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TMI Blog2022 (5) TMI 658X X X X Extracts X X X X X X X X Extracts X X X X ..... or and Benita Industries Limited and Pushpit Steels Private Limited. On the date of the Supplementary Agreement, an aggregate amount of Rs. 6,93,67,833/- was payable by the Corporate Debtor which includes delivery orders worth Rs. 1,59,11,599/- issued on credit basis. The Corporate Debtor, inspite of the current overdue outstanding, requested the Operational Creditor for further supply of raw materials so as to enable them to clear the earlier dues payable to the Operational Creditor for continuous running of the plant. Post execution of Supplementary Agreement, the Operational Creditor further issued delivery orders on credit basis worth Rs. 2,57,82,682/-, in favour of the Corporate Debtor for supply of raw material. The Corporate Debtor was not able to adhere to their commitments and was not able to make any payments towards the dues payable to Operational Creditor. Despite several reminders, Corporate Debtor failed to adhere to the said commitments. As per the Corporate Debtor's admission in the email dated 28.11.2018, the total amount due is Rs. 5,41,64,471.55/- including interest from 01.11.2018 to 16.03.2019. Since, there is a default in terms of the provisions of IBC, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Corporate Debtor categorically disputed the outstanding amount and made it clear that it is only Rs. 1,18,25,274.86/-. There was no response to the said notice. One more letter was sent by the Corporate Debtor on 05.10.2018 clearly disputing the amounts claimed by the Operational Creditor as incorrect and that the reversal of cheque for Rs. 2,35,425/- which is lying with the Operational Creditor un-deposited has to be considered, after which the dues payable would only be Rs. 1,20,60,663/-. There is no reply even for the aid letter. By concealing all the above facts and instead of reconciling the accounts, by taking advantage of the availability of the blank cheques, the Operational Creditor misused the same by presenting them for clearance, which were dishonoured. A case was filed under Section 138 of the Negotiable Instrument Act and a quash Petition was filed before the High Court of Bombay and is pending. The Pledgor has sent a letter on 23.05.2019 stating that the pledged material was very much available at the Mine site and requested to lift the same to adjust towards the dues if any of the Corporate Debtor in terms of Agreement of Pledge, for which there is no response f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted" and in the rest of the parts of the Petition only Shakti International Private Limited name is mentioned. The contention of the Corporate Debtor that the Operational Creditor should first proceed against the pledged property, clearly establishes that the Corporate Debtor owes money to the Operational Creditor. The admission of the Corporate Debtor that it owes more than Rs. 1,18,25,274.76/- shows that it is more than the threshold amount of Rs. 1 Lakh and the petition is to be admitted on the said admission alone. The Operational Creditor did not receive the letters dated 26.10.2016 and 05.10.2018 and the Corporate Debtor is put to strict proof of the same. The Operational Creditor has a right to pursue its claim against Benita Industries which is independent of its rights against the Corporate Debtor. The Operational Creditor is well within its right to pursue its claims against the Corporate Debtor and the Benita Industries at the same time and these claims are not mutually dependent under law. IBC provides only Corporate Debtor to be made a party to the proceedings and therefore there is no obligation to add Benita Industries as a party. The Operational Creditor has filed p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted that clause 5.2 under the same head specifies that in the event SIPL i.e., the Operational Creditor is unable to realize the security under the Pledge Agreement for any reason attributable to AISL, the pledgor or Pushpit, including but not limited to, obstruction of access to the pledged property, SIPL shall be at liberty to sell all or any part of the stock of raw materials lying in the possession of SIPL, except the remaining Pushpit Iron Ore (if any quantity remains) at the time, in order to realize the indebtedness owed to it under the Back to Back Trade Agreement and this Agreement and remaining Pushpit Iron Ore shall be returned by SIPL to Pushpit, to be dealt with in the manner as Pushpit may deem fit. Whether this part of the Supplementary Agreement would deprive the Operational Creditor of its right to proceed under Section 9 of IBC is what has to be decided now. In support of the contention of the Operational Creditor's Counsel that he would not be so deprived, the Counsel relies on the judgment of the Supreme Court in Infrastructure Leasing & Financial Services Limited Vs. BPL Limited 2015 (3) SCC 363. The Supreme Court extracted Section 176 and 177 of the