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TMI Blog2017 (11) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... ase where there is no dispute, which was even raised in reply to the notice under Section 434 of the Companies Act, 1956. The remedy to the petitioner may lie elsewhere and not by invoking insolvency resolution process under the Code. - CP. (IB) NO. 63/CHD/PB/2017 A/w CAVEAT NO. 4/2017 - - - Dated:- 25-10-2017 - MR. R.P. NAGRATH, J. For The Petitioner : Rakesh Bhatia, Adv. For The Respondent : Aalok Jagga, Adv., Nesar Ahmed, PCS and Anil Malhan, Company Secretary ORDER This petition has been filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (for short to be referred hereinafter as the Code ) by filing application in Form No.5 as prescribed under Rule 6(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity the (Rules ) to initiate insolvency resolution process against the Respondent-Corporate Debtor. The petitioner-operational creditor, a company incorporated under the Companies Act, 1956, having been allotted CIN U18109PB2010PTC033695 filed this petition on the basis of Board resolution dated 27.06.2017 (Annexure-II) authorising Mr. Pankaj Singhania, Director of the company to issue and sign the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d upto 28.06.2017 for the F.Y. 2017-18 with copies of all the invoices. This notice was sent by Speed post on 30.06.2017 as per the postal receipt at page 141 of the paper book and the tracking report at page 142 of the paper book shows that the same was delivered to the corporate debtor on 01.07.2017. This petition was filed on 21.07.2017 i.e. after the expiry of 10 days of the service of the notice. 6. It is stated further that the respondent sent reply dated 08.7.2017 to the demand notice which is afterthought. The respondent-corporate debtor is said to have raised the dispute just to delay and defeat the claim of the petitioner. Most of the goods were dispatched along with the acknowledgement in Form VAT-12-A (Declaration regarding Intrastate Transaction through e-trip). The corporate debtor is said to have not raised any dispute till the service of the notice. It is, however, alleged that before this demand notice the petitioner had also sent a notice under Sections 433 and 434 of the Companies Act to which a reply was sent by the respondent. However, the corporate debtor approached the operational creditor to settle the issue and sought time to make the payment. In the mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Copy of the notification of advertisement of the petition is annexed with R-1 (colly). It is stated that the petitioner had the knowledge of the pendency of winding up petition but failed to provide the necessary information in this regard as required under Rule 10(2) of the Rules. This amounts to concealment of the material facts. 11. It is then stated that the petitioner remained silent right from 23.07.2014, date of last invoice till a notice dated 21.07.2016 was sent under Section 434 of the Companies Act. Copy of the said notice is at Annexure R-2 (colly) and the respondent sent reply to the said notice denying any such amount outstanding in the record of the petitioner and stated the claim to be bogus and requested the petitioner to supply documents to establish the claim. 12. Even the perusal of the financial statements of the petitioner for the years ending 31.03.2015 and 31.03.2016 do not show any amount outstanding against the respondent. Copy of the financial statements are attached as Annexure R-3 (colly) downloaded from the portal of the Ministry of Corporate Affairs. In these financial statements, the petitioner has entered the outstanding debt for more than 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year ending 31.03.2015. Copies of the said financial statements downloaded from the portal of the Ministry of Corporate Affairs are at Annexure 13 (colly). In fact, the petitioner company transferred the amount in question to Bad Debts account as reflected in the financial statement for the year ending 31.03.2015. This entry is reflected in Annexure Note No. 20 column (c) under heading Selling and Distribution Expenses to the tune of ₹ 8,15,97,672.00 and copy of that statement which is at Annexure -14. It is further stated that M/s Universal Woollen Mills is a different firm and the petitioner company has a distinct entity. The amount which is claimed with regard to M/s Universal Woollen Mills by Punjab National Bank has nothing to do with the amount which the respondent owes to the petitioner company. 15. I have heard the counsel for the parties and perused the record carefully. 16. Learned counsel for petitioner contended that the goods were sent to the respondent vide various invoices (Annexure-I). These are all VAT invoices and Form VAT-12-A was attached with all these invoices mentioning the vehicle number on each of these invoices. Except for the first invoice d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 1,06,00,000/- as per the ledger balance dated 12.03.2014 (page 25 of reply). The respondent-company is entitled to claim the aforesaid amount with interest @ 24% per annum from 12.03.2014, which amount has not been paid till date. It was stated that certain goods supplied by the petitioner were defective in nature which the petitioner has already received back and even debit notes have been issued in this regard, and for this reason that the petitioner did not raise any protest for the past about two years. Even in the reply to the demand notice sent under Section 8 of the Code a similar defence has been set up. Learned counsel for the petitioner vehemently contended that this is a moonshine defence because there is no exchange of e-mails/correspondence between the parties nor relied upon by the respondent with regard to the defective material or return of the defective material nor any such specific stand is taken in the objections filed by the respondent to the instant petition though such a plea was raised in the reply to the notice issued under Section 434 of the Companies Act, 1956 and the demand notice under Section 8 of the Code. 20. Having minutely perused the record e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not file its claim with the Official Liquidator. 23. Learned counsel for petitioner has not been able to convince as to why just within 6 months after the respondent defaulted it has written off the debt in the books of account despite the fact that respondent company was in losses for more than ₹ 24 crores in the previous year ending 31.03.2014 and the transactions in question are of the subsequent period. The books of account of the creditor is an important piece of evidence for holding liability of the debtor. Before writing off the debt, what steps were taken by the petitioner to recover the amount has also not been explained. The advantages which the petitioner may have availed by writing off the debt or showing the bad debt as expenses in the financial statements cannot be totally ignored. This does not seem to be a common trade practice to write off the debt so soon that too within a period of 6 months of the transaction between the parties. 24. With the aforesaid facts and circumstances the present cannot be said to be a case where there is no dispute, which was even raised in reply to the notice under Section 434 of the Companies Act, 1956. The remedy to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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