TMI Blog2020 (9) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... xisting dispute over the issue raised in the instant Company Petition, there is no prima facie case made out, and it is filed with an intention to recover the alleged outstanding amount rather to initiate CIRP on justified reasons. Petition dismissed. - C. P. (IB) No. 27/BB/2020 - - - Dated:- 19-6-2020 - Rajeswara Rao Vittanala , Member ( J ) And Ashutosh Chandra , Member ( T ) For the Appellant : Ashwin R. Anneppanavar For the Respondent : Anupama Hebbar ORDER Rajeswara Rao Vittanala , Member ( J ) 1. C.P.(IB) No. 27/BB/2020 is filed by M/s. BASF India Limited ('Petitioner/ Operational Creditor') U/s. 9 of the IBC, 2016, R/w Rule 6 of I B (AAA) Rules, 2016, by inter-alia seeking to initiate Corporate Insolvency Resolution Process (CIRP) in respect of M/s. Prakash Seating Private Limited ('Respondent/Corporate Debtor'), on the ground, that it has committed default for an amount of ₹ 20,33,226/- (Rupees Twenty Lakhs Thirty Three Thousand Two Hundred and Twenty Six only) which consists of principal amount and interest 18% p.a. 2. Brief facts of the case, as mentioned in the Company Petition, which are relevant to the issue in q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tices dated 20.03.2019 and 17.08.2019 to Operational Creditor making false and frivolous statements, but till date the Corporate Debtor has not replied to the demand notice dated 25.09.2019 in Form 4 issued by the Operational Creditor there by again admitting the claim of the Operational Creditor. The Corporate Debtor, at this stage, had consumed the entire materials sold to them for their manufacturing purposes without any demur or protest. The issuance of said two legal notices is only as afterthought by the Corporate Debtor and an attempt to evade payments. (4) Since the Corporate Debtor failed to pay the outstanding amount nor raised any dispute, the present Petition is filed to initiate CIRP against the Corporate Debtor. 3. The Company Petition is opposed by the Respondent/Corporate Debtor, by way of filing Statement of Objections dated 18.02.2020, by inter alia contending as follows: (1) It is denied that the Corporate Debtor owes any sum whatsoever to the Operational Creditor. The instant Petition is filed on false, baseless grounds and contrary to law and the Corporate Debtor does not provide any evidence that discloses the default of a legally enforceable debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Corporate Debtor. Due to defective supply of goods, the Corporate Debtor additionally also had to incur costs towards mould modification charges. (5) Subsequently, the Corporate Debtor vide Purchase Order dated 12th March, 2018, placed an order for the MT Grade system, and the first batch of 11 tons of the MT Grade system was supplied by the Operational Creditor in March, 2018. On proceeding of these chemicals, the Corporate Debtor noticed that there were certain destiny and hardness quality issues during the production itself. The same was brought to the Operational Creditor's notice by the Corporate Debtor engineers, however there was no concrete resolution to this problem from the Operational Creditor's end. Thereafter, though the Operational Creditor regularly supplied the MDI Grade (earlier) and the MT Grade in barrels with a capacity of 200 liters, to the Corporate Debtor shock, the Operational Creditor suddenly in the month of April, 2018 supplied the MT Grade system in intermittent Bulk Containers having a capacity of 1000 liters. (6) Thereafter, in May 2018, the Corporate Debtor was shocked to receive a consignment of the MT Grade System bearing lab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Loss in terms of costs incurred in cleaning, calibration of the heating equipment and moulds, and resultant productions loss due to system change over INR 4,84,537 Losses in costs incurred in mould modification, labour on account of forced supply of IBC containers and manpower loss INR 84,960 Loss incurred on account of chemical loss during changeover from MT System to MDI System and back INR 1,02,282 Loss incurred on account of supply of expired and defective chemicals INR 69,30,553 Loss incurred on account of arbitrary increase in price of chemicals systems despite assurances INR 15,00,000 Loss incurred on account of replacement costs of low-grade product as a result of defective chemical systems. INR 14,41,075 Total Losses Claimed INR 1,05,43,407 (9) Thereafter, the Operational Creditor issued a belated reply notice dated 9th October, 2019 through its lawyers. In its reply the Ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rious averments made in the Company Petition, as briefly stated supra, has further submitted that when the Respondent failed to pay the outstanding amount, have issued Demand Notice dated 25.09.2019, under the provisions of the Code, to the Respondent, which was duly served on the Respondent. Subsequent to receipt of the said Demand Notice by the Corporate Debtor, the Operational Creditor has not received any notice of dispute denying the claim. Ms. Preethi Das, Senior Manager Legal, of the Petitioner Company has also filed Affidavit dated 14.11.2019. Since the instant Petition is filed in accordance with provisions of the Code, and the debt and default in question are not in dispute, he urged the Adjudicating Authority to initiate Corporate Insolvency and Resolution Process (CIRP) in respect of the Corporate Debtor, as prayed for. 6. Ms. Anupama Hebbar, learned Counsel for the Respondent, on the other hand, has strongly opposed the maintainability of the Company Petition, by inter alia submitting that there is a pre-existing dispute about the issue raised in the Company Petition and there is a Mediation Application, as contemplated under Section 12A of the Commercial Courts, Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich, our client has peremptorily instructed us to proceed with the recovery proceedings under the applicable laws in respect of the above transaction. Without filing any recovery proceedings, the Petitioner got issued another notice dated 25.09.2019, in Form-4, under Rule 5 of the I B (AAA) Rules, 2016, by claiming the same amount of ₹ 17,85,149/-. Therefore, it is to be concluded that there is a pre-existing dispute between the Parties in respect of the claim made in the instant Company Petition and the Petitioner failed to disclose material facts of the case with an intention to mislead the Adjudicating Authority. 9. As stated supra, the Respondent has already filed Mediation Application as early as on 31.12.2019, before the Hon'ble District Legal Services Authority, Bengaluru Rural District, by claiming the remaining amount of ₹ 87,64,567/- after including the claim amount of (₹ 17,78,840/-). In which the Respondent also appeared and did not agree for possibility for the settlement and the case is stand posted to further hearing on 18.06.2020. Therefore, the Petitioner cannot insist to initiate CIRP in respect of the Corporate Debtor, when admittedl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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