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TMI Blog2024 (3) TMI 1294X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 as it has been rendered by the Learned Adjudicating Authority, Hyderabad Bench in CP(IB) No. 493/9/HDB/2018, consequential by virtue of the Impugned Order rendered the Application preferred by the Respondent/Operational Creditor under Section 9 of the Code of 2016 has been admitted, to be proceeded with further as per law. 2) The Appellant who claims himself as to be the Shareholder, Promoter and erstwhile Director of M/s Bevcon Wayors Pvt. Ltd., the Corporate Debtor. He has submitted that initially in the year of 2012, the Corporate Debtor, Operational Creditor and a Company called as M/s. GTL Limited had entered into Consortium Agreement dated 10.04.2012, which was later further sought to be qualified by Addendum Consortium Agreement dated 11.04.2012. It was submitted, that a tender was awarded by one M/s. GVK Coal (Tokisud) Company Pvt. Ltd. to the Consortium for the purposes of planning, designing, engineering, procuring, construction, fabrication, supply, erection and commissioning of the processing plant and consequent to this, a contract agreement bearing number GVK/Tokisud Coal/CHP/CA No.004 and dated 05.09.2012 was entered between the aforesaid concern M/s. GVK Coal (To ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es maintained by the Operational Creditor. 6) In order to carve out an exception for inability to pay, the Appellant contends that the allotment of certain Coal blocks which was given during 1993 to 2010, were cancelled in pursuance to the Hon'ble Apex Court Judgment dated 24.09.2014, as it stood rendered in Writ Petition (Criminal) No. 120/2012. Consequent to the aforesaid cancellation of the Coal Block, the Appellant contends that the Coal Blocks allotted to M/s. GVK Coals, (Tokisud) Pvt. Ltd., was also cancelled and thus the aforesaid M/s. GVK Coal, is said to have invoked the contract Clause pertaining to the act of force majeure vide its letter dated 06.10.2014. 7) M/s. GVK Coals participated in subsequent invitation of Bids, which were invited by Ministry of Coal, the Government of India & participated in the 'e-auction' but they lost their Bids, the fact of which was conveyed to the Corporate Debtor by the letter of M/s. GVK Coals dated 20.02.2015. 8) The Appellant contends that owing to the cancellation of the Coal Blocks, the payments against the work done from M/s GVK Coals was delayed and ultimately was withheld due to which admittedly the Corporate Debtor failed to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nkruptcy, Code, 2016 to M/s. GVK (Coals) Ltd., but it yielded no result. To sum up, the Corporate Debtor has stated that he has tried all methods to realise pending payment from M/s. GVK Coals, but since the payments were not released, he was unable to pay the Respondent No. 1/Operational Creditor in full in view of the alleged conditions of the BACK-TO-BACK payment arrangements and that he is not liable to pay the same. 13) The Appellant who was the erstwhile Director of M/s. Bevkon Wayors Pvt. Ltd., states that the Corporate Debtor and the Respondents are Consortium Partners and as per the terms of the participation a clear understanding was said to have been made that from the receivables from M/s. GVK Coals, is to be shared among them in order to meet out the outstanding payments. Further, the documents which have been brought out from the proceedings before the Adjudicating Authority, reveal the fact that the correspondences were being made for the payments only after the receipt of payment from M/s. GVK Coals. Hence, the Corporate Debtor has submitted, that he is not liable to pay any further amount to the Operational Creditor as no payment was made to them by M/s. GVK Coals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder passed by the Hon'ble Adjudicating Authority, NCLT, Hyderabad Bench after thorough examination of the facts and gave number of opportunities to settle the matter (as craved by the Counsel of Corporate Debtor in various hearings) and decided the matter, on merits, as per law and initiated Corporate Insolvency Resolution Process (CIRP) vide impugned orders. That, the Hon'ble Adjudicating Authority, NCLT, Hyderabad Bench decision in its impugned orders under appeal is correct and the alleged back-to-back payment of invoiced amounts is twisted and misrepresented by the Appellant before this Hon'ble Tribunal while the fact on record clearly shows that the invoices of the Operational Creditor (sub-contractor) are padded up with their mark up and submitted onwards by the Corporate Debtor (main contractor) to the principal, M/s. GVK Coal (Tokisud) Company Pvt. Ltd. who awarded the main contract to the Corporate Debtor. The Corporate Debtor received payments on the padded up invoices vis-d-vis invoices of the Operational Creditor as may be clearly seen from the documentary evidences particularly shown at pages 125, 126 and l27 of the appeal, which was extracted from the all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Further that the alleged payment which the Corporate Debtor contends to have been made was not admitted by the Operational Creditor and has contended that the payment were made towards the admitted debt of Rs.1,26,70,782/-, not otherwise as claimed by Corporate Debtor. 20) The point to determine is as to whether based on the documentary evidence which were furnished by the Corporate Debtor whether any debt was payable at all and what is the basis on which it has been claimed to have been paid. So far as it relates to the Corporate Debtor, he has not denied the factum of placement of the Purchase Order dated 1st November 2012 and 22.03.2014. The Corporate Debtor has also admitted the execution of the aforesaid Order and the part-payments of the amount claimed by the invoices raised. Hence, it is the contention of the Corporate Debtor that since the purchase order provided for back-to-back payment of the transaction, the dues in full could not be remitted back to the Operational Creditor due to non-receipt of the part of the amount from M/s. GVK Coal (M/s. Tokisud Company Pvt. Ltd.). On perusal of the records including the contract agreement (Anx. 2A Page 74) and the purchase orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if any of the ingredients as aforesaid exists, the application under Section 9 would be sustainable. Relevant observation is extracted hereunder : - "Therefore, the adjudicating authority, when examining an application under Section 9 of the Act will have to determine: (i) Whether there is an "Operational Debt" as defined exceeding Rs.1 lakh? (See Section 4 of the Act) (ii) Whether the documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid? and (iii) Whether there is existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt in relation to such dispute?" As per the records, there is nothing on record to otherwise that the Corporate Debtor had any intention to pay the amount due prior to the date the Demand Notice was issued by the Operational Creditor and that there was existence of any dispute with Operational Creditor by the Corporate Debtor prior to the receipt of demand notice served as a mandatory notice in terms of Section 7 of the Insolvency and Bankruptcy Code, 2016. Hence, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... philosophy of back-to-back payment arrangement. Thus, the arguments as extended by the Appellant is not accepted. 25) The act of the Adjudicating Authority in declaring the moratorium for the purpose of Section 14 of the Code, in the light of provisions contained under Section 9 dealing with the aspect of remittance of the dues claimed, does not appear to suffer from any apparent error of law or a fact on record which could call for acceptance of the defence taken by the Corporate Debtor or questioning the existence of the dues to be paid and/or admitting the existence of any prior dispute regarding the amount due remaining unpaid. 26) Owing to the aforesaid fact, that all the aspects pertaining to the payability of dues stood established, coupled with the fact that the two documents which were relied on i.e. the purchase order and the contract agreement did not anywhere stipulate as a condition precedent of back-to-back payment as a condition to make the payments of amount due only after the receipt of amount from M/s. GVK Coals (Tokisud) Company Pvt. Ltd. that the Appellant has received a sum much higher than the amount payable to the Respondent No.1/Operational Creditor which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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