TMI Blog2021 (3) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... cation admitted - moratorium declared. - IA(IB) No. 769/KB/2020 in C.P. (IB) No. 1778/KB/2019 - - - Dated:- 30-9-2020 - M. B. Gosavi, Member (J) And Harish Chander Suri, Member (T) For the Appellant : Kuldip Mullick, Advocate, Shashi Agarwal, Liquidator, Aayush Lakhotia For the Respondent : Moti Sagar Tiwari and Sailendra Tiwari, Advocates ORDER Harish Chander Suri, Member (T) 1. The Operational Creditor M/s. Aanchal Iron and Steels Private Limited has filed this application under Section 9 of the Insolvency Bankruptcy Code, 2016 (I B Code) read with Rule 11 of the National Company Law Tribunal Rules 2016, against the Corporate Debtor, M/s. Shyam Sel and Power Limited for not making the payment of ₹ 1,70,82,059.04 (Rupees One Crore Seventy Lakh Eighty Two Thousand Fifty Nine and Paise Four Only) which has allegedly become due and payable by the Corporate Debtor from February 12, 2019. Pending the application, the Operational Creditor has filed an Interim application being I.A. (IB) No. 769/KB/2020 for an early hearing. This I.A. and C.P. were fixed for hearing on 24.09.2020 through Video conferencing since the work of the Tribunal was disrupted due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... editor to the Corporate Debtor which was lying unpaid till then i.e. ₹ 1,70,82,059.04 along with interest. The said notice was duly delivered and the Corporate Debtor replied to the said notice through its advocate. 5. The reply of the Corporate Debtor to the notice issued by the Operational Creditor mainly raised the issue that the supplies received from the Operational Creditor during the month of October 2017 and November 2017 were not as per the desired specifications and when the matter was brought to the notice of the Operational Creditor, the Operational Creditor allegedly expressed their inability to take back such supplies as they would become completely redundant, useless and lose all its commercial value and be sold for scrap. It is stated in the reply that the Corporate Debtor was requested to consume and appropriate such rejected products and agreed to make adequate deduction in the invoiced value towards these rejected products. It is further stated in the reply that the Operational Creditor agreed to reduction of ₹ 1,54,00,000/- (Rupees One Crore Fifty-Four Lakh Only), and that only a sum of ₹ 57,491/- (Rupees Fifty Seven Thousand Four Hundred Ni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Debtor denied that the goods were received from the Operational Creditor without any objection or demur with regard to quantity and quality of the goods. It is stated that the Corporate Debtor had raised its complaint with regard to quality of the goods and requested the Operational Creditor to take back such goods as the same could not be used for the specified work. It is stated that the Corporate Debtor had also raised a debit note under the cover of its letter dated 17th January, 2018 which was duly received by the Operational Creditor. The CD further stated to have also made payment of ₹ 16,24,568/- as reflected in the bank statement enclosed to the affidavit. Credit for that amount has however not been given by the Operational Creditor. It is submitted that the disputes with regard to quality of goods was raised way back in 2017 and prior to issuance of the statutory notice can be considered as pre-existing dispute and the application cannot be entertained and should be dismissed. 10. The Operational Creditor, however, denied in the rejoinder that the calculation of the amount made by the Operational Creditor is incorrect as alleged or at all. It was denied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was further denied that there was any pre-existing dispute. 12. In the sur-rejoinder filed by the Corporate Debtor, we find that the cheque of ₹ 16,24,568/- (Rupees Sixteen Lakh Twenty Four Thousand Five Hundred Sixty Eight Only) was issued to Aanchal Ispat Limited and that it was not received by the Operational Creditor. The Corporate Debtor has filed a Certificate dated 13th July, 2020 issued by the HDFC Bank certifying the issue of the said cheque by the Corporate Debtor and the same is marked with the letter 'A'. 13. While carefully going through the said certificate annexed with the sur-rejoinder filed by the Corporate Debtor it would be seen that the said cheque No. 014545 for ₹ 16,24,568/- issued from Cash credit account no. 00140120000257 by Shyam Sel Power Limited was stated to have been issued in favour of Aanchal Iron and Steel Private Limited and was cleared on 12.09.2017. It is also stated in that very certificate that the certificate was issued at the specific request of M/s. Shyam Sel Power Limited without attaching any risk and responsibility on Bank or any signing officer in any respect whatsoever, more particularly either as guar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m August, 2017 to November, 2017. It has further been proved by the Operational Creditor that a sum of ₹ 5,97,31,195/- has been received from the Corporate Debtor but, for the remaining amount of ₹ 1,70,82,059.04 the