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TMI Blog2019 (10) TMI 820X X X X Extracts X X X X X X X X Extracts X X X X ..... - - Dated:- 24-7-2019 - DR. DEEPTI MUKESH HON BLE MEMBER (JUDICIAL) AND SHRI PRADEEP R. SETHI, HON BLE MEMBER (TECHNICAL) For The Applicant : Mr. Shantanu, Adv., Ms. Shweta Bhatti, Adv. And Ms. Sukriti R. Kapoor, Adv. For The Respondent : Mr. U. K. Choudhary, Senior Adv., Mr. Dhruv Gupta, Adv., Mr. Sarwan Rajan, Adv. And Mr. Akshay Srivastava, Adv. ORDER SH. PRADEEP R. SETHI, MEMBER (T) 1. The present application under Section 9 of the Insolvency Bankruptcy Code, 2016 Code read with Rule 6 of the Insolvency Bankruptcy Code (Application to Adjudicating Authority) Rules, 2016 (Rules) is filed by Counfreedise (for brevity Applicant ) for initiating Corporate Insolvency Resolution Process against Timex India Group Limited (for brevity Respondent ). The application is signed by Shri Abhinandan Authorised Signatory. The letter of authorization in favour of Shri Abhinandan. M is given by the partners of the firm M/s. Counfreedise (Annexure A-2 of the application). 2. The master data of the respondent (CIN_L33301DL1988PLC033434) is at annexure A-1 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ween the parties and rather make evasive contentions denying to make payment to the applicant. It is stated that the applicant vide communication dated 02.11.2017, confronted the respondent with the falsity of the response dated 14.10.2017 and that thereafter, the respondent further sent its response dated 22.11.2017making irrelevant contentions on the pretext of suit filed by respondent alleging selling of fabricated watches of Timex Make and alleged contempt proceedings. The date from which the debt fell due is stated to be 31.3.2017. 7. In Part III of the application, particulars of proposed Interim Resolution Profession have not been given. 8. Vide order dated 10.01.2018 notice of the petition was directed to be issued and the learned counsel for the respondent has accepted the notice. The reply was filed by Diary No. 641 dated 06.02.2018 denying and refusing to pay in to the demand of alleged operational debt of ₹ 12,73,235/-. It is stated that there is no contractual agreement and or acknowledgement whether express or implied to pay the alleged debts and that the demand notice dated 04.10.2017 itself and present petition is a counter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t some time goods were supplied to the applicant through NVR Marketing and that in any case, the instant operational debt arises on account of transactions between the applicant and the respondent, which were transacted many times earlier also and in relation to the same the respondent duly acknowledged its obligations to pay back the agreed percentage of discount to the applicant. It is submitted while the respondents duly issued credit notes in favour of the applicant in relation to earlier transactions, it dishonestly withheld issuing the same in relation to the present transactions whereby the operational debt has arisen. It is stated that the operational debt was duly communicated to the respondent at the time of it s becoming due and there is no contemporaneous document/correspondence where by the respondent had in any manner disputed its obligations to make payment of the said operational debt and that the alleged claim of ₹ 4,80,615/- against the applicant is not only as a counter-blast, but rather as a afterthought. 11. CA No. 50/2019 was filed by the respondent for dismissal of the application on the ground that the applicant had sent the Demand no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the arguments, the learned Senior counsel for the respondent relied on the order dated 22.04.2019 of Hon ble National Company Law Appellate Tribunal in Company Appeal (AT) (Ins) No. 223/2019 Roma Infrastructure India Private Limited Vs. A. S. Iron Steel (I) Private Limited. It was pleaded that it was held by the Hon ble National Company Law Appellate Tribunal that admittedly the appellant/Roma Infrastructures India Private Limited has not supplied the goods nor provided any services to the respondent-A. S. Iron Steel (I) Private Limited and it had advanced payment of ₹ 74,32,326/- to the respondent for supply of goods and the payment cannot be treated to be an Operational Debt . It has been pleaded that a similar view is taken in order dated 30.11.2018 of the Hon ble National Company Law Tribunal, Mumbai Bench in CP- 21/I BP/NCLT/MAH/2018 Tata Chemicals Limited Vs. Raj Process Equipments and Systems Private Limited . It was pleaded that the claim made in the present application cannot be treated as an operational debt and the application under Section 9 was not maintainable. 16. In response thereof, the learned counsel for the applicant has pleaded th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. In rejoinder, the learned counsel for the applicant relied on the order dated 21.09.2018 of the Hon ble National Company Law Appellate Tribunal in Company Appeal (AT) (Insolvency) No. 582/2018 in the matter of Overseas Infrastructure Alliance (India) Pvt. Ltd. Vs. Kay Bouvet Engineering Limited . It was pleaded that it was held there in that advance of 10% of the contract value to the sub-contractor as advance payment was a claim in respect of provision of goods or services bringing him within the definition of Operational Creditor . It was pleaded that there was no pre-existing dispute and that the reply to the demand notice did not make any reference to any such preexisting dispute. It was stated that for the calendar year 2014 discount was given and received by the applicant. It was submitted that as regards the discount of ₹ 5,98,319/-, the same was reversed on a much later date of 18.01.2018. 19. We have carefully considered the submissions of the learned counsel for the applicant and the learned senior counsel for the respondent and also perused the record. The present application is filed under Section 9 of the Code and such application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal. 23. We may add that we have observed above that the applicant s submission is that the amount due from the respondent as on 31.03.2017 includes outstanding in respect of credit notes and return of watches. The credit notes would go to reduce the purchase price of the Timex Watches by the applicant. Therefore, the claim of Operational Debt in respect of credit notes cannot be said to be a claim in respect of provision of goods, since the goods are already received and only their purchase price would get reduced by the credit notes, if any. Similarly, the debit note raised by the applicant is in respect of the return of watches. The purchases are therefore sought to be returned by the applicant. There is no provision of goods involved in the purchase return. 24. We therefore hold that the applicant has not proved that an operational debt is owed to it and that it is an operational creditor. Therefore, the application under Section 9 of the Code filed for initiating CIRP against Timex India Group Limited is rejected. In view of this finding, the compliance of the other requirements of Section 9 of the Code are not being further examined. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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