9911796707
TMI Blog2020 (10) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... lying with the units of the applicant. The specific case of the applicant is that the Corporate Debtor failed to lift the goods prepared according to the specification which was also inspected by the Inspecting Agency. There must be some evidence before the Liquidator. All necessary documents are to be filed with the Liquidator by the applicant by which the Liquidator would be able to decide the liability of the Corporate Debtor towards the applicant. The Liquidator cannot decide a dispute which is within the jurisdiction of a competent authority. The Liquidator is not an adjudicating authority on any dispute between the applicant and the Corporate Debtor. The Liquidator cannot assess the damages which are within the realm of a civil court against breach of contract. The applicant has not approached any civil court as of now for assessment of damages. When the Liquidator is expressing difficulty to admit the claim of the applicant on the ground of non-production of documents, etc. then the Tribunal cannot direct the Liquidator to admit the claim. The claim of the applicant is in the nature of damages for breach of contract. Therefore, we feel that the Liquidator has not committe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itiation of Corporate Insolvency Resolution Process (CIRP). The Petition was admitted vide Order in CP(IB) No. 111/7/HDB/2017, dated 07.08.2017 and appointed Mr. Savan Godiawala as Liquidator. B. The Applicant alleged that the present Application is to be filed on or before 26.1.2018. Since the Applicant has to come from Chennai, accordingly, there is a delay of 7 days in filing the present Interlocutory Application. C. It is averred the Applicant is engaged in the business of manufacturing and selling of Industrial Valves and related accessory products. The Corporate Debtor/M/s. Lanco Infratech Limited placed a Purchase Order for supply of soft seated ball valves package dated 02.04.2012 for design, engineering, manufacturing, testing at works, transportation of soft seated ball valve package etc. Valves with certain technical specifications on VAAS Automation Private Limited ( VAPL ), which is the pre-merger entity of the Applicant. It is further averred while the Purchase Order was pending for execution; VAPL/the pre-merger entity of the Applicant was taken over by the Applicant/M/s. Bray Controls India Private Limited in November 2014 and became 100% subsidiary of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase order for supply of soft seated ball valves and butterfly valves dated 29.04.2016 amended on 23.12.2016 was issued to the Applicant by the Corporate Debtor. The total value of the amended Purchase Order is ₹ 4,41,22,250/- and the value of the supply of metal seated and soft seated Ball valves package remained at ₹ 3,33,74,248/-. As per clause 3.1 of the scope of supply under the terms and conditions of the amended consolidated purchase order contained a revised Last Date of Supply as All the Materials shall be delivered at site before 30th June 2017. Clause 4 of terms and conditions reads as Delivery Period shall be extended up to 30.06.2017 which shall replace Time Schedule mentioned in Appendix-3 of the SPC. A copy of the amended 'and consolidated Purchase Order dated 23.12.2016 is annexed as Document No. 6 of the paper booklet. H. It is averred despite the Applicant having furnished the Proforma Invoices to the Corporate Debtor towards 60% value of the Valves from time to time on various dates, the same were not paid by the Corporate Debtor. As per the terms of the Contract between the Corporate Debtor and the Applicant, there were about 9 lots of Va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntee 'and further stipulated the Applicant to execute a Letter of Understanding. It is also averred the valves were of custom-built and could never be sold in the market, without any other option, the Applicant executed the Letter of Undertaking in good faith. The Applicant was awaiting the instructions for the dispatch of the valves in exchange for the Original Bank Guarantees. The Corporate Debtor unethically and dishonestly invoked the ABG GT012451 Dated 29.01.2016 for ₹ 1,00,12,274/-. The Applicant incurred huge amounts on the inventory towards direct and other indirect costs to convert them into Valves which were technically appraised and cleared for dispatch by the Corporate Debtor, appointed third-party inspectors, the Applicant had to undergo a totally unwarranted forced legal battle against the Corporate Debtor. L. It is averred to prevent the dishonest attempt by the Corporate Debtor to invoke the ABG, the Applicant filed OA 646 of 2017 before the Hon'ble Madras High Court. Considering the urgency of the matter, the Corporate Debtor delivered the Letter of Invocation of the ABG of ₹ 1,00,12,274/- to the Bank of America, Chennai Branch and was urging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the Hon'ble NCLT, Hyderabad. In the meantime, Hon'ble NCLT, Hyderabad passed an Order on 27.08.2018 in CP(IB)/ 111 /7/HDB/2017 for liquidation of the Corporate Debtor/M/s. Lanco Infratech Limited appointing Resolution Professional to be the Liquidator of the Corporate Debtor. It is averred the Applicant had filed two claims in relation to one for its Chennai Unit and one for its Vadodara Unit within the due dates by e-mail. Q. It is averred the forced Storage Costs on the valves that had to be stored at the respective plants despite having made them ready long ago as per the terms of the contract and non-payment of 60% value of the valves that were ready after 3rd Party Inspector's Clearance for the dispatch. R. It is averred forced Interest Costs on the Amount that was still outstanding on the date of the order of NCLT, Hyderabad all of which should have been paid to the Applicant by the Corporate Debtor then and there on submission of the Proforma Invoices as per the terms of the P.O./L.O.A. S. It is averred the forced Legal Expenses on the Applicant Were necessitated by the fraudulent attempt of the Corporate Debtor which was undoubtedly established by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e liability. W. It is averred the Liquidator failed to consider the basic fact that Invoice for the Sale of Goods shall be made only on the basis of the agreed terms and conditions of the contract. The Applicant cannot be put into so much Financial Loss unjustly just because no invoice was made. The liability of the Corporate Debtor started on the day it received the Proforma Invoices for the Valves that were manufactured and cleared by the 3rd party inspectors as per the terms of the contract of P.O/LOA. This very important fact of the case which was not considered by the Liquidator