112OR1978PLC000771 is a company incorporated under the provisions of Companies Act, 1956. The registered office of the Company is situated at OSL Towers, Link Road, Cuttack in Odisha. 3. The Corporate Debtor, M/s. The Orissa Minerals Development Company Limited, having Identification No. L51430WB1918GOI003026 is a company incorporated under the Companies Act, 1956. The registered office of the Company is situated at Sourav Abasan, 2nd floor, AG-104, Sector-ll, Salt Lake, Kolkata, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... burse to the OSL the sum of ₹ 1,94,17,829/- for work done, together with interest @10% p.a. to be calculated from the date of last letter of demand, i.e. 01.03.2007 till realisation. (b) On account of wrongful deduction of OSL s bill for handling and stevedoring in respect to M.V.Naviue Arch, OSL is entitled to and the OMDC shall reimburse to the OSL the sum of ₹ 10,35,000/- together with interest @10% p.a. to be calculated from the date of last letter of demand, i.e. 04.09.2007 till realisation. (c) The OMDC shall reimburse to the OSL the sum of ₹ 2,02,412/- admittedly being withheld by OMDC together with interest @10% p.a. to be calculated from the date of last letter of demand, i.e. 08.02.2007 till realisation. (d) The OMDC shall return to OSL the sum of ₹ 50,00,000/- being the security deposit withheld by OMDC together with interest @10% p.a. to be calculated from the date of last demand, i.e. 20.11.2007 till realisation. (e) The OMDC shall reimburse to the OSL the sum of ₹ 29,02,938/- being the service charge for the balance quantity of iron ore fines handled at Paradip Port Area till 31.03.2007 being withheld by the OMDC together with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Agreement and instituted Arbitration Petition being A.P. No.120 of 2008 before the Hon ble High Court at Calcutta and the Hon ble High Court dated 21.08.2008 was pleased to refer the dispute to Arbitration by appointing Mr. Justice Ronojit K. Mitra, Former Judge, High Court at Calcutta as the Ld. Sole Arbitrator to adjudicate the dispute between the Operational Creditor and Corporate Debtor. 6. The Operational Creditor submitted that the operational debt fell due when the Arbitral Award dated 20.05.2015 was challenged by the Corporate Debtor by preferring an appeal under section 34 of the Arbitration Conciliation Act, 1996 before the Ld. District Judge, Purba Medinipur, which was also rejected by the Ld. District Judge vide order dated 17.08.2016. 7. Further, the operational debt also fell due when the Demand Notice dated 12.09.2017 under section 8 of the I.B. Code, 2016 read with rule 5 of the l B (Application to Adjudicating Authority) Rules, 2016 was delivered at the registered Office of the Corporate Debtor as also to all the Managerial Persons of the Corporate Debtor demanding payment in respect of the unpaid operational debt. 8. The Operational Creditor has fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. The operational creditor has further stated in the affidavit that corporate debtor has failed to bring to the notice of the applicant an existence of a dispute or the pendency of a suit or arbitration proceeding filed before the service of the demand notice. 13. The applicant/operational creditor has issued demand notice of unpaid operational debt/copy of Invoices on 13th September, 2017 to Corporate Debtor in prescribed manner as specified in Rule 5(2) of Insolvency and Bankruptcy(Application to Adjudicating Authorities) Rules, 2016, under Section 8(1) of the Insolvency and Bankruptcy Code, 2016 vide Annexure-T (Page 35).. .Further, the petitioner has enclosed the proof of service of Demand Notice vide Annexure-T (Page 36 37), which indicates that the demand notice was duly served upon Corporate Debtor as well as upon various Key Managerial Persons on 25.09.2017. 14. As per direction of the Tribunal dated 20th December, 2017, a further notice was also served upon the Corporate Debtor. Vide Supplementary Affidavit dated 28th December, 2017, the Operational Creditor has also submitted that an application under section 34 of the Arbitration and Conciliation Act, 1996 by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on 06.04.2005 between the parties initially for one year. 20. The Corporate Debtor denied the fact stated by the Operational Creditor that due to over-stacking of iron ore in the storage plot at Haldia and subsequent water logging and contamination with mud and shrinkage of the plot, there was shortfall of 10557.55 M/T of materials, since the plot at Haldia belongs to the respondent was duly examined and was certified that it has total capacity of stacking 60 to 70000 M/T of iron ore and such certification was made prior to the issuance of the work order. Although the Corporate Debtor extended the time to further one year and the aforesaid problem prevailed and thus the Corporate Debtor informed the Operational Creditor to shift the materials from the warehouse and was also ready to extend for further four months but in the meantime the petitioner raised bills and the management found the bills unreasonable and made deductions in the bills which was disputed by the Operational Creditor in the Arbitration. 