9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (4) TMI 1667 - Tri - Insolvency and BankruptcyPossession of materials by the respondent belonging to the applicant - Whether the Applicant has any locus standi to file the Application and claim the materials from the Corporate Debtor? Held that - According to general rule of contract law in India, only parties to a contract may sue and may be sued in relations to the breach of the contract. This rule is based upon the doctrine of privity to contract. The doctrine of privity to contract says that only parties to a contract can sue and be sued in relation to breach or enforcement of the contract. According to Section 148 of the Indian Contract Act, 1872, a bailment is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is called the bailor . The person to whom they are delivered is called the bailee . However, in the present case, the steel plates are reported to have been delivered by M/s. GB Engineering Enterprises limited to M/s. Diinepro Private limited, which they later claims to have been delivered to the Corporate Debtor. The Applicant has never had the possession of the materials in question - also there are conflicting claims on materials which the Corporate Debtor actually did not possess. Thus, the claim of the Applicant is not substantiated by any valid documentary evidence. There is no evidence to establish that the Corporate Debtor is holding the possession of any materials belonging to the Applicant either under trust or contractual arrangements including bailment, as has been claimed by the Applicant - application dismissed.
Issues Involved:
1. Whether the Applicant has any locus standi to file the Application and claim the materials from the Corporate Debtor? Issue-wise Detailed Analysis: Issue: Whether the Applicant has any locus standi to file the Application and claim the materials from the Corporate Debtor? Factual Matrix: The Applicant, M/s. IU International Holdings PTE Limited (IUIHPL Singapore), through Uttam Sucrotech International Pvt. Ltd. (USIPL), filed C.A.No.127 of 2018 in CP 511/IB/2017 against the Corporate Debtor, M/s. Cethar Limited, represented by the Resolution Professional, V. Nagarajan. The Applicant sought: - Custody of the materials as defined in Paragraph 4 of the Application. - Restraining the Insolvency Resolution Professional from alienating or creating any third-party interest in the materials. The Applicant placed a Purchase Order dated 11.04.2017 with M/s. GB Engineering Enterprises Limited for boiler plate materials. The order was bifurcated into supply and job work components, totaling ?8.44 Crores. The order stipulated that Singapore Law governs it, and the Court of Singapore has jurisdiction. Applicant's Submissions: The Applicant argued that it paid directly to the supplier for the steel plates and, as per clause 10 of the Purchase Order, the goods became the property of the Applicant upon payment. The materials were dispatched to M/s. GB Engineering Enterprises, which subcontracted the work to M/s. Dynepro Private Limited, and further to the Corporate Debtor, M/s. Cethar Limited. Due to financial and labor issues, M/s. GB Engineering Enterprises could not complete the order, leading to a MoU dated 10.01.2018, assigning USIPL the responsibility to complete and supply the finished goods. Resolution Professional's Submissions: The Resolution Professional argued that the Application is mischievous and misconceived, stating that the Corporate Debtor had no contractual obligation with the Applicant. The Corporate Debtor's factories lacked the power and workmen to undertake any work, and the CIRP commenced on 16.06.2017, with the Resolution Professional taking control on 19.07.2017. There was no privity of contract between the Applicant and the Corporate Debtor, and the Applicant had no legal right to sue the Corporate Debtor. Tribunal's Analysis: The Tribunal examined whether the Applicant had any locus standi to claim the materials from the Corporate Debtor. The Tribunal noted: - The general rule of contract law in India is that only parties to a contract may sue and be sued, based on the doctrine of privity to contract. - The concept of bailment, as defined in Section 148 of the Indian Contract Act, 1872, did not apply since the Applicant never had possession of the materials. - The MoU dated 10.01.2018 indicated that M/s. GB Engineering Enterprises Limited held the title and possession of the semi-finished goods, with no mention of materials lying with the Corporate Debtor. - The Purchase Order from the Applicant to M/s. GB Engineering Enterprises Limited was dated 11.04.2017, but the order to the supplier was placed on 10.04.2017, indicating a baseless claim by the Applicant. Conclusion: The Tribunal concluded that the Applicant's claim was not substantiated by valid documentary evidence. There was no evidence to establish that the Corporate Debtor held possession of any materials belonging to the Applicant under trust or contractual arrangements, including bailment. Therefore, the Application was dismissed with no order as to costs. The order was pronounced in open court.
|
