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TMI Blog2018 (11) TMI 1537X X X X Extracts X X X X X X X X Extracts X X X X ..... erational Creditor is into the business of construction activity. The Respondent / Corporate Debtor, which was incorporated in 1990, is in the business of EPC & turnkey projects, power, mining, irrigation, building express ways, national highways etc. The Operational Creditor was engaged by the Corporate Debtor for construction of Anik Panjarpol Link road - slope protection works for Tunnel for MMRDA as per Letter of Indent (LOI) Ref No. MPL/APLR/MUM/13/116 dated 17.05.2013 under an agreement that 75% of the payment shall be released within 15 working days from the date of submission of RA Bill and balance of 25% will be released within 30 working days from the date of submission of RA Bill. (2) The Operational creditor commenced the work in April 2013 and till May 2014, it submitted bills for Rs. 4,02,34,399/- to the Corporate Debtor. But only Rs. 96,00,000/- was paid to the Operational Creditor. It is also averred that LOI was issued on 17.05.2013, which was amended twice on 07.11.2013 and 17.05.2015. It is also averred that Operational Creditors generated Eleven RA Bills against the LOI and its Amendments and in turn Corporate Debtor issued 12 interim payment vouchers. (3) I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of default amounting to Rs. 1,72,13,111/-. Therefore, the total amount due to operational Creditor is Rs. 4,16,97,565/-. (10) It is further submitted that Corporate Debtor has clearly deducted TDS on Rs. 3,96,81,402/-. However payments made is only Rs. 1,81,42,213/-. The last payment made by Corporate Debtor to Operational Creditor is Rs. 30,00,000/-. Further Operational Creditor avers that there was no objection as to the quality of work at any point of time. (11) It is averred that Corporate Debtor was not able to honour the outstanding payments and there exists no dispute against the outstanding amount. (12) Further Operational creditor suggested the name of Mr. Rakesh Rathi having IP registration No. IBBI/IPA-001/IP-P00696/2017-18/11211 to act as Interim Resolution Professional. His consent is obtained in Form-2. 3. Counter and Additional Counter are filed by Corporate Debtor. Contentions in brief are as under:- (1) It is contented that the amount claimed by the Petitioner has never crystallized into a debt and Petitioner is seeking to invoke the provisions of IBC as a tool to harass and threaten the Respondent. It is contended the Petitioner is interpreting the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt engaged other contractors also for the same work allegedly done by the Petitioner and also made payment. Thus, reconciliation was necessary for ascertaining any dues in r/o of the claims by the Petitioner. It is contended by the Respondent that the claim of the Petitioner is barred by limitation. (8) It is also stated that on Petitioner's request the Respondent had deducted the TDS for the entire bill value raised by the Petitioner even for the incomplete work. The entire TDS amount for the bills were paid on 30.04.2014 while the last of the RA bill was raised only on 17.10.2014. (9) It is further stated that the Respondent is doing several Government Projects and as such their bills would be cleared only upon the projects being completed on time and only upon bills being cleared by Government Agencies, the Respondent would clear their sub-contractors Bills. (10) It is the case of Respondent that the claim made in the petition and demand notice is also unsubstantiated. The claim towards interest is also a baseless claim (11) It is contended that amounts if any due to the Petitioner by the Respondent will be paid only after due reconciliation of accounts because of the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2009] 1 SCC 475. (2) Judgement in Dresser Rand SA v. Bindal Agro Chem Ltd. AIR 2006 (SC) 871. (3) Judgement in the matter of Nikhil Adhesives Ltd. v. Kandla Port Trust 2011 (2) GLH 283. (4) Judgement in the matter of Pradeshiya Industrial & Investment Corpn. of UP v. North India Petrochemicals Ltd. [1994] 3 SCC 348. (5) Judgement in Company Appeal (AT) (Insol) No. 67 of 2018 - in the matter of KLA Constructions Technologies Pvt. Ltd. v. CKG Realty Pvt. Ltd. (6) Judgement in the matter of Rajasthan Co-Operative Dairy Federation Ltd. v. Maha Laxmi Mingrate Marketing Service (P.) Ltd. AIR 1997 SC 66. (7) Judgement in the matter of Mahesvari Metals and Metal Refinery v. Madras State Small Industries Corpn. AIR 1974 Mad 39. 