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TMI Blog2020 (9) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... ny merit or substance. - I.A. (IB) Nos. 611 and 620/KB/2020 in C.P. (IB) No. 1214/KB/2018 - - - Dated:- 21-8-2020 - Jinan K.R., Member (J) And Harish Chander Suri, Member (T) For the Appellant/Respondent: Jishnu Chowdhury, Noelle Benerjee, Dipak Dey, Yash Vardhan Deora, Sabyasachi Chaudhury, Nikita Jhunjhunwala, Orijit Chatterjee, Swati Dalmia and Puspal Chakraborty, Advocates ORDER HARISH CHANDER SURI, MEMBER (T) 1. Two I.As., One I.A.(IB) No. 611/KB/2020 filed by M/s. MSTC Limited under section 60(5) of the Insolvency and Bankruptcy Code, 2016 read with Rule 11 of National Company Law Tribunal Rules, 2016, seeking grant of leave to conduct auction and to have access to the Plant of the respondent No. 1 at Jajpur, Odisha and for inspection and for removal of the said goods upon completion of sale through e-auction/tender to be conducted by the applicant. Another I.A. (IB) No. 620/KB/2020 filed by Mr. Supriyo Kumar Chaudhuri, Resolution Professional of the Corporate Debtor under section 14(2) and section 60 of the Insolvency Bankruptcy Code, 2016, seeking orders of injunction be passed restraining the Respondents from disconnecting the electricity supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said suit in the Hon'ble High Court. An ex parte order dated 17th February, 2020 was passed by the Hon'ble High Court at Calcutta, in terms whereof, a Special Officer was appointed for the purpose of inventorisation of the pledged goods, which belong to the applicant. However, on the applicant coming to learn of the admission of the present proceedings being CP(IB) No. 1214/KB/2018 (State Bank of India -vs-Rohit Ferro Tech Limited) made on 7th February, 2020 by this Hon'ble Tribunal, the matter was mentioned and the matter was ultimately withdrawn. The cause of action for the applicant in obtaining an order of Special Officer to make inventory was that there had been unauthorized removal of the pledged goods in an unabated manner from the Jajpur Plant of the Respondent No. 1. In fact, the Corporate Debtor and its promoters, the Respondent Nos. 1 to 5 are responsible for the unauthorized removal of the pledged goods, causing huge financial losses to the applicant. It is submitted that the applicant repeatedly requested the Respondents to prevent unauthorized removal of the pledged goods immediately and holding the respondent No. 1 liable for the losses caused thereby t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds unless caused by your own wilful negligence in case of any shortfall and we shall remain responsible to pay for the same to you with interest of the aforesaid rate . 6. The applicant has prayed that directions be issued to Respondent No. 5 to allow inspection of the goods at the Jajpur plant of the Respondent No. 1 to the applicant's bidders and permit removal of the pledged goods by the successful bidders upon necessary instructions being issued by the applicant and the applicant may be allowed to deploy the guards for the protection of the applicant's goods at the Jajpur plant of the Respondent No. 1. 7. During the course of arguments, the applicant submitted that the Corporate Debtor required chrome ore and thus entered into agreements with the applicant between 2010 and 2018. The applicant procured chrome ore and kept the same at Corporate Debtor's factory. The Corporate Debtor would pay the applicant and used the goods. From procurement and until the time the goods were made over to the applicant for use the same would remain pledged. If Corporate Debtor did not pay, the plaintiff was entitled to sell the goods, under the pledge documents. There is a custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that goods worth more than ₹ 40 crores had been removed and even thereafter the goods have been removed. Part of the goods had been removed even prior to the order of CIRP. 10. The learned counsel claimed that the right of the applicant to sell the goods even during the CIRP, is established from the contents of the agreements, and the same is binding on the R.P. and everybody concerned. It is argued that it is the duty of the RP to take pro-active steps and protect the goods. The learned counsel further argued that the goods are not in the custody of the Corporate Debtor (CD) although they are lying in the premises of the CD. According to him, it is not the asset of the CD. 11. Ld. Counsel also referred to page 93 of the application, which is a letter written by the applicant to the Corporate Debtor on June 10, 2020, which is reproduced hereunder:- Please refer to the trailing mail just now received from MSTC's Custodian, M/s. CRWC. They have intimated that materials pledged in favour of MSTC has again been unauthorisedly removed and lifted from heap No. 10 at Rohit Ferro Tech Limited plant at Jajpur and has been replaced by mere Ash to camouflage the lif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Plant on 10-02-2020. Inventory was prepared on 26-02-2020. The same goods were brought to the notice of the Hon'ble High Court in a suit and not two separate goods and the same goods have been brought before this Adjudicating Authority. Again they are coming here and asking for protection and sale of the security which cannot be done. 16. Mr. Sabyasachi Chaudhary, learned counsel for the suspended Board of Directors submitted that the order of admission of the petition was passed on 7th February, 2020 and the inventory is stated to have been prepared for the first time on 26 the