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TMI Blog2021 (12) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... to various clients including the Corporate Debtor, which is a company registered under the Companies Act, 2013 having its registered office at Aroor, Kerala. They have purchased aqua products on different dates supplied by the Operational Creditor through their agents. The Operational Creditor submitted that the Corporate Debtor received the materials but made only part payments on two occasions aggregating to Rs. 50,00,000/- (Rs. 25,00,000/- on 28.05.2020 and Rs. 25,00,000/- on 28.07.2020) made by the Corporate Debtor against total sales of Rs. 1,43,53,247/- leaving a balance principal of Rs. 93,53,247/- . This amount together with the interest thereon the operational debt as on 30.11.2020 stood as Rs. 1,05,80,698/- (Rupees one crore five lakhs eighty thousand six hundred ninety-eight only) at the agreed rate of interest @ 18% p.a. and as per the trade practice for delayed payments. They stated that there is contractual relationship existing between both the parties. It is also stated that the Corporate Debtor in their Ledger Accountacknowledged the debt of principal of Rs. 93,53,248/- as on 27.07.2020which was signed by its agent. 3. The Operational Creditor submitted that they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e parties nor there is a purchase order, which is signed by Applicant and the Corporate Debtor or any agreement or terms agreed directly between the parties. They further contended that there is no email communication or oral communications made between the applicant and the Corporate Debtor. Their main contention is that they have dealt with the entire transactions through one Mr.Unni(hereinafter referred as 'agent') who spoke and negotiated the subject transaction with them. There is no agreement regarding the price or quantity of the transaction which was agreed between the Applicant and the Corporate Debtor.They further stated that as per the understanding between the agent and the Corporate Debtor, and that the agent agreed to arrange for the supply of Vannamei Shrimp to them. 7. The Corporate Debtor further stated that due to the spread of Covid-19, they have apprehension that there are some restrictions which are about to come and hence they informed the agent to hold the supply of the goods. However, the agent compelled the Corporate Debtor to take delivery of the same informing that he will give good discount for the cargo. Considering the good relationship with the agent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e IBC's suspension. The IBC suspension is applicable for a period "of six months or such further period not exceeding one year from such date, as may be notified in this behalf". The IBC, suspension starts from 25/02/2020 and hence no proceedings can be initiated against the Corporate Debtor. As there is a clear case of pre-existing dispute regarding quality of the materials supplied and no privity of contract between the parties, the Corporate Debtor prayed for dismissal of this application. Findings: 12. On hearing the arguments advanced by both the sides and on perusal of the documents and evidences placed on record, this Bench finds it necessary to determine whether the provisions of Section 10A stand attracted to an application under Section 9 which was filed after 5th June 2020 (the date on which the provision came into force) in respect of a default which has occurred after 25 March 2020. 13. This application has been filed on 16.09.2020 under Section 9 of the IBC on the ground that there was a default in the payment of the operational dues of the applicant. An Ordinance was promulgated by the President of India on 5th June 2020 by which Section 10A was inserted into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect, the decision of the Hon'ble Supreme Court in Ramesh Kymal Versus M/s Siemens Gamesa Renewable Power Pvt Ltd-Civil Appeal No. 4050 of 2020 is relevant, the relevant paragraphs of that decision are quoted below: "17. Section 10A makes a reference to the initiation of the CIRP. Clauses (11) and (12) of Section 5 of the IBC define two distinct concepts, namely: 11 (i) the initiation date; and (ii) the insolvency commencement date. 18. The "initiation date" is defined in Section 5(11) in the following terms: "5(11) "initiation date" means the date on which a financial creditor, corporate applicant or operational creditor, as the case may be, makes an application to the Adjudicating Authority for initiating corporate insolvency resolution process;" The expression "insolvency commencement date" is defined in Section 5(12) in the following terms: "5(12) "insolvency commencement date" means the date of admission of an application for initiating corporate insolvency resolution process by the Adjudicating Authority under sections 7, 9 or section 10, as the case may be:" xxxxxx 24. We have already clarified that the correct interpretation of Section 10A cannot be merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced, the last date of payment (Rs. 25,00,000) is shown as 27.07.2020 and a balance payment of Rs. 1,05,80,698/- comprising unpaid principal amount of Rs. 93,53,247/- plus interest of Rs. 12,27,449/- is pending to be paid. 17. In view of the above discussions, it is clear that the Executive in the Promulgation of the Ordinance to meet an extraordinary situation and to avoid causing further stress to the already beleaguered businesses due to COVID pandemic throughout the world and also in addition affected by the lock down enforced by the State of the Union, all beyond their control have chosen to suspend the filing of any application in relation to defaults arising on or after 25.03.2020. 18. In this application, the Corporate Debtor received the products in various lots on 21.03.2020 and 23.03.2020 and also on 30.05.2020, where the part payments were made on 28.05.2020 and 28.07.2020 into the bank account of the Operational Creditor against the total amount due. Therefore, the date of default cannot be considered as 21.03.2020, as it is only the date of order but from the date 28.07.2020, the Corporate Debtor failed to pay the balance amount. 19. Given the severity of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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