India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporate Debtor contends that the provisions of Contract Act can be invoked only when there is no contract to the contrary. He construes the Supplementary Agreement as a contract which is contrary to the provisions of the Contract Act, on which a re-look at the relevant clauses under the said Agreement is required. Clauses 5.1 and 5.2 were already discussed. There is nothing in the said clauses which is contrary to the rights of the Pawnee which are given under Section 176 of the Contract Act. The said clauses are only in the form of reiteration of Section 176 of the Contract Act. If there has been a clause under the said Agreement stating that the Operational Creditor shall not invoke the provisions of any law, unless he exhausts the remedy provided under clauses 5.1 and 5.2, perhaps he can be heard to contend that the Operational Creditor cannot invoke the provisions of IBC until he exhausts that remedy. When Section 176 of the Contract Act itself provides for proceeding against the Corporate Debtor irrespective of it invoking the pledge, as is done in this case, his right of invoking the provisions of IBC cannot be curtailed. The judgment of Bombay High Court in State Bank of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I. Whether there is a debt due by the Corporate Debtor to the Operational Creditor and whether the Corporate Debtor has defaulted in discharging the said debt: a. The contention of the Corporate Debtor's Counsel with regard to the debt is that there is a pre-existing dispute and hence, this petition is not maintainable. He relies on the fact that the quantum of the debt is disputed in the letters written to the Operational Creditor and that a case filed under Section 138 of Negotiable Instruments Act is pending. Whether the pendency of the case under Section 138 of the NI Act would amount to pre-existing dispute has to be seen. Counsel for the Operational Creditor submits that the law is settled that the filing of a case under Section 138 of NI Act itself amounts to acknowledgement of debt. The said argument is not refuted by the Counsel for the Corporate Debtor. That apart, the case under Section 138 NI Act is filed by the Operational Creditor on the ground that the cheques which were issued towards discharge of the debt were dishonoured. Dishonor of cheques would not amount to raising a dispute. It would only amount to a default on the part of the debtor. It is not the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orked out in respect of the debit notes raised by the Operational Creditor for rate differences. So also with regard to the transport charges. On 06.05.2019 a letter was addressed to the Corporate Debtor by the Operational Creditor with regard to the presentation of the cheques issued by it. In reply, a letter dated 18.03.2019 was issued by the Operational Creditor, stating that the cheques given were blank and undated and there is no authority for the Operational Creditor to fill them up. A letter dated 23.05.2019 was issued by M/s. Banita Industries Limited calling upon the Operational Creditor to take over the material stock in its Mines site. All this correspondence on one side, an undisputed email sent by the Corporate Debtor on 28.11.2018 shows a clear acknowledgment of total debt of Rs. 4,95,11,476.87/- which is the principal that is claimed in this claim application. However, the above email shows that principal amount was Rs. 2,37,49,667/- as against the contention that it is only Rs. 1 Crore and odd. The law is well settled that the Adjudicating Authority has to admit the application once it is found that the admitted debt due is beyond the threshold limit which in this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Process (CIRP) against the Corporate Debtor. The Operational Creditor suggest Mr. Koteswara Rao as Insolvency Resolution Professional (IRP) and sought the Tribunal to appoint an IRP. Hence, Mr. Koteswara Rao Gutta, (Registration No. IBBI/IPA-003/IP-N000129/2017-2018/11455) as Insolvency Resolution Professional (IRP). ORDER The Company Petition is admitted. The Corporate Insolvency Resolution Process of the Corporate Debtor shall commence from this date and shall be completed within 180 days hence. i. Mr. Koteswara Rao Gutta, (Registration No. IBBI/IPA-003/IP-N000129/2017-2018/11455), having office at Plot No. H-70, Madhura Nagar, SR Nagar (Post), Hyderabad, West Marredpally, Telangana-500038; e-mail:[email protected]; Mobile: 9849536064, is appointed as the Interim Resolution Professional. No disciplinary proceeding is pending against him as per the IBBI website. ii. He is directed to take charge of the Corporate Debtor's management forthwith and take necessary steps in furtherance of the CIRP in terms of Sections 13(2), 15, 17, 18 and 20 of Code and Rules made thereunder. iii. Moratorium in respect of the Corporate Debtor is hereby declared in terms of Section 14 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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