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TMI Blog2018 (11) TMI 1662X X X X Extracts X X X X X X X X Extracts X X X X ..... d render such services at its manufacturing plant as being agreed upon between the Operational Creditor and Corporate Debtor. Based on the discussions and Letter of Intent dated 22.6.2016 entered between the parties, a Purchase Order dated 2.7.2016 was raised on the Corporate Debtor by the Operational Creditor for manufacturing, delivery, providing technical assistance for installation and commissioning of the said evaporator at the plant, which was duly received and accepted by the Corporate Debtor. 3. It is further stated in the Petition that as per the arrangement agreed between Operational Creditor and Corporate Debtor, Operational creditor accordingly made advance payment of Rs.4,40,000 being the 10% of the total purchase amount, i.e. Rs.44,00,000 (excluding tax) of the said Purchase Order. According to the Purchase Order, the delivery date of the said evaporator was up to 30.9.2016. Despite of repeated reminders and visit to the Corporate Debtor's site, Corporate Debtor defaulted and failed to deliver the said evaporator on the scheduled delivery date i.e. up to 30.9.2016 and within the further unilaterally extended period till 5.11.2016 by Corporate Debtor. The Operational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erational Creditor as "Annexure N", Copy of the Power of Attorney delegating powers to authorised person as "Annexure O", Letter of Authority dated 16.10.2017 of the Operational Creditor authorising Mr. Dipak D Choudhary and Mr. Rahul Gupta as authorised officers and signatory of the Operational Creditor as "Annexure P", Letter of Authority dated 27.12.2017 of the Operational Creditor authorising Advocate Rohan R. Sonawane to act and plead on behalf of the Operational Creditor as "Annexure Q" and Affidavit in support of Petition. 7. In reply to the above petition, the Corporate Debtor has filed Counter Affidavit stating that the present Petition is tainted with malafide motives and deserves to be dismissed in limine. It is stated by the Corporate Debtor that in compliance of the terms and conditions of the Purchase Order, the Corporate Debtor furnished the Advance Bank Guarantee equivalent to the 10% of the total value of the order on 3.3.2016. 8. It is stated by the Corporate Debtor that as per the letter of Intent, the Delivery Date of the said Evaporator was 30.9.2016. However, the frequent changes, rectifications to the drawings suggested by the applicant affected the techn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in case the delivery is delayed beyond 30.9.2016, the applicant shall levy liquidated damages at 0.5% per week of delay subject to maximum of 5% of the contract value." Despite both the parties agreeing to the aforesaid condition, applicant has without any reason escalated the amount of the transaction and have arrived at an exorbitant, baseless, unjustifiable and hyper inflated amount of Rs.9,90,58,377. 11. We have heard the arguments of both the parties and perused the record. On perusal of the record, it appears that the Operational Creditor has filed this Petition on the basis of termination of the contract, which was given to the Corporate Debtor for supplying the evaporators and Rs.4,40,000 amount was advanced to the Corporate Debtor for supply of goods and on termination of the contract, Operational Creditor claimed Rs.9,15,00,000 as actual financial damages and Rs.70,84,311/- and further Rs.34,066 as interest, total debt amounting to Rs.9,90,58,377/- 12. Ld. Counsel for the Corporate Debtor emphasized the maintainability of the Petition under Section 8 and 9 of the IBC, 2016. It is argued on behalf of the Corporate Debtor that "an Operational Creditor may on the occur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new, when they made the contract, to be likely to result from the breach of it. 18. It is further stated that when an obligation resembling those created by contract has been incurred and has not been discharged, any persons injured by the failure to discharge it, is entitled to receive the same compensation from the party in default, as if such person has contracted to discharge it, and had broken his contract. 19. In this case, the Petitioner has raised claim of Rs.5,00,000 per day for loss of production, which is not only in nature of consequential damages, but also completely arbitrary and baseless, which cannot be relied upon in absence of adjudication. The alleged claim is not adjudicated by any competent authority in law, and hence, such a claim cannot be described as "Operational Debt." 20. In case of E-City Media Private Limited vs Sadhrta Retail Limited in CP No.367 of 2009, the Hon'ble High Court of Judicature at Bombay has held that "The Petition for winding up cannot be maintained upon a claim for damages. Damages become payable only when they are crystallised upon adjudication. Until and unless an adjudication takes place with a resultant decree for damage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the alleged loss incurred by the Operational Creditor. The same is not covered under the definition of the Operational Debt as provided under Section 5(21) of the Code. 26. It is pertinent to mention that till filing of the petition, alleged compensation amount of Rs.9,15,00,000 was not even quantified. Even though the Petitioner, in Part IV of the Petition has mentioned actual financial damages of Rs.9,15,00,000. Further,the petitioner has mentioned Rs.9,19,40,000 as principal amount,whereas amount given as advance to the corporate debtor was only Rs.4,40,000/-. 27. The above assertion in the petition clearly shows that the petition has been filed on wrong facts to start CIRP by giving false information. There is no such case of the Petitioner that it has advanced Rs.9,19,40,000 as principal amount to the Corporate Debtor. By advance of Rs.4,40,000/-, the Petitioner has filed this petition, showing the principal amount of Rs.9,19,40,000/- and has further filed the Affidavit certifying the contents of the Petition. This clearly shows that Petitioner has filed this Petition for initiation of CIRP fraudulently or with malicious intent for any purpose other than for the res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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