TMI Blog2021 (5) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... repayable in twelve (12) instalments starting from April, 2018 to March, 2019. Thereby, the operational debt has become financial debt in view of the Agreement entered into between the parties. The Applicant filed the application under Section 7 as subsequently Loan Agreement entered into between the parties for repayment of the due amount. As such, the contention of the Corporate Debtor that it is an amount was due only for supply of goods is untenable and cannot be taken as stand for dismissing the application. Taking into account, the subsequent developments in the matter which was agreed for by both the parties. There is a financial debt which was due and not paid. Accordingly, the application has been admitted - Moratorium declared. - CP (IB) No. 207/7/HDB/2020 - - - Dated:- 28-4-2021 - Bhaskara Pantula Mohan, Member (J) And Veera Brahma Rao Arekapudi, Member (T) For the Appellant : Saurabh Agarwal, Advocate For the Respondents : T.V.P. Sai Vihari and V. Subba Rao, Advocates ORDER Bhaskara Pantula Mohan, Member (J) 1. The present petition is filed by M/s. BRS Enterprises Trading Limited/Financial Creditor alleging that M/s. SMV Commodities an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extra expenditure of ₹ 1.00 crore. It is also averred that Financial Creditor had put severe pressure on the Corporate Debtor for releasing the funds along with interest including serving of legal notice. iv. It is averred that on 05.03.2018, both the parties agreed and entered into a Loan Agreement on the terms and conditions to return the money in 12 equated monthly instalments starting from 01.04.2018 and in case of any default in payment of instalments, interest will be charged @ 12% per annum from the due date i.e. 1st October, 2016 to till the payment of the instalment. But the Corporate Debtor failed to make even a single instalment for which the Financial Creditor had given further time upto 31.10.2019. However, the Corporate Debtor could not utilize the extended time frame for repayment of the financial debt of ₹ 3,42,02,700/- till the date of filing the application. Therefore, the Financial Creditor has left with no choice except filing this petition under Section 7 of Insolvency Bankruptcy Code, 2016. v. It is also averred that there is no dispute of financial debt pending between the Financial Creditor and the Corporate Debtor. 3. The averme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chase Order in August, 2016 for supply of 890 MTs of TMT bars from Corporate Debtor. Considering the long relationship with the Corporate Debtor, the Financial Creditor accepted to supply the material as per the Purchase Order and supplied the material as per the purchase order. The total sale value being ₹ 3,42,02,700/-. Since then, after making several requests, the Corporate Debtor could not make the payment. In the light of the non-payment, both the parties agreed and entered into a Loan Agreement on 05.03.2018 to pay back the due amount in 12 equal monthly instalments commencing from April, 2018 to March, 2019. In case of default of any instalment, the Corporate Debtor shall pay interest @ 12% per annum on that instalment from due date i.e. 1st October, 2016. 9. The counsel for Financial Creditor would contend that the Corporate Debtor failed to honour even a single instalment as per the Loan Agreement. Hence, the present application is filed for recovery of their dues. Counsel for Corporate Debtor also contended that due to the default in repayment of the goods supplied, both the parties agreed and converted the due amount into a loan by entering a Loan Agreement on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch, 2019. Thereby, the operational debt has become financial debt in view of the Agreement entered into between the parties. Accordingly, the Financial Creditor who supplied the goods initially, the Applicant herein who was the supplier of goods initially has become the Financial Creditor as per the terms of the Loan Agreement. Accordingly, the Applicant filed the application under Section 7 as subsequently Loan Agreement entered into between the parties for repayment of the due amount. As such, the contention of the Corporate Debtor that it is an amount was due only for supply of goods is untenable and cannot be taken as stand for dismissing the application. Taking into account, the subsequent developments in the matter which was agreed for by both the parties. 15. In the light of the above observations, we are of the view that there is a financial debt which was due and not paid. Accordingly, the application has been admitted. 16. Hence, the Adjudicating Authority admits this Petition under Section 7 of IBC, 2016, declaring moratorium for the purposes referred to in Section 14 of the Code, with the following directions:- i. The Bench hereby prohibits the institution of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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