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TMI Blog2021 (6) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... materials which belonged to the petitioner, is in complete breach and violation of the agreement and has deprived the petitioner of its legitimate rights over the stock of raw material. The respondent with such actions have, therefore, committed willful default of the agreement. The petitioner miserably failed to give a proper calculation/computation of the amount claimed as a debt due from the respondent. The invoices were raised by third party vendors in favour of the petitioner. The petitioner has not raised any invoice against the respondent. In this view of the matter, we are of the considered view that the petitioner failed to establish the relationship of an operational creditor and corporate debtor between the petitioner and respondent and also failed to prove any ascertained and established debt either in respect of any services rendered or goods supplied to the respondent or for any breach of trust or terms of agreements. Hence, the issue is answered in the negative. Petition dismissed. - IA No. 123/2020 and CP (IB) No. 173/Chd/CHD/2018 - - - Dated:- 16-6-2021 - Ajay Kumar Vatsavayi, Member (J) And Raghu Nayyar, Member (T) For the Appellant : Anand Chhibbar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent) and with an obligation to adhere to the terms and conditions agreed to in the Agreement. Also, in terms of Clause 3.16 of the Agreement, it is stated that the operational creditor provided the corporate debtor with the raw materials for the manufacture and packing of the products under this Agreement. 5. It is contended that the corporate debtor has failed to fulfill its obligation in as much as in failing to supply/deliver the intermediate products to the operational creditor, which were further supposed to be processed/manufactured in order to have a final product ready by the operational creditor, despite repeated requests and reminders by the operational creditor. 6. The operational creditor has stated to conduct a physical verification on the premises of the corporate debtor in July 2017 and learned about the missing stock of raw material from the corporate debtor's site and it is alleged that the corporate debtor has wrongly misappropriated the raw materials, which belonged to the operational creditor, in breach and violation of the Agreement and has illegally deprived the Operational Creditor of its legitimate rights over the stock of raw material and hence, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. Notice of the petition was directed to be issued to the corporate debtor on 19.02.2019 as to why this petition be not admitted. 14. The corporate debtor in its reply/written statement has stated that the present petition is filed by Mr. Narinder Kumar Ahuja, in respect of whom there is no Board Resolution passed by the Operational Creditor and instead the petition is only accompanied with specific Power of Attorney in favour of Mr. Ahuja and the same is not permissible under the provisions of the Companies Act, 2013. 15. It is submitted that the nature of agreement between the parties was of a Bailor- Bailee relationship for which the goods were supplied for further processing and the Corporate Debtor was to be paid for the same. It is contended that therefore, there is no operational debt as there was no sale price, no sale, invoice and no provision of goods and there is no crystallized debt. 16. It is also stated that the claim, which is denied is hopelessly time barred and the present proceedings have been filed seeking joinder of several transactions and the alleged dues on the same. It is stated that each transaction between the parties was an individual transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ending demands of the respondents. It is also submitted that the entirety of a dispute is a pending one and the respondents are already in the process of filing a petition for appointment of the arbitrator. It is also submitted that the demand notice (Annexure-H) states that the date of default is the same date on which the raw material was allegedly supplied to the Corporate Debtor and refers to Annexure 5 which is the same as Annexure F, i.e. the Physical Verification Reports which does not bear a single date. 20. It is also contended that the alleged Cheque of ₹ 25,00,000 was given as security on account of the contract as is evident out of email dated 11.03.2016 (Annexure R-5 in CA No. 123 of 2020) and an alleged invocation of the security cheque does not give any right to the operational creditor to initiate IBC proceedings. It is also mentioned that in the complaint filed under Negotiable Instruments Act (Page 99 of the Reply), the said amount is shown as money paid towards goods which is misleading. 21. The petitioner in its written submission has stated that the claim as mentioned in Part IV of Form 5 is based on the loss payable due to misappropriation, loss an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which no reply has been filed. Further in response to the present application, the Corporate Debtor has stated that it has issued a notice for invocation of arbitration as per the Arbitration Clause on May, 2019 whereas the demand notice under Section 8 of the Code was issued in November, 2017 and the present petition was filed in May, 2018. Thus, the invocation of arbitration clause is much after filing of the present petition. 25. In the above referred factual matrix and the submissions made, the following question emerge for our consideration:- Whether the petitioner is the operational creditor of the corporate debtor and if so whether there was any debt and default? 26. The relevant provisions of the Code read as under:- Section 3(11) debt means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt; Section 3(12) default means non-payment of debt when whole or any part or installment of the amount of debt has become due and payable and is not [paid] by the debtor or the corporate debtor, as the case may be; xx xx Section 5(20) operational creditor means a person to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of use of TECHNOLOGY, method and process of manufacturing, processing and packing of the PRODUCT , the raw materials, ingredients and other material used or intended to be used by ALLYCHEM in relation to manufacture and packing of the PRODUCT , and to do physical verification of such raw materials and inspect the accounts and records maintained by ALLYCHEM in this regard. ALLYCHEM shall, to the satisfaction of RANBAXY, rectify and indemnify against any deficiencies identified during the course of any audit by RANBAXY. xx xx 8.6 ALLYCHEM shall within 15 days of the signing of this Agreement provide a Bank Guarantee for an amount of ₹ 1 Crore to secure its obligations under this Agreement. 8.7 ALLYCHEM further authorizes RANBAXY to (i) deduct/adjust against conversion/job charges payable to ALLYCHEM by RANBAXY and/or (ii) enforce Bank Guarantee, at the sole discretion of RANBAXY, to recover any liability of ALLYCHEM under this Agreement. xx xx 13.4 The expiration or termination of this Agreement for any reason shall not operate to relieve either party from its responsibilities to fulfill any obligation under this Agreement which shall have accrued t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement. In addition to the said non-performance of the supply of the product to the petitioner, the respondent continued the breach of the terms of the agreement. Accordingly, the petitioner claimed an amount of ₹ 4,50,40,493.98/- from the respondent. According to the petitioner the debt fell due on the date when various raw materials was supplied to the respondent vide Annexure E and the same were found short vide Annexure F. As rightly pointed out by the learned counsel for the respondent neither in Form 5 nor in any of the documents/annexures/enclosures to the CP or to the rejoinder, the petitioner stated how the amount of ₹ 4,50,40,493.98 is arrived at. It is also not coming forth from the pleadings of the CP that whether the entire amount is with regard to the shortage of the stocks supplied by the petitioner to the respondent or by way of quantifying the damages for breach of the terms of the Annexure B Agreement. The petitioner miserably failed to give a proper calculation/computation of the amount claimed as a debt due from the respondent. The invoices were raised by third party vendors in favour of the petitioner. The petitioner has not raised any invoice ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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