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TMI Blog2020 (10) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... reditor by the Company Director of Corporate Debtor in the month of June. 2018 and it was decided that demurrage of 30% of the total invoice amount i.e. ₹ 2,48.952/- from the principal amount but Operational Creditor no-where in the main application mentioned about this fact that when the dispute regarding the quality of goods raised by the Corporate Debtor then it was agreed to deduct 30 per cent of the total invoice amount i.e. ₹ 2,48,952/-, therefore, we are of the considered view that although no reply has been filed by the Corporate Debtor but in reply to the demand notice. Corporate Debtor has raised the issue of quality of goods. There is difference between the Financial Debt and Operational Debt. Operational Debt means a claim in respect of the provisions of goods or services including employment or a debt in respect of the dues arising under any law for the time being in force comes under the definition of operational debt whereas the Financial debt means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes and the other conditions mentioned at Section 5(8)(a to i) - Now it is the settled p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le, 2016 by the Applicant/operational creditor, i.e. Shitla Papers Pvt. Ltd. for initiation of Corporate Insolvency Resolution Process against the Respondent/Corporate Debtor Company Superior Industrial Enterprises Ltd. . 2. The Operational Creditor is engaged and dealing in the supply of all kinds of paper for packaging other packaging Materials and mainly operates in the business of supply of Kraft Paper, Semi-Kraft, Duplex Paper, Paper Boards Stitching Wires. 3. The Corporate Debtor is a public limited company and started the manufacturing of corrugated boxes in 2009 is one of the leading manufacturer of corrugated boxes in India. 4. Brief facts of the case are as follows: i. From June, 2017, the Operational Creditor had entered into a business relation with the Corporate Debtor. ii. The Operational Creditor in view of the purchase order supplied the ordered goods, material, paper material etc. as and whenever required by the corporate debtor from June 2017 till June 2018. iii. The corporate debtor started placing orders for the supply of Kraft papers, after settling upon terms and conditions and further negotiations upon the rates, qualities and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 999/-. xv. Several email communications from 17.08.2018 till 01.01.2019 were exchanged between operational creditor and corporate debtor confirming the operational transactions. xvi. The operational creditor send reminder via email dated 18.01.2019 to the corporate debtor for the payment of outstanding dues. xvii. The total outstanding amount against the unclear bills/invoices as stated in the reminder stood at ₹ 20,64,091/-. The corporate debtor made a part payment on 22.01.2019 of an amount of ₹ 4,27,405/- in lieu of the pending invoices/bills. xviii. The corporate debtor acknowledged the amount of ₹ 16,36,686/- was outstanding vide an email dated 31.01.2019 sent to the operational creditor in respect of the clearance of the dues related to their business transactions. xix. The last payment received by operational creditor from the corporate debtor in respect of pending invoices was on 26.02.2019. xx. After making the part payments out of the total outstanding bill amount, as on 26.02.2019 by the corporate debtor, a principal amount of ₹ 8,04,540/- is still outstanding till 30.05.2019 along with interest and penalties accrued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Corporate Debtor on 18.02.2020 had deposited the demand draft of ₹ 8,04,540/- before the Registrar, NCLT and the case was adjourned to 03.03.2020 and on 03.03.2020 matter was heard and both the parties were directed to file written submissions. In the background of these facts, we would like to consider the submissions of parties. 6. We have heard the Ld. Counsel for petitioner as well as Corporate Debtor and perused the averment made in the application as well as documents enclosed by the parties. 7. Ld. Counsel appearing for Operational Creditor has raised all the facts mentioned in the application and he further submitted that there is a default of payment of ₹ 8,04,540/- as a principal amount and along with interest of ₹ 6,28,134/- as on 31.03.2019. 8. He further submitted that during the Financial Year 2016-17 and particularly from June-July 2017 to 26.02.2019, the Operational Creditor had supplied the ordered materials, goods to the Corporate Debtor under their acknowledgment and thereafter the Corporate Debtor utilized the same in its business activities without any objection or dissatisfaction for long tenure. He further submitted that after sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and however, on the request, they agreed to utilized the same subject to standard demurrage of 30 % of the total invoice amount i.e. ₹ 2,48,9552/- from the principal amount. He further submitted that he has already deposited the demand draft of ₹ 8.04.540/- before the Registrar, NCLT and in view of Section 5(21) of the IBC like financial debt, operational debt does not include the interest, therefore, petitioner is not entitled to get the interest and Operational Creditor cannot claim the interest as a defaulted amount. 10. Now, in the light of the submissions raised on behalf of parties, we have again gone through the averments made in the application as well as documents enclosed with the application as well as written submissions filed on behalf of operational creditor and we find that it is admitted fact that the Corporate Debtor has not filed the reply to the application filed by the Operational Creditor but Corporate Debtor sent the reply to the demand notice, which Operational Creditor has enclosed at page 74 of the paper book and we have gone through the reply to the demand notice and we find that it is specifically mentioned in para 6 of the reply to the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay be prescribed; (e) receivables sold or discounted other than any receivables sold on nonrecourse basis; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; 2[Explanation. -For the purposes of this sub-clause,- (i) any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing; and (ii) the expressions, allottee and real estate project shall have the meanings respectively assigned to them in clauses (d) and (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);] (g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account; (h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institution; (i) the amount of any liability in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Hon'ble Delhi High Court in CS(OS) 1849/2015 decided on 30.05.2017 in the case of Vatech Global Co. Ltd. Vs. Unicorn Denmart Ltd. Ors. and also the decision of Mumbai Bench, NCLT in CP No. 45/1 BP/NCLT/MAH/2017 decided on 10.04.2017 in the case of M/s. DF Deutsche Forfait AG and Anr. Vs. M/s. Uttam Galva Steel Ltd. and we find that so far the decision of Hon'ble Delhi High Court in CS(OS) 1849/2015 decided on 30.05.2017 in the case of Vatech Global Co. Ltd. Vs. Unicorn Denmart Ltd. Ors. is concerned in that decision Section 5(21) of the IBC was not discussed, therefore, in our considered view, the facts of Hon'ble Delhi High Court decision is different from the facts of the case in hand, that would not help to Operational Creditor to substantiate its claim and so far the decision of Mumbai Bench, NCLT in CP No. 45/1 BP/NCLT/MAH/2017 decided on 10.04.2017 in the case of M/s. DF Deutsche Forfait AG and Anr. Vs. M/s. Uttam Galva Steel Ltd. is concerned. We have carefully gone through that decision and we find that in para 76, of the order, the matter was discussed by the NCLT, Mumbai Bench and it is mentioned in that order that when we see the basis differenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . When we shall consider the decision of Hon'ble Mumbai Bench. NCLT in the light of aforesaid decision, then we find that NCLT, Mumbai Bench is not referred the decision of Hon'ble Supreme Court in the case of Natha Devi Vs. Radha Rani Gupta 2005 (2) SCC 271 at the time of discussing the difference between the Financial Debt and Operational Debt and also not considered the intention of legislature while passing the order. As we have already referred the decision of Hon'ble Supreme Court in which Hon'ble Supreme Court held that courts always presume that the legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute should have effect. A construction which attributes redundancy to the legislature will not be accepted except for compelling reasons such as obvious drafting errors. 20. In the light of that decision when we shall consider the decision of NCLT Mumbai Bench and the case in hand then We are of the considered view that there is no drafting error in section 5(21). while defining the Operational debt rather the legislature clearly omit the word interest in the definition of operational debt for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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