TMI Blog2018 (7) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... is registration certificate, declaration and consent are at Annexure-1 I (colly) of the petition. We find that that in Form 2 submitted by Shri Giridhari Lal Sharma, he has certified that there are no disciplinary proceedings pending against him with the Board or Indian Institute of Insolvency Professionals of ICAI) of ICAI. The condition of Section 9 (5) (e) of the Code is satisfied. In result thereof the conditions provided for by Section 9 (5) (i) of the Code are satisfied in the present case and the petition is admitted. - CP(IB) No. 75/Chd/Hry/2018 - - - Dated:- 31-5-2018 - Mr. R. P. Nagrath And Mr. Pradeep R. Sethi, JJ. For The Petitioner : Mr. Anand Chandra Swain, Advocate For The Respondent : Mr. Sachit Sahijpal, Advocate JUDGEMENT The application has been filed under Section 9 of the lnsolvency and Bankruptcy Code, 2016 (hereinafter referred to as the Code) read with Rule 6 of the lnsolvency Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as the Rules) by MIS Gupta Power Infrastructure Ltd. (hereinafter referred to as the petitioner). The affidavit verifying the application is signed by Shri Sujit Patt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... starts from 20.03.201 2, 13.04.201 2, 20.04.201 2, 27.04.2012 and 18.05.2012, the respondent made only part payment of 71 5,12,7071- on various dates and despite repeated requestslfollow up by the petitioner through its personnel, the respondent did not make payment of the balance dues. A copy of the ledger maintained by the petitioner is stated to be annexed as Annexure-5 of the petition. 4. It is stated that since the payment was not made by the respondent, the petitioner on 01.02.2014 filed a case bearing MSEFC Case No.07 of 201 4 before the Medium and Small Enterprises Facilitation Council (hereinafter called as MSEFC) for arbitration of the dispute as per provisions of the Micro, Small and Medium Enterprises Development Act, 2016 (hereinafter referred to as MSMEDA). It is stated that MSEFC passed final award dated 20.06.2015 directing the respondent to pay the principal amount of ?37,68,496.35 and interest of ?32,03,787.61 calculated up to 31 .I 0.2014 as per Section 15 and 16 of the MSMEDA and further directed that the respondent shall pay further compound interest with monthly rests at the rate of three times of the bank rate as notified by Reserve Bank of India from time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bank of Patiala vide Trust and Retention Account Agreement dated 25.08.2010 and therefore, MIS Sravanthi Energy Pvt. Ltd. placed order for erection of Plant on the respondent for setting up the Power Plant on EPC basis. 8. It is then stated that when the erection of the Plant was in full swing, the Central Electricity Authority, Government of lndia vide its communication dated 19.03.2012 conveyed its inability to commit on the gas supply till the year 201 5-1 6 and due to the change in the projected gas supply by the Government of lndia to the said Plant, the financial institution stopped further funding and as a result of this development, the respondent could not pay to suppliers as per the commitments of the purchase orders. It is stated that in the year 2017 the Government of lndia assured regular supply of gas and MIS Sravanthi Energy Pvt. Ltd. has completed one project of 225 megawatts and has commenced power production with effect from August, 2017 and the total production of the unit is being supplied to Uttarakhand Power Corporation under a power purchase agreement. It is stated that the Joint Lenders Forum has discussed in its meeting dated 23.04.2018 to clear the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... standing dues of the petitioner. 12. In rejoinder, the learned counsel for the petitioner referred to the copy of the award dated 20.06.2015 passed by MSEFC (Annexure-6 of the petition) and stated that this order showed that the respondent participated in the proceedings before MSEFC and also filed the counter before the MSEFC. It was stated that the award dated 20.06.2015 has not being challenged by the petitioner and therefore, becomes final. 13. We have heard the learned counsel for the petitioner and the respondent and have also perused the records of the case. 14. The present petition is filed under Section 9 of the Code and is an application for initiation of CIRP by operational creditor. Section 9 of the Code reads as under:- 9. (1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub-section (2) of section 8, the operational creditor may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process. (2) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the defect in his application within seven days of the date of receipt of such notice from the adjudicating Authority. (6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of this section. 15. The provisions of Section 9(1) of the Code are satisfied since the application by the petitioner for initiating the ClRP is filed after the expiry of 10 days from the date of delivery of Demand Notice in Form 3 and 4 sent under section 8 (1) of the Code read with rule 5 of the Rules. (Date of delivery of Demand Notice is 31 .01.2018 and application is filed on 06.03.2018). The provisions of Section 9(2) of the Code are complied since the application under Section 9(1) is filed in the prescribed Form 5. As discussed above, the provisions of Section 9(3) of the Code are satisfied since copy of the Demand Notice is enclosed alongwith the application; affidavit of no notice given by the corporate debtor relating to a dispute of the unpaid operational debt is filed; copy of certificate from the financial institutions maintaining accounts of the operational creditor confirming that there is no payment of an unpaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the MSMEDA and the Code operate in different spheres and forum hunting cannot be said to take place. 20. The third objection is that the amount arising due to the award of the MSEFC does not fall within the ambit of the definition of operational debt as prescribed in the statute. The present petition is filed in respect of debt arising from supply of LT Power and Control Cable and MV Power Cables for a total amount of ?52,81,203.35 for which part payment of 515,12,707/- was made by the respondent on various dates and therefore, there was balance principal amount of f37,68,496.35 due as on 09.09.2013 (refer Annexure 5 of the petition). Operational debt as defined in Section 5(21) of the Code inter alia means a claim in respect of the provision of goods or services. The present case is of a claim in respect of sale of goods by the petitioner to the corporate debtor. Therefore, it is an operational debt. 21. The fourth contention is that the platform provided by the court cannot be exploited for execution of a decreelorder. We have already observed above that the ClRP is a separate process. Therefore, the contention of the respondent cannot be accepted. 22. The fifth con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arbitration agreement referred to in sub-section (I) of section 7 Of that Act. 4. Notwithstanding anything contained in any Other law for the time being in force, the Micro and SmaN Enterprises Facilitation Council or the centre providing alternate dispute resolution services shall have jurisdiction to act as an Arbitrator or Conciliator under this section in a dispute between the supplier located within its jurisdiction and a buyer located anywhere in India. 5. Every reference made under this section shall be decided within a period of ninety days from the date of making such a reference . 24. So according to the aforesaid provision the Council has acted as an Arbitrator and made the award. Such an award is executable as a decree of the Civil Court. 25. Section 19 of the aforesaid Act has reference to application for setting aside of the decree, award or other orders. Admittedly no such application has been filed. Therefore, the order passed by the Council can be said to have attained finality. Section 24 of the said Act further says that the provisions of Sections 15 to 23 of the Act shall have effect notwithstanding anything inconsistent therewith contained i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. 30. It is further directed that the supply of essential goods or services to the corporate-debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period. The provisions of subsection (1) of Section 14 of the Code shall however not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. 31. The order of moratorium shall have effect from the date of this order till the completion of the corporate insolvency resolution process or until this Bench approves the resolution plan under sub-section(1) of Section 31 or passes an order for liquidation of corporate debtor under Section 33 as the case may be. 32. The matter be posted on 04.06.201 8 for passing formal order to appoint Interim Resolution Professional with further ..... X X X X Extracts X X X X X X X X Extracts X X X X
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