2020 (4) TMI 514 - Tri - Insolvency and Bankruptcy

Recovery of monies due to the corporate debtor under liquidation - amount due and payable - interpretation of section 60(6) of IBC, 2016 - HELD THAT - After liquidation of the Corporate Debtor, the liquidator steps into the shoes of the Corporate Debtor and as per Regulation 39 of the IBBI (Liquidation Process) Regulation 2016, the liquidator is empowered to proceed to recover and realize the dues to the Corporate Debtor for maximization of value to the stakeholders, can initiate action for recovery of dues - Further, the maxim 'reddendo singula singulis', or for that case any interpretation should be given to a sentence, only if the said sentence is vague and ambiguous and when the section is lucid and unambiguous then there is no need for any interpretation. Further, even for the sake of argument, if the interpretation of 'reddendo singula singulis' is applied to section 60(6) of the IBC, 2016, it should be noted that the said interpretation should be confined only with the object and words contained in section 60(6) of IBC, 2016 and should not be referred or read in consonance with section 14 of IBC, 2016. It can safely be concluded that an amount of ₹ 24,36,00,048/- is due and payable by Respondent to the Corporate Debtor - Application allowed. Respondent is directed to make the payment of the said amount o within six weeks from the date of the pronouncement of this order, failing which 12% interest per annum shall be charged from the Respondent on delayed payments till the realization of the whole of amount.

Summary

Issues Involved:
1. Claim for outstanding dues.
2. Validity of inter-company transfer.
3. Limitation period for recovery of dues.
4. Authority of the Liquidator to recover dues.
5. Legitimacy of the Respondent's defenses.

Issue-wise Detailed Analysis:

1. Claim for Outstanding Dues:
The Applicant, acting as the Liquidator for Surana Industries Limited (Corporate Debtor), sought an order directing the Respondent to release the outstanding amount of ?24,36,00,048 with reasonable interest for goods supplied. The Corporate Debtor supplied goods to the Respondent, and the Respondent failed to pay the outstanding amount, which was duly admitted by the Respondent.

2. Validity of Inter-Company Transfer:
The Respondent claimed that the outstanding dues were settled through an inter-company transfer involving M/s. Tribovan Enterprises Private Limited, alleged to be a sister concern of the Corporate Debtor. The Liquidator verified the records and found no evidence to substantiate the Respondent's claim. The Tribunal observed that the alleged inter-company transfer was a "SHAM" and an illegitimate attempt to discredit the legitimate claims of the Corporate Debtor.

3. Limitation Period for Recovery of Dues:
The Respondent argued that the claim was barred by limitation, referencing the Supreme Court judgment in B.K. Educational Services (P.) Ltd. v. Parag Gupta & Associates. The Tribunal held that the moratorium period during the Corporate Insolvency Resolution Process (CIRP) should be excluded while computing the limitation period. The application was filed within the permissible timeline, considering the exclusion of the moratorium period.

4. Authority of the Liquidator to Recover Dues:
The Tribunal confirmed that the Liquidator is empowered under Section 35 of the Insolvency and Bankruptcy Code, 2016, to collect debts owed to the Corporate Debtor. The Liquidator's obligation to initiate recovery proceedings was emphasized, especially when the debtors failed to make payments.

5. Legitimacy of the Respondent's Defenses:
The Respondent's defense of inter-company adjustments was rejected due to a lack of credible evidence. The Tribunal noted that such a significant claim could not be set off under mutual owing without proper authorization and documentation. The Respondent's attempt to introduce a letter for the set-off after eight months was deemed an afterthought and highly objectionable.

Conclusion:
The Tribunal concluded that ?24,36,00,048 was due and payable by the Respondent to the Corporate Debtor. The application was allowed, and the Respondent was directed to make the payment within six weeks from the date of the order, failing which 12% interest per annum would be charged on delayed payments until the full amount was realized.