TMI Blog2019 (9) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 - CH. MOHD. SHARIEF TARIQ, MEMBER (JUDICIAL) For The Financial Creditor : Mr Satish Parasaran, Senior Counsel for M/s. Subhang P. Nair And K. M. D. Muhilan, Counsel For The Corporate Debtor : Mr . R. Sankaranarayanan, Sr. Counsel for M/s. Anand Sashidharan, Counsel ORDER 1. Under adjudication is CP/922/IB/2018 that has been filed by M/s. Val-Met Engineering Private Limited (hereinafter referred to as 'Financial Creditor') under Section 7 of the Insolvency and Bankruptcy Code, 2016 r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 against M/s. Trusted Aerospace Engineering Private Limited (hereinafter referred to as 'Corporate Debtor'). The prayer made is to admit the Application, to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, declare moratorium and appoint Interim Resolution Professional (IRP). 2. Heard the Learned Sr. Counsels for the Financial Creditor, Corporate Debtor and perused the pleadings including the documents placed on file. 3. The Financial Creditor has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates from 22.08.2013 to 04.09.2014 which is evidenced from the statement of account issued by the Bank of Maharashtra. The Learned Sr. Counsel for the Financial Creditor has referred to the various e-mail requests sent by the Corporate Debtor to the Financial Creditor for transfer of funds towards salary of the employees and statuary expenses to be incurred by it and acknowledgement of the same. 9. The Learned Sr. Counsel for the Financial Creditor has further submitted that in terms of the MoU entered into between the Corporate Debtor and the Financial Creditor, the Corporate Debtor did not proceed to negotiate the terms of definitive agreement as was necessary to implement the provisions of the MoU. Therefore, the Corporate Debtor is liable to return the money provided by the Financial Creditor to the Corporate Debtor, as working capital on various dates. 10. The Learned Sr. Counsel for the Financial Creditor has referred to the typed set of document filed by the Corporate Debtor along with the Reply which contains the pleadings (Motion to Dismiss) filed before the US Court by the Corporate Debtor's US subsidiary wherein it was admitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n expended with a desire to become the owner of the business. It is a capital as the inherent part of a capital is risk, and therefore, it cannot come within the main portion of the definition Section 5(8)(f) of I B Code, 2016. The default is also not pleaded and proved. 13. The 3rd objection that has been raised by the Corporate Debtor is that having issued notice as an Operational Creditor, an Application under Section 7 of I B Code, 2016 is not maintainable. The Corporate Debtor has finally submitted that the debt is barred by limitation and the acknowledgement of debt attempted to be established with WhatsApp messages cannot constitute an acknowledgement and the WhatsApp messages relate to a transaction that happened in USA with the parent company [CD's subsidiary is in USA not parent] of the Corporate Debtor. Even, if it is assumed that the transaction took place between 02.09.2013 and 04.09.2014, the limitation has to be reckoned from 04.09.2013 onwards. The E-Mail correspondence filed along with the Application as Annexure 4 ended with 01.09.2014. On the day when the Application was filed i.e. 22.06.2018, it was clearly barred by limitation. Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of the MoU. The Applicant/Financial Creditor was under the obligation to arrange for Working Capital and took responsibilities of the day-to-day management. The Applicant/Financial Creditor was also made responsible for payments of the statutory dues and other administrative expenses including liabilities as on the 'effective date' given in the MoU. 18. In pursuant to the terms and conditions of the MoU, the Applicant/Financial Creditor had started to make the payments to the Corporate Debtor with effect from 22.08.2013 to 04.09.2014 as reflects from the Certificate issued by the Bank of Maharashtra, which is placed at pages 6 to 8 of the typed set filed with the Application. The total amount now claimed is ₹ 2,13,61,067/- as on 05.09.2013 along with further interest @ 18% per annum. 19. As per the terms and conditions of the MoU entered into between the Applicant/Financial Creditor and the Corporate Debtor, the Applicant/Financial Creditor brought in funds from time to time for corporate debtor's Working Capital, cleared its liabilities and paid other expenses. However, the corporate debtor did not perform its obligation i.e., to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffected on 04.09.2014 and the Application under Section 7 of I B Code, 2016 has been filed on 22.06.2018 which is beyond three years and the claim is time barred. The Learned Sr. Counsel for the Applicant/Financial Creditor while rebutting the arguments of the Learned Sr. Counsel for the Corporate Debtor has referred to the WhatsApp messages which were exchanged between the Applicant/Financial Creditor and Corporate Debtor. He has placed on record the WhatsApp messages dated 07.07.2015, whereby the Corporate Debtor has assured the Applicant/Financial Creditor that the subsidiary of the Corporate Debtor hosted in USA will pay to the Applicant/Financial Creditor by the end of July or the 1st week of August onwards. Another reference has been made by the Learned Senior Counsel for the Applicant/Financial Creditor about the communication that has been exchanged between the parties on 03.09.2015 by which the Applicant/Financial Creditor has again requested the Corporate Debtor to make payments. Besides this, one more such communication was exchanged between the Applicant/Financial Creditor and the Corporate Debtor on 13.01.2016, by which the Corporate Debtor again assured the Applicant/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of the amount claimed. At this stage the Corporate Debtor is not permitted either to claim set off or to make counter claim against the Applicant/Financial Creditor. If the corporate debtor has any genuine claim against the applicant/financial creditor, the same can be taken care of during the CIRP. In this connection reliance is placed on the judgment of the Apex Court given in Swiss Ribbons s are reported in (2019) 4 SCC 17 It is also noted that the Learned Senior Counsel for the Applicant/Financial Creditor controverted the contention of the counsel for the corporate debtor and submitted that the financial creditor has not availed any facility from the Corporate Debtor. 23. Further, the learned Senior Counsel for the Corporate Debtor while arguing the case has contended that the Applicant/Financial Creditor in the beginning has sent the notice under Section 8 of the I B Code, 2016 to the Corporate Debtor as Operational Creditor and thereafter he cannot file the Application under Section 7 of the I B Code, 2016. In reply to the said arguments the Learned Senior Counsel for the Applicant/Financial Creditor has submitted that the notice under Section 8 of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) Any action to foreclose, recover or enforce 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 (54 of 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. 27. The supply of essential goods or services of the Corporate Debtor/Guarantor shall not be terminated or suspended or interrupted during moratorium period. The provisions of Sub-section (1) of Section 14 shall not apply to such transactions, as notified by the Central Government. 28. The IRP shall comply with the provisions of Sections 13(2), 15, 17 18 of the I B Code. The Directors of the Corporate Debtor, its promoters or any person associated with the Management of the Corporate Debtor are/is directed to extend all assistance and cooperation to the IRP as stipulated under Section 19, so that he could discharge his ..... X X X X Extracts X X X X X X X X Extracts X X X X
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