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TMI Blog2020 (3) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... ently corporate insolvency resolution process is initiated - the application stands admitted in terms of section 9(5) of the IBC, 2016 and the moratorium shall come in to effect as of this date. - C. P. No. 1302 /IB/ 2018. - - - Dated:- 4-12-2019 - R. Varadharajan Judicial Member and Anil Kumar (B.) Technical Member For the Corporate Debtor : R. Vidhya Shankar , for the operational creditor. M. V. Swaroop ORDER ANIL KUMAR (B.) (TECHNICAL MEMBER). - 1. This application has been filed by one J. Sridhar, sole proprietor of M/s. Loyal Enterprises (hereinafter referred to as operational creditor ) against M/s. Chennai City Football Club P. Ltd. (hereinafter referred to as corporate debtor ) under section 9 of the Insolvency and Bankruptcy Code, 2016 ( I and B Code 2016 ) read with rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as AAA Rules ). The applicant seeks to initiate the corporate insolvency resolution process against the corporate debtor, declare moratorium and appoint interim resolution professional. 2. Part-I of the application sets out about the operational creditor from whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r ₹ 1,13,13,434. (ii) Invoice No. 1118, dated May 9, 2018 for ₹ 13,19,687. (iii) Invoice No. 1120, dated May 9, 2018 for ₹ 9,19,492. 8. It is seen that the operational creditor has issued demand notice in Form 3 under the Insolvency and Bankruptcy Code, 2016 on September 10, 2018 sent on September 10, 2018 and delivered on September 14, 2018 to the corporate debtor to the address as given in the said notice. 9. The operational creditor has further submitted that the debt arose on account of a purchase order dated November 7, 2017 issued by the corporate debtor on the operational creditor for the sale and supply of Hi-Mast sporting floodlight and revamping of existing flood lights and supply of accessories at Jawaharlal Nehru Stadium, Coimbatore and connected work. (A single page letter purported to be the purchase order issued by the corporate debtor is placed on page 18, dated November 7, 2017). 10. The operational creditor further submitted that the amount is found due and payable vide Invoice No. 1112, dated May 7, 2018 for ₹ 1,13,13,434, Invoice No. 1119, dated May 9, 2018 for ₹ 13,19,687, Invoice No. 1120 dated May 9, 2018 for ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter-cum-purchase order dated November 8, 2017 was issued by the respondent who confirmed the quote and issued the EPC contract to the applicant and the deadline, as agreed between the parties, was December 15, 2017. (c) The respondent further stated that even if it is considered that the deadline was six weeks from the date of the purchase order, the contract had to be completed by the applicant on December 27, 2017. (d) It is submitted that the floodlights were ready and functional only on March 2, 2018 which was the date of the last home match of the Club for the 2017-18 I-League. This meant that for the 8 home matches of the 2017-18 season of the I-League, the floodlights were not functioning with the LUX capacity required for live TV transmission, which was a mandatory condition as per the rules of the I-League. (e) The respondent's major source of revenue is sponsorships. It is well-known that when sponsors were given TV coverage, the value of the sponsorship slots and the interest that is shown from the prospective sponsors is much higher. The reason for the same is obvious-when there is live TV coverage, the sponsor gets much wider reach for its brand all ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r we request you to try to complete the necessary EPC on or before December 15, 2017. Further we would be able to pay on the following terms : 1. 20 per cent. advance on confirmation of the order. 2. 30 per cent. on completion of foundation works. 3. 40 per cent. on supply of materials. 4. 10 per cent. on completion of the turnkey and delivery. We look forward to your support in completion of the project on time and in the best manner. 17. The one page contract as above does not contain any other stipulation except that of timelines incompletion and pattern of payment of consideration to the operational creditor. On a scrutiny of the ledger account in the name of Chennai City Football Club LLP appearing in the books of the operational creditor a sum of ₹ 38,00,000 is seen to have been received on February 2, 2018 as the first payment, after which the project is said to have been completed within 6 to 8 weeks time. 18. In the counter filed by the corporate debtor it is alleged that there is delay in completion of the work which is directly attributable to the applicant's failure to adhere to the timelines mentioned in the contract. It is noted that si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluding any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002) ; (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the respondent. 20. However, during the pendency of the moratorium period in terms of section 14(2) and (3) as extracted here-under : (2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period. (3) The provisions of sub-section (1) shall not apply to such trans actions as may be notified by the Central Government in consultation with any financial sector regulator. 21. The duration of the period of moratorium shall be as provided in section 14(4) of the Code and for ready reference reproduced as follows : (4) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process : Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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