Corporate Debtor defaulted in making payment. The demand notice dated 27th June, 2019 under Section 8 of the IBC has admittedly been received by the Corporate Debtor and a reply thereto was also sent on July 9, 2019. The Operational Creditor further issued a reply on 19th September, 2019. The Operational Creditor has submitted that the Operational Creditor had paid GST in respect of the total supplies and filed GST returns with respect to the same. The Corporate Debtor has also availed the tax benefit as input tax credit and there is no mismatch. No input tax credit was reversed by the Corporate Debtor. Ld. Counsel for the Operational Creditor further argued that the Corporate Debtor has admitted its liability as the holding Company of the Corporate Debtor viz., Shyam Metalics and Energy Limited has filed a consolidated Balance Sheet and annexed thereto is a consolidated list of Sundry Creditors as on 31st March, 2018, whereby the holding Company to the Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erational Creditor, for the both the parties have different versions. 19. The Corporate Debtor has allegedly enclosed letter dated 13th November, 2017 addressed to the Operational Creditor which allegedly have been received by the Operational Creditor on 14.11.2017, the contents of the letter are as under:- This is with reference to the supply of Ms. Scrap during the period from August 17, October 17 and November 2017. As per our telephonic conversation we had, please note that the goods supplied during the month of October'17 and November'17 did not match the specifications. However, even after several intimation over phone, we are yet to receive any response from your side. Hence, we will be bound to send back the goods supplied during the month of October'17 and November'17 amounting to ₹ 5,18,25,895/- to your factory as such goods does not match the quality specifications . 20. Another letter dated 17th January, 2018 was again addressed to the Operational Creditor, which is alleged to have been received by the Operational Creditor on 18th January, 2018. The Operational Creditor, however, has denied having received either of the two letters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it had been expressed by the Operational Creditor that the return of the goods would be a huge loss for the Operational Creditor as these goods might not fetch desired market price. Considering the relationship between the parties over the years the Corporate Debtor had agreed to utilize the rejected goods in the Factory after suitable deductions and that a deduction of ₹ 1,54,00,000/- from total supplied value was mutually agreed. It is surprising that several subsequent meetings were allegedly held between the Corporate Debtor and the Official representatives of the Operational Creditor and it is stated to have been agreed too between the parties in those meetings and discussions but, no minutes of the meetings have been recorded or signed by the parties. If there had been any such meetings between the parties, the first thing that could have been done by both the Companies through their official representatives who attended the meetings, would be to get a note or minutes recorded, duly signed by both the parties where such a huge amount of ₹ 1.54 crores was to be waived off by one party in favour of the other party and a debit note of the said amount was to be accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the Adjudicating Authority has to reject the application. But the facts in the present case are otherwise. The main points which weighed in our mind are that goods have not been returned and admittedly consumed by the Corporate Debtor. There are no minutes in spite of meetings having taken place between the representatives of the Operational Creditor and the Corporate Debtor, the two letters dated 13th November, 2017 and 17th January, 2018 have been unilaterally drafted and allegedly sent to the Corporate Debtor later on with no specific receipt by any responsible officer of the Operational Creditor. What was the method of calculation adopted by the parties in reaching the amount of debit note is not clear. The Corporate Debtor has availed tax benefit as per input tax credit and no input tax credit was reversed by the Corporate Debtor. If there had been any such agreement even though an oral one for issuance or acceptance of a debit note to the tune of ₹ 1.54 crores, the Corporate Debtor would have immediately reversed the input tax credit. If there had been meetings or discussions for about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of the Insolvency Bankruptcy Code, 2016 prohibits the following: i. The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; ii. Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; iii. 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); v) The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. vi) The services rendered to the corporate debtor as may be specified shall not be terminated, suspended, or interrupted during the moratorium period. vii) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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