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TMI Blog2022 (5) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution Process against the Corporate Debtor, is hereby admitted - moratorium declared. - C. P. (IB) No. 1540/KB/2019 and IA (IBC)/1671/KB/2019 - - - Dated:- 6-5-2022 - Rohit Kapoor, Member (J) And Harish Chander Suri, Member (T) For the Appellant : Shiv Shankar Banerjee, Arik Banerjee and Arijita Ghosh, Advs For the Respondents : Jishnu Chowdhury, Saunak Mitra, Rashhmi Singhee, Shubhangini Singh and A.K. Singh, Advs ORDER Harish Chander Suri, Member (T) 1. The Court is convened by video conference today. 2. This petition under 9 of the Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 has been filed by Jai Kishore Gupta, proprietor of M/s. Lalta Prasad Shaw (hereinafter referred as the Operational Creditor), seeking initiation of corporate insolvency resolution process in respect of Balaji Paper Newsprint Private Limited, a corporate entity, having its Registered office at 23, Brabourne Road, Kolkata-700001, (hereinafter referred as the Corporate Debtor). 3. It is submitted that the Operational Creditor is inter alia engaged in the business of acquiring an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditor has enclosed with the application all the relevant documents, which are as under:- i. A copy of registration certificate automatically generated from the GST portal of the proprietorship firm Lalta Prasad Shaw Co. run and managed By Mr. Jai Kishor Gupta, from Kolkata and Jharkhand offices. (Annexure-I). ii. Letter of Authorisation issued in favour of Ms. Rhituparna Mazumdar and Ms. Arijita Ghosh, Advocates, (Annexure-II) iii. Master Data of Corporate Debtor (Annexure-III). iv. Affidavit in support of this application,(Annexure-IV). v. Copy of all outstanding tax invoices, challans and the corresponding Raw Material Quality Analysis Report along with Ledger maintained by Operational Creditor on account of Corporate Debtor with respect to goods supplied from the Operational Creditor's Jharkhand Office, (Annexure-IV A), vi. Copy of few tax invoices, challans and the corresponding Raw Material Quality Analysis Report along with Ledger maintained by Operational Creditor on account of Corporate Debtor with respect to goods supplied from the Operational Creditor' Kolkata Office, (Annexure IV B). vii. Table showing computation of interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted out that the quality of waste paper supplied is obsolete and had resulted in heavy loss to the Corporate Debtor (Annexure-D). It is submitted that the Corporate Debtor had, inter alia, called upon the Operational Creditor to resolve the quality issues by issuing credit notes for the bad consignment pursