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TMI Blog2019 (4) TMI 1128X X X X Extracts X X X X X X X X Extracts X X X X ..... s prescribed under the Code and Rules thereon. Averments in the Petition: 2.1 The Operational Creditor is a registered firm and came into existence on 01.01.1943. The Operational Creditor is dealing in mechanical and electrical components viz VT Pump Sets and allied Equipment. 2.2 The Corporate Debtor was incorporated on 07.03.1983. At the request of Corporate Debtor, the Operational Creditor and Corporate Debtor entered into a contract for providing various goods/equipment and services vide various purchase orders and work orders for construction of Majalgaon Lift Scheme from Loni Sawangi Barrage (Sadola Village) Taj Majalgaon District Beed under GMIDC and the total cost of the purchase order / contract No. Prasad-Shreehari JV/MLS/2013-14/01, dated 06.07.2013 was Rs. 17,55,25,790/-. Further vide Purchase order No. Prasad-Shreehari JV/MLS/2013-14/01, dated 06.07.2013, work order was placed on the Operational Creditor for storage, erection, testing and commissioning of mechanical components viz VT pump sets and allied equipment for a total consideration of Rs. 62,74,210/-. 2.3 It is averred the purchase order was amended on 26.02.2014 vide amended purchase order No. Prasad/MLS/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lvent and capable of clearing the debts arose in the regular course of business and further submits that it is the Operational creditor that is on the verge of insolvency. 3.3 It is the case of Corporate Debtor that Operational Creditor in order to cover up its losses, without performing its part of the contract, is maliciously trying to recover the amount from the Corporate Debtor which are not due. 3.4 It is averred that Government of Maharashtra requires partnership of various firms/ companies having different specific type of expertise for carrying out various irrigation projects and expects special purpose Joint venture Firm / Company to participate in the tender process. As such Corporate Debtor entered into a Joint venture Agreement with M/s Shreehari Associates Private Limited and named it as Prasad-Shreehari (JV) which is a partnership firm. The Government of Maharashtra awarded various contracts for construction of irrigation projects to the said joint venture firm. 3.5 It is the case of Corporate Debtor that initially purchase order and work order were placed in the name of JV Firm for supply of goods / services by Operational Creditor. Subsequently, due to some inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 26.02.2014. It is averred that Operational Creditor is trying to unnecessarily pressurize the Corporate Debtor to release the balance 25% payment without performing its part of the contract and the claim made by the Operational Creditor does not fall within the meaning of Section 3 (6) of the IBC. 3.9 It is the case of Corporate Debtor that there is no default on the part of the Corporate Debtor because suspension of work is entirely beyond the control of Corporate Debtor and the date of default mentioned in the Petition as 10.12.2016 is also incorrect and denied. 3.10 It is averred that amendment to the Purchase order/Contract is an internal matter and Operational Creditor was not put to any monetary loss by virtue of such amendments in the Purchase order. 3.11 It is stated by the Corporate Debtor that Operational Creditor has deducted 12% and 13% of the invoice amounts and that they are payable against erection and after trial run period. There is no default on the part of the Corporate Debtor. 3.12 It is the case of Corporate Debtor that 25% amount of Rs. 2,23,36,926/- is the retention money against erection and commissioning because Operational Creditor is well aware t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;ble NCLT, New Delhi order dated 13.06.2018 wherein it held that disregarding two-three bills does not mitigate the debt to the extent that prayer for invoking the Resolution Process cannot be entertained as the threshold for permitting Corporate Insolvency is Rs. 1 Lakh and for a debt above this amount, the Operational Creditor is entitled to seek initiation of CIRP of the Corporate Debtor. The submission for rejection of the Petition on this ground is therefore not sustainable. It is not for the Adjudicating Authority to look into how much claim can be accepted. Suffice it to state that as long as it is over Rupees one Lakh, the Operational Creditor is entitled to invoke the CIRP. 4.4 It is averred that Corporate Debtor admitted that it has paid 75% of the invoice value and as per the payment terms it is clear that operational Creditor is entitled to recover balance amount which has also become due and payable. 4.5 The Operational Creditor deny the allegation that the project work was going at a normal pace. In fact the project was delayed by the Corporate Debtor on account of its inability to complete the project. 4.6 The Operational Creditor deny the averments made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erational Creditor and the Counsel for Corporate Debtor. Both the sides have filed their written submissions. The points urged in the written submissions will be dealt in the course of the order. The learned Counsel for Operational Creditor would contend that Corporate Debtor raised for the first time as if there existed a dispute which is nothing but created and feeble dispute. The Counsel contended alleged dispute is not a dispute at all and it never existed and accordingly it deserves no consideration. Counsel contended, Corporate Debtor failed to give reply raising any dispute within 10 days as required under law from the date of service of Demand Notice. Counsel contended there was no such reply raising dispute except an email dated 31.05.2018 and also letter dated 31.05.2018 which were received from Prasad-Shreehari (JV) which is not a Corporate Debtor wherein it was alleged that claim by the Petitioner / Operational Creditor is premature on account of non-erecting and commissioning of the unit by the Petitioner. Counsel contended reply given by the Prasad-Shreehari (JV) cannot be looked into. 6. Counsel contended, Corporate Debtor sent reply on 18.06.2018 raising dispute qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations for Majalgaon Lift Irrigation System on Turnkey Basis. The scope of the work was inclusive of the basic and detailed engineering of product, design, procurement, manufacturing etc and installation of machinery at the project site and commissioning and trial run of equipment for three months. 10. Counsel relied upon the terms of payment to the Operational Creditor in respect of Purchase orders. (I) 10% advance is to be paid along with the purchase order (includes approval of major drawing and documents). (II) 65% against the supply of equipment at the site after confirmation of 3rd party inspection against LC with 60 days usance period. (III) 12% against erection of equipment within 30 days. (IV) 13% against trial, commissioning and completion of 3 months trial operation of equipment within 30 days. And if commissioning gets delayed from Operational Creditor's side beyond 6 months, 8% shall be released and 5% shall be retained till completion of commissioning, 11. The contention of the learned Counsel that Petitioner has supplied goods as per purchase order at the site for which Corporate Debtor already paid 75% of the value. Counsel contended it is also the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perational Creditor that it is not in dispute Corporate Debtor had not paid 25% of the retention money. However, Corporate Debtor is contending that the Operational Creditor has not completed the rest of the contract as per Purchase order and therefore, there was no liability to pay the same to the Operational Creditor. 15. The contention of the learned Counsel for Operational Creditor that it is not responsible for any delay. Counsel contended, Operational Creditor is ready to erect, commission and trial run the equipment as per the terms of payment but site is not handedover to the Operational Creditor by Corporate Debtor. If delay is occurred on account of Corporate Debtor then Operational Creditor is entitled at least 20% of the retention money in terms of payment of the purchase order. The question whether delay occurred on account of Corporate Debtor. Admittedly, Corporate Debtor was given contract for completing the project for Majalgaon Lift Irrigation System on Turnkey Basis and equipment was transported to the project site. At that stage authorities of Government of Maharashtra issued order suspending the work. It is an unforeseen event. Parties to the Purchase order did ..... X X X X Extracts X X X X X X X X Extracts X X X X
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