February, 2020, all the allegations made in the present application are post-CIRP process. It is submitted that the payment was to be paid within 180 days from arrival of the goods, and that the contract were entered into 2018-19. It is stated that there is a custodian who is in-charge-of the goods and it is in the close factory premises. It is submitted that there is nothing to show that what was the quantity prior to the CIRP order, or even before 26th of February, 2020 which the inventory was prepared. It is submitted by the learned counsel that the erstwhile promoter has nothing to do with it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Growth Centre of WBIIDC (West Bengal Industrial Infrastructure Development Corporation) located at Dwarika, Bankura District, West Bengal. The Bishnupur plant is spread over about 28 acres of leasehold land. The plant has two divisions, namely, ferro alloy division (FAP) and stainless-steel plant (SSP). The FAP division has two 7.5 MVA submerged electric arc furnace and three 9MVA submerged electric arc furnace along with a briquetting plant, raw material handling system, and material recovery system. The FAP division is mainly engaged in manufacturing high carbon ferro chrome, HC ferro manganese, HC sillo manganese and ferro silico. The SSP division has 2 x 15T induction furnace, AOD Converter-1 x 35T, Billet Caster (6/11)-1x2 strand, rolling mill with single drives-1 x 18TPH, LRF-1 x 35T in operating condition. At the SSP division, the Corporate Debtor also interchangeably manufactures Mild Steel Billets. Just prior to the lockdown being imposed by the government due to the pandemic (Covid - 19) the plant had been operating at an average of 7,500 Metric Tonnes capacity. The plant has been operating in 3 (three) shifts of 8 (eight) hours each with total on-roll manpower (employe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a notice bearing No. C/BC/BAN/39/3591 dated 17th March, 2020 to the corporate debtor thereby giving a further time period of fifteen clear days to make payment of the outstanding amount of ₹ 7,71,94,553/- (which includes outstanding pre-CIRP dues for the months of December, 2019 and January, 2020 amounting to ₹ 4,90,14,590.32/-) under section 56(1) of the Electricity Act, 2003 failing which the power supply at the premises would be liable for disconnection without issue of further notice. 22. The Applicant states that considering the impact of the pandemic (Covid -19) the Government of India imposed a lock down in the country with effect from 25th March, 2020 and in compliance thereto the Bishnupur plant of the corporate debtor was completely shut down. All operations of the corporate debtor at the Bishnupur plant came to a complete standstill which led to further worsening of its financial position and resulted in acute liquidity crunch during this unprecedented lock down period. In the meantime, the Respondent Nos. 4 and 5 raised another invoice bearing No. 635000093078 dated 4th April, 2020 for the month of March, 2020 amounting to ₹ 10,40,84,356/- includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod prior to CIRP and during CIRP has not been provided despite several requests having been made to the Respondents in this regard. The aforesaid amount claimed by the Respondents, includes an amount of ₹ 4,90,14,590.32/- relating to the months of December, 2019 and January, 2020 (i.e., prior to the CIRP period). Furthermore, the aforesaid amount also includes dues relating to the period 1st February, 2020 to 6th February, 2020 which cannot be ascertained by the Applicant. 24. The Applicant submits that despite facing acute liquidity crises which further got aggravated due to the lockdown imposed by the government on account of pandemic (Covid 19) on 15th May, 2020, the Applicant caused the corporate debtor to make payment of ₹ 50,00,000/- (Rupees Fifty Lakhs Only). The Applicant submits that considering the part payment of ₹ 50,00,000/- made by the corporate debtor to the Respondent No. 1 on 15th May, 2020, the current outstanding amount payable to the Respondent No. 1 is ₹ 10,47,93,143/- [₹ 10,97,93,143/- (minus) ₹ 50,00,000/-] less the dues pertaining to the pre-CIRP period. The Applicant states that the dues in relation to the period pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of allowing any waiver of charges because it is being done as per the Agreement signed by the Company with the Distribution Company, the terms whereof had been settled at the time of entering into the Agreement. 27. We have heard the parties present through their respective counsel and have gone through the application and the annexures. We have also seen the defence note filed by WBSEDC. We are convinced that the waiver of charges cannot be allowed to the Company undergoing CIRP. It is correct that the surcharge amount levied on non-payment/delayed payments relating to the period prior to the CIRP order, cannot be allowed to be included in the Bills relating to the period after the order of CIRP. 28. In view of the aforesaid discussion of facts and documents placed on record, we are thus passing the following directions:- (a) We allow the payment of all the arrears of electricity bills post CIRP order, to be paid in 3 (Three) equal monthly instalments; (b) All the bills relating to current consumption charges to be raised by the Distribution Company from time to time, shall be paid regularly; (c) In case there is any default or failure on the part of the Company u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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