7. The Petition is filed under Section 9 of the IBC by the Operational Creditor alleging the Corporate Debtor committed default in paying the operational debt. The Petitioner has to establish that Corporate Debtor committed default in paying the operational Debt. The Adjudicating Authority is to admit the Petition, if the Petition is complete in terms of Section 9 (2) of the Code and that there is no repayment of operational debt. The invoices along wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raising any dispute. He contended no credence can be given to the alleged dispute. 12. The amount claimed to be in default as per Form-5 in the Default Column was Rs. 2,44,84,454/-. The retention money of Rs. 12,74,043/- if added, the default amount comes to Rs. 2,32,10,411/-. The interest as per MSME Act is at Rs. 1,72,13,111 /- It is the case of Operational Creditor it has raised RA Bills for a total sum of Rs. 4,26,26,667/-. An amount of Rs. 1,81,42,213/- was given credit. 13. The case of Operational Creditor that it was engaged by Corporate Debtor for construction of Anik Panjarpol Link Road-Slope protection Works for Tunnel approaches as per LOI dated 17.05.2013. It is shown in page Nos.83-89. The Corporate Debtor has issued this LOI. The contract work is for Rs. 68,82,500/-. The counsel for Corporate Debtor mainly contended LOI by itself is not a concluded contract. It contemplates the LOI is only an agreement to a further contract and further the Operational Creditor to furnish a Bank Guarantee and if Bank Guarantee is not furnished, LOI stands cancelled. The Bank Guarantee to be furnished within 15 days. Counsel for Corporate Debtor relied on Clause (D) of LOI. The Opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being issued. Therefore, it is not open to the Corporate Debtor to contend that there was no concluded contract and that Operational Creditor cannot maintain the petition. 17. The case of Operational Creditor it has raised 11 RA Bills and in that connection Corporate Debtor issued 12 interim payment certificates for all the RA Bills generated. It is also the case of Operational Creditor that it had contacted MMRDA for payment of outstanding amount as the contract was entrusted to Corporate Debtor by MMRDA. It is also the case of Operational Creditor that Corporate Debtor issued a cheque for Rs. 1.50 crores on 23.08.2014 which is shown at page No. 52 (A) but the cheque was dishonoured on presentation. It is also the case of Operational Creditor that amount of Rs. 30 Lakhs was remitted to the account of Operational Creditor by Corporate Debtor through RTGS. There was correspondence between MMRDA, Corporate Debtor and Operational Creditor. The letters are shown as Exhibit -G at page Nos. 53-61(c). The important letter addressed to MMRDA by Corporate Debtor is dated 21.01.2015. This letter was addressed by Corporate Debtor requesting MMRDA to release Rs. 1 crore to Operational Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Operational Creditor 12 RA Bills were raised in respect of execution of work entrusted to it by Corporate Debtor whereas Corporate Debtor issued 12 Interim Payment certificates. The last RA Bill was dated 17.10.2014. 21. It is the case of Operational Creditor two letters were addressed to MMRDA by Corporate Debtor dated 21.01.2015 and 25.02.2015 requesting MMRDA to release Rs. 2 Crores to the Operational Creditor. Subsequent to the completion of work the liability is admitted by Corporate Debtor. What was the need for Corporate Debtor to address letters to MMRDA to release Rs. 2 Crores to the Operational Creditor, if really Corporate Debtor was not liable to pay to the Operational Creditor in pursuance of execution of work. 22. On the other hand, the case of Operational Creditor that Operational creditor is a registered under MSME Act. PCA for operational creditor has filed memo dated 13.12.2017 along with additional submissions. He has enclosed Gazette notification dated 04.09.2017 and contented that interest is chargeable in the delayed payment for the Micro Small & Medium Enterprise. The PCA contended that Operational Creditor is registered under MSME Act, 2006 and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f its property including any action under Securitization and Reconstruction of Financial Assets and Enforcement of Security interest Act, 2002 (54 of 2002); the recovery of any property by an owner or lessor where such property is occupied by or in possession of the corporate Debtor. (b) 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. (c) That the provisions of sub-section (1) of section 14 shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. (d) That the order of moratorium shall have effect from 5th October, 2018 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, whichever is earlier. (e) That the public announcement of the initiation of Corporate Insolvency Resolution Process shall be made immediately as prescribed under section 13 of Insolvency and Bankruptcy Code, 2016. (f) That this Bench hereby appo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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