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TMI Blog2018 (2) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... ekar S., Advs. For The Respondent : S.P.J. Legal, Adv. ORDER Per : Hon'ble Shri Ratakonda Murali, Member (Judicial) : Heard on 20.04.2017, 28.04.2017, 31.05.2017, 07.07.2017, 27.07.2017, 09.08.2017, 30.08.2017, 20.09.2017, 17.10.2017, 14.11.2017 and 20.12.2017. The Petitioner/Corporate creditor has filed Form No.5 under Rule 6 of the I B Code, being the Operational creditor to initiate Corporate Insolvency Resolution Process against the Corporate Debtor/Respondent herein. The Petitioner M/s. Z-Tronics Infratel Pvt. Ltd., has filed the petition against the Corporate Debtor, M/s. Wipro Enterprises Pvt. Ltd. According to the Petitioner/Operational Creditor, the amount due by the Respondent/ Corporate Debtor towards principal is ₹ 38,65,155/- and towards interest is ₹ 27,62,032/- totalling to ₹ 65,98,187. It is averred in Form-5 that the Petitioner being the Operational creditor is a Registered Company and is a scrap dealer and is engaged in the business of purchase of industrial scrap material and supplying and selling to various smelling units. It is stated that the Corporate Debtor was engaged in the manufacture of sunflower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of agreement, M/s. Blue Star Alloys Pvt. Ltd., shall dismantle the Vanaspati plant and also the buildings up-to the ground level. Further the debris collected would be taken out from the premises and disposed of and the agreement provides that the work cannot be entrusted to any sub-contractor. It is further stated that M/s. Blue Star Alloys Pvt. Ltd., had to deposit ₹ 1.00 crore as advance. Further, an amount of ₹ 5.00 lakhs with applicable tax was to be paid before every despatch. Penalty is also provided that if the work is not likely to be completed by 31.12.2013. It is stated that since M/s. Blue Star Alloys Pvt. Ltd., has failed to complete the terms of agreement, therefore, the agreement came to an end by lapse of time. Further, M/s. Blue Star Alloys Pvt. Ltd., had requested for extension of time. It was extended subject to mutually agreed conditions. This is transpired from the e-mails shown as Annexure-R/2. M/s. Blue Star Allows Pvt. Ltd., had again committed default. Again, M/s. Blue Star Alloys had requested for extension of time. Meanwhile, the Respondent Company had received a document said to be Power of Attorney on behalf of Blue Star Alloys Pvt. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er was allowed to lift the industrial scrap on payment of money in advance to the Respondent corporate debtor which was made through certificate of remittances and the petitioner operational creditor was allowed to lift such quantity of industrial scrap equivalent to the value of amount remitted. The counsel contended that, in all, the petitioner operational creditor had remitted a sum of ₹ 1.01 crores to the account of the respondent corporate debtor during the period from 11.10.2013 to 11.04.2014. The counsel would contend that the petitioner-operational creditor was allowed to lift the industrial scrap worth ₹ 62,63,845/- only and there remained a balance of ₹ 38,36,155/- with the respondent corporate debtor. The counsel would contend that if the respondent-corporate debtor has failed to supply the industrial scrap for the surplus amount lying with it, then, it ought to have returned the amount to the operational creditor. But, the respondent had failed to do so. Therefore, the petitioner-operational creditor had issued a demand notice dated 24.03.2017 under Rule 5 of I B Rules. As per the demand notice, the operational creditor has demanded an amount of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As a liability or obligation respect of a claim which is due from any person and includes a financial debt or operational debt. The counsel contended that operational debt is defined in Section 5(21) of the Code, 2016 which is as under: as a claim in respect of the provision of goods or services including employment or a debt in respect of the repayment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority. Counsel contended that there is no agreement for service in this case between the petitioner and the respondent per-se. Therefore, there does not lie any liability to pay. Counsel contended that the petitioner is not at an operational creditor as defined under Section 5(20) of I B Code which is as under: operational creditor mean a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred . Counsel contended that the respondent company has entered into contract with M/s. Blue Star Alloys Pvt. Ltd. for sale of Vanaspati Plant equipment and dismantling of building structure and its disposal outside th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el has relied on Annexure-R/6 from which it is evident that the petitioner company represented by the authorised signatory had informed the respondent company that whatever amounts remitted should be adjusted against this sale order between M/s. Blue Star Alloys Pvt. Ltd. and the respondent company. Thus, it is very clear that the petitioner herein has clearly admitted that whatever amounts remitted are to be adjusted against the sale order entered between the respondent company and M/s. Blue Star Alloys Pvt. Ltd. Thus, the petitioner has unequivocally admitted that the remittances are with reference to the contract between the respondent company and M/s. Blue Star Alloys Pvt. Ltd. It goes without saying that there is no direct contract of service between the petitioner and the respondent company. But, the petitioner may be an agent of M/s. Blue Star Alloys Pvt. Ltd. and also a power of attorney holder for M/s. Blue star Alloys Pvt. Ltd. The letters are dated 03.01.2014. So, whatever amount is remitted by the petitioner herein to the account of the respondent company, it is towards the sale order between M/s. Blue Star Alloys Pvt. Ltd. and M/s. Wipro Enterprises Ltd. Further, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dispute. 5.6 dispute includes a suit or arbitration proceedings relating to- (b) The quality of goods or service; (c) the breach of a representation or warranty. The contention of the counsel for the respondent company is that the deadline for completion of the agreement was 22.05.2014. This was not adhered to by M/s. Blue Star Alloys Pvt. Ltd. Thus, there was non- compliance of the terms and conditions of the agreement and that a notice was issued to M/s. Blue Star Alloys Pvt. Ltd. on 28.08.2014 indicating forfeiture of the security deposit. It is shown as Annexure-R/8. We have seen Annexure-R/8. The contracted amount was ₹ 4.15 crores and that it should have been completed by 30.12.2013. However, the time was extended till 22.04.2014 and thereafter, again extended up to 22.05.2014. It is clearly mentioned in this letter addressed to M/s. Blue Star Alloys Pvt. Ltd. that if the company failed to fulfil the obligation undertaken under the agreement, any amount available on account of this contract will be forfeited. However, in this letter, the respondent company has again extended the time till 15.09.2014 as a final chance. So, the correspondence wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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