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TMI Blog2022 (4) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts which is dated 11.12.2017. The pre-existing dispute which is taken as a defence by the Corporate Debtor should relate to the claim made by the Operational Creditor. The dispute, which is for the first time stated in the reply notice, is only with regard to Mr. M.V. Bhushanam. Even after Mr. M.V. Bhushanam was removed as an Authorised Signatory the liability of the Corporate Debtor is acknowledged. Payments were being made till 16.04.2016. No action was taken with regard to the alleged mismanagement of Mr. M.V. Bhushanam prior to 16.04.2016 and the due amount was also confirmed on 11.12.2017. There is no protest made while acknowledging the said accounts. When no action is initiated in respect of the said mismanagement, projecting the mismanagement as the preexisting dispute, only when a demand is raised by the Operational Creditor, cannot be considered as a pre-existing dispute. When the amount due is not disputed and when it is not disputed that the goods under the invoices were delivered to the Corporate Debtor, the contention that they are lying idle on their site cannot be given weight. Two years have elapsed from the supply of the material till the filing of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thereafter, the Operational Creditor placed orders on the Corporate Debtor for job works. The Corporate Debtor never made payments to the Operational Creditor as per the invoices and made payments only on ad hoc basis. The Operational Creditor issued a demand notice calling upon the Corporate Debtor to discharge the outstanding amount of ₹ 1,93,44,700/-. The Corporate Debtor issued a reply notice stating that there is no due to the Operational Creditor. Hence, this Petition seeking to initiate Corporate Insolvency Resolution Process (CIRP). 3. The Corporate Debtor filed counter raising the following objections: The Company Petition is incomplete and has to be dismissed as the proposed Interim Resolution Professional (IRP) in Form-2 did not enclose the certificates confirming his eligibility. The affidavit as contemplated under Section 9(3)(b) of IBC, 2016 is not filed. The reply notice issued by the Corporate Debtor Company states that the Corporate Debtor is not liable for any amounts and one of the Ex-Directors of Respondent Mr. M.V. Bhushanam is liable for the payments to be made to the Operational Creditor. That there is no debt due to the Operational Creditor and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irman Director and Managing Director respectively and they were delegated powers with respect to running and dealing with all the activities of the Corporate Debtor since beginning. The present operational debt raised by the Operational Creditor pertains to the said period. Mr. M.V. Bhushanam, along with other partners, alienated their shares in favour of New Indian Promoters in MAP Industries Projects LLP which is a joint venture with Union Pipes Industry LLC. Mr. M.V. Bhushanam and his group have submitted resignations to the Corporate Debtor and were accepted. Subsequently Mr. M.V. Bhushanam issued demand notice. Mr. Bhushanam is the one who placed orders on the Operational Creditor. Huge quantities are still lying in the factory as non-movable items. The orders are to favour the Company in which Mr. M.V. Bhushanam is a Director, without considering whether the accessories are actually required or movable. This has resulted in piling up huge material kept in the factory of the Corporate Debtor as non-movable items. In the meeting held on 10.06.2017 at Abu Dhabi, the Board of Corporate Debtor discussed about huge sundry debts extended by Mr. M.V. Bhushanam as he was in-charge o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence to show that disputes existed between the parties. As far as the payment of the present claim amount is concerned, it is against the invoices to be paid by the Corporate Debtor. Minutes of the Board meeting dated 10.06.2017 would establish that the dues with respect to the Operational Creditor were not disputed. The Operational Creditor merely states that the debts extended by the Corporate Debtor and also the payments to be made to the Corporate Debtor and his associates shall be withheld. Subsequent to the meeting dated 10.06.2017, the Corporate Debtor never communicated any reasons for withholding the amount. A mere glance at the Balance Sheets of the Operational Creditor makes it clear that the Corporate Debtor was in profits and Section 197 of Companies Act, 2013 would not be applicable to the Corporate Debtor. The Operational Creditor was only responsible for marketing and development of the Corporate Debtor's Business. The complete operation of the Corporate Debtor was with the Managing Director, Directors and Finance Manager. The Abu Dhabi Management always had control on accepting or rejecting any order. Only upon the approval from the Abu Dhabi Management, the Op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s resulted in piling up huge material in the factory. It is also stated that due to the said reasons the Corporate Debtor has been incurring heavy interest, including penal interest, on the borrowings taken from the Bank for the working capital, on account of non-realization of dues extended by Mr. M.V. Bhushanam. It is further stated that after taking over the charge of the Company by the new Management in the month of June 2017, all efforts are being made by the new management, by infusing additional share capital from the promoters as working capital, to improve the business of the Company, to bring out the Company from loss making into profit making. But it needs further time of one more year to improve its financial status. Saying so it is however stated that the claim made in the demand notice is false and frivolous and is an abuse of process of law made by Mr. M.V. Bhushanam. As can be understood from the reply notice, Mr. M.V. Bhushanam against whom the allegations of mismanagement of the Corporate Debtor are made is one of the Directors of the Operational Creditor and he is a partner of M/s. MAP Industrial Projects LLP, and is a promoter of the Corporate Debtor with 60% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoices pertaining to the supplies are filed and the same are not denied. There is acknowledgment of the debt by way of acknowledging the letter with the subject confirmation of accounts which is dated 11.12.2017. As per the said account statement the credit amount is ₹ 2,24,27,544/-. There is an acknowledgment on the part of the Corporate Debtor by way of signing on the said statement. The said statement is subsequent to the removal of Mr. M.V. Bhushanam as an Authorised Signatory, which clearly implies, if not shows, that the transactions between the Operational Creditor and the Corporate Debtor were not disputed even after Mr. M.V. Bhushanam was removed from the key position of the Corporate Debtor. The pre-existing dispute which is taken as a defence by the Corporate Debtor should relate to the claim made by the Operational Creditor. The dispute, which is for the first time stated in the reply notice, is only with regard to Mr. M.V. Bhushanam. Even after Mr. M.V. Bhushanam was removed as an Authorised Signatory the liability of the Corporate Debtor is acknowledged. Payments were being made till 16.04.2016. No action was taken with regard to the alleged mismanagement o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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