21. The Corporate Debtor filed appeal against the arbitral award given by the Sole Arbitrator in favour of the Operational Creditor before the Ld. District Judge, Purba Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsels of the parties and perused the records. 25. The operational creditor has stated that an amount of ₹ 13,06,89,315/- is due from the corporate debtor and despite demand notice not repayed the amount and hence filed this petition. The statement of bank accounts has been duly annexed marked and annexed as Annexure-IN to prove that debt amount has not been paid by the corporate debtor. The bank certificate issued from the HDFC Bank maintaining the accounts of the operational creditor confirmed that there was no payment of an unpaid operational debt by the corporate debtor. 26. The respondent in this case has no case that it paid the amount as demanded by the petitioner. On the other hand the documents filed by the Operational Creditor, it is clear that the Corporate Debtor has failed to make the payment of operational dues of ₹ 13,06,89,315/-, in spite of receiving the demand notice under 8(1) of the Insolvency Bankruptcy Code, 2016. 27. The Operational Creditor has also filed the bank certificate in compliance of provision of section 9(3)(c) of the I.B.Code, which shows that the Operational Creditor has not received the payment from the Corporate De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount due as per the services rendered by the operational creditor to the corporate debtor no doubt is an operational debt. Therefore the above said objection of the corporate debtor is devoid of any merit. 30. The petitioner in the case in hand succeeds in proving the ingredients of section 9 (5) of the Code, and further proves failure on the side of the Corporate Debtor in clearing the debt found due to the petitioner even after receiving the demand notice under section 8(1) of the Code. It is also clear that the Corporate Debtor has not raised any notice of dispute within ten days of receiving the demand notice. The contention on the side of the respondent that it did not offered any reply to the demand notice of the petitioner since the respondent preferred an appeal under section 37 of the Arbitration and Conciliation Act, 1996 is devoid of any merit. 31. It has come out in evidence that the said appeal was preferred after receipt of the demand notice by the respondent. The demand notice evidently served upon the corporate debtor on 25.09.2017. The above said appeal was preferred by the corporate debtor before the Hon ble High Court on 14.11.2017. According to the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 9 of the Insolvency Bankruptcy Code, 2016 deserves to be admitted. Here in this case the petitioner did not opt to propose a resolution professional and hence compliance of Section 9 (5) (i) (e) of the l B code doesn t arise. On the other hand, petitioner succeeds in proving the compliance of Sub Sections (a) to (d) of 5 (i) of Section 9 of the I B Code. For the aforesaid reasons this petition is admitted. ORDER The petition filed by the Financial Creditor under Section 9 of the Insolvency Bankruptcy Code, 2016 is hereby admitted for initiating the Corporate Resolution Process. Moratorium order is passed for a public announcement as stated in Sec.13 of the IBC, 2016. The moratorium is declared for the purposes referred to in Section 14 of the Insolvency Bankruptcy Code, 2016. The IRP shall cause a public announcement of the initiation of Corporate Insolvency Resolution Process and call for the submission of claims under Sec.15. The public announcement referred to in clause (b) of sub-section (1) of Insolvency Bankruptcy Code, 2016 shall be made immediately. Moratorium under Sec.14 of the Insolvency Bankruptcy Code, 2016 prohibits the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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