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TMI Blog2023 (5) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... btor. This Order was reserved on 11.10.2022. Additional written submissions have been filed vide Diary No. 3437/2022 dated 23.11.2022 by the Respondent/Corporate Debtor before pronouncement of the Order. Learned Senior Counsel appearing on behalf of the Respondent submits that on 14.11.2022, entire claim amount of Rs. 16,41,96,213.38/- Principal amount and applicable GST making a total amount of Rs. 18.68,55.290.82/-has been paid by the Respondent/ Corporate Debtor. In view of the payment made, the present petition must be rejected under Section 9(5)(ii)(b) of IBC, 2016. Leamed Senior Counsel appearing on behalf of the Petitioner/ Operational Creditor submits that the entire amount has not been paid by the Respondent/ Corporate Debtor. Interest amount is also to be paid by the Respondent/ Corporate Debtor. A total Amount of Rs. 10,59,37,689/- is yet to be deposited by the Corporate Debtor. In view of the recent development in the matter, both parties are permitted to settle the matter amicably within one week." 2. The Appellant who was Respondent in the Section 9 application impleaded as Corporate Debtor has come up in this Appeal challenging the order dated 28.11.2022. Brief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collected. vii. The Operational Creditor issued Debit Note on Corporate Debtor for an amount of Rs.18,86,68,519/- on 18.09.2018. The Corporate Debtor did not made payment of Safeguard Duty. viii. The Customs Department issued notice dated 30.11.2018 to the Operational Creditor for finalization of assessment and payment of safeguard duty. ix. The Operational Creditor issued a Demand Notice dated 06.11.2020 demanding total amount of debt of Rs.18,86,68,519/-. The Corporate Debtor replied to the Demand Notice denying its liability to pay the outstanding amount. x. The Operational Creditor filed Section 9 application claiming an amount of Rs.17,24,06,024/-. Section 9 application was filed on 16.07.2021. Parties were heard on issuance of notice by the Adjudicating Authority on 10.11.2021. The Adjudicating Authority, however, directed the Corporate Debtor to file its reply by order dated 10.11.2021. xi. On 07.09.2022, the Senior learned counsel for the Corporate Debtor submitted that once assessment of safeguard duty is done by the competent authority, the Appellant will make the payment of the same within the stipulated period and matter was adjourned to 11.10.2022. xii. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quantification of amounts by the Customs Authorities is irrelevant because the relevant date to determine maintainability of the claim is the date on which the Section 9 application was filed. The Statement made by Learned Senior Counsel for the Appellant on 07.09.2022 was only with regard to payment of safeguard duty, which payment having been made, the same counsel requested the Adjudicating Authority to dismiss the application. Continuation of Section 9 application for interest is not maintainable. The payment of interest has been disputed by the Appellant. The Appellant has requested the Respondent to challenge the demand by filing an appropriate appeal. Under the Contract between the parties, the Operational Creditor was required to indemnify the Appellant against all claims in connection to the Government taxes, duties, etc. Challenge to the safeguard duty itself is sub-judicate before the Hon'ble Supreme Court and Hon'ble High Court including Writ Petition filed by the Appellant. Appellant is a fully solvent company with a net worth of Rs.34,281 crores in the year 2021-22 with profit after tax of Rs.9,629 crores. There is no justification of initiating any insolvency proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; 1 TOTAL AMOUNT OF DEBT Total Amount of Debt Rs. 17,24,06,024.33 (Rupees Seventeen Crores Twenty Four Lakhs Six Thousand and Twenty Four and Thirty Three Paise only). Comprising: Principal CGST @ 2.50% GST @ 2.50% Total Outstanding 16,41,96,213.65 41,04,905.34 41,04,905.34 17,24,06,024.33 The Applicant reserves the right to claim further interest, penalties and/or delayed charges on the aforesaid amounts, which may be levied by the Customs department and/or incurred by the Applicant, thereon as on the Insolvency Commencement Date of the Corporate Debtor. 8. In Part IV, under the heading 'Details of transactions on account of which debt fell due', in Para 26 and 27 following has been pleaded: "26. It is submitted that pursuant to the above, while finalizing the present petition, the Operational Creditor observed that an amount of Rs. 1,62,62,495.29/- has inadvertently been included in excess in the Demand Notice. Therefore, the actual amount of the demand towards Safeguard Duty is Rs. 17,24,06,024.33 (Rupees Seventeen Crores Twenty Four Lakhs Six Thousand and Twenty Four and Thirty Three Paise only) instead of Rs. 18,86,68,519.62/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The order further notice that submission was made on behalf of the learned senior counsel for the Appellant that in view of the aforesaid deposit, the application should be rejected, which was opposed by learned counsel for the Respondent stating that interest is also to be paid by the Corporate Debtor. 13. Operational Debt as was claimed in the application under Section 9 which is apparent from Part IV of the Application which clearly states that the Operational Debt was only Rs.17,24,06,024/- and Applicant has reserved its right to claim further interest, penalties or delayed charges, etc. We, thus, are of the view that on payment of entire Operational Debt as was claimed in the application, there was no occasion to continue the Section 9 application any further. 14. We also notice submission of learned counsel for the Respondent that the Appellant through its senior counsel has made categorical statement on 07.09.2022 that once assessment is made they shall make the payment, which statement clearly means that Appellant undertake to make the payment of assessed amount which includes Safeguard Duty and interest. 15. We may first notice the order dated 07.09.2022 passed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor to challenge the levy of interest since if the liability of the interest is of the Appellant as per the Supply Agreement, it was open for the Appellant to take such recourse in accordance with law challenging the levy of interest. 20. In view of the foregoing discussion, we, thus, are of the view that Section 9 application which was filed by the Operational Creditor, the entire Operational Debt having been paid by the Corporate Debtor, there is no useful purpose in continuing the Section 9 proceeding any further. The Adjudicating Authority ought to have closed the matter and the observation that the parties are permitted to settle the matter amicably within one week, was uncalled for. Thus, we are of the view that Appeal deserves to be allowed closing the application under Section 9 filed by the Operational Creditor being CP (IB) No. 81/9/JPR/2021. We, however, are also of the view that it is open for the Appellant to take such legal proceeding as he may be advised, challenging the levy of interest. The dismissal of Section 9 application filed by the Operational Creditor being CP (IB) No. 81/9/JPR/2021 shall not preclude the Operational Creditor to take such proceedings in law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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