is not only unfortunate but also it is unjust. X. It is averred the Corporate Debtor had issued a consolidated P.O. wherein the last date of supply was on 30.06.2017 while the Corporate Debtor invoked the Advance Bank Guarantee through a letter dated 23.06.2017 itself speaks glaringly about the intentions of the Corporate Debtor and it would be unjust if the claims of the Applicant are rejected by the Liquidator. Y. It is averred RP had admitted the Proof of Claim submitted by the Applicant's Chennai Unit BVD to the extent of ₹ 13,56,660/- while the Applicant is still not able to app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are denied as false and misconceived, unless specifically admitted herein below as part of the present Reply and unless stated otherwise the present Reply may be treated as denial in seriatim of the entire contents of the Application. iv. It is averred the Respondent/Liquidator acted in accordance with the Insolvency and Bankruptcy Code, 2016 ( Code ) and the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. The provisions of the Code and Liquidation Regulations pertains to the verification and consolidation of claims by the Liquidator are described as under: Section 38. Consolidation of Claims: 1) The Liquidator shall receive or collect the claims of creditors within a period of thirty days from the date of the commencement of the liquidation process . Section 39. Verification of Claims: 1) The Liquidator shall verify the claims submitted under Section 38 within such time as specified by the Board. 2) The Liquidator may require any creditor or the Corporate Debtor or any other person to produce any other document or evidence which he thinks necessary for the purpose of verifying the whole or any part of the claim . Section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bt due from the other party. The only right which the party aggrieved by the breach of the contract has the right to sue for damages. That is not an actionable claim and this position is made amply clear by the amendment in Section 6(e) of the Transfer of Property Act, which provides that a mere right to sue for damages cannot be transferred . viii. It is averred the computation of the amounts claimed by the Applicant is not entirely clear. ix. It is averred the claim form and the documents submitted by the Applicant are duly verified and upon due consideration, the Liquidator has rejected the claim amounts by duly providing the following reasons: a) The Applicant having furnished Proforma Invoices for 60% of the contract value of the valves from time to time and the same were not paid by the Corporate Debtor but as per the records of the Corporate Debtor such proforma invoices were never submitted to the Corporate Debtor. The Applicant has failed to produce the said proforma invoices as part of the Application. It is averred the claimed amounts for the goods which were ready for dispatch cannot be admitted since no invoice or any other document as per the contract has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Corporate Debtor shall automatically be liable to pay the guaranteed amount to the Applicant. The bank guarantee is not yet encashed by the Corporate Debtor. xi. It is averred according to the books of accounts of the Corporate debtor, an amount of ₹ 1,12,09,752/- is owed by the Applicant to the Corporate Debtor. In view of this, the Liquidator is not in a position to return the bank guarantee furnished by the Applicant to the Corporate Debtor. xii. It is averred certain amounts were not admitted by the Liquidator which were admitted by the Resolution Professional during CIRP Process of the Corporate Debtor. During evaluation of claim during liquidation the dues of Chennai Unit and the Vadodara Unit are being considered together since they belong to the same legal entity i.e. the Applicant/Bray Controls India Private Limited on account of merger of VAAS with the Applicant. It is also averred from the books of accounts of the Corporate Debtor, it can be concluded that certain amounts are owed by the Applicant to the Corporate Debtor. Therefore, Liquidator has rejected the claim upon due perusal of the records of the Corporate Debtor and the forms submitted by the Appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he other hand, the Corporate Debtor tried to invoke Bank Guarantee and the applicant moved the Hon'ble Madras High Court and obtained stay order. Subsequently, the application before the Hon'ble Madras High Court in OA No. 646 of 2017 was dismissed. The learned counsel contended that the Liquidator rejected the claim filed by the applicant. Consequently, the Liquidator tried to invoke the Bank Guarantee. The learned counsel contended that it is the Corporate Debtor who committed default for not lifting the valves manufactured by the applicant units. The learned counsel contended that the Liquidator has not carefully considered the evidence filed by the applicant and rejected the claim. This application is filed for a direction to the Liquidator to admit the claim as well as a direction to the Liquidator to return the Bank Guarantee to the applicant and to inform Bank of America that there are no claims of the Corporate Debtor against the ABGs. 6. On the other hand, the learned counsel for the Liquidator strongly contended that the Liquidator has to verify the claims and the Liquidator cannot adjudicate the dispute which may be pending between the Corporate Debtor and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iquidator that such invoices were raised and filed with the Corporate Debtor. 9. It is an admitted case of the applicant that goods were not dispatched to the Corporate Debtor. The goods were allegedly made ready and were lying with the units of the applicant. The specific case of the applicant is that the Corporate Debtor failed to lift the goods prepared according to the specification which was also inspected by the Inspecting Agency. There must be some evidence before the Liquidator. All necessary documents are to be filed with the Liquidator by the applicant by which the Liquidator would be able to decide the liability of the Corporate Debtor towards the applicant. 10. The applicant is contending that there is a breach of contract by the Corporate Debtor. The case of the applicant is that it is the Corporate Debtor, who failed to lift the goods prepared according to Purchase Order/Letter of Award (LoA). It is the case of the applicant that the Corporate Debtor committed breach of contract. If so, the applicant is entitled for damages, Damages to be ascertained by a competent authority or by decree of n civil court so us to become as a debt. A mere claim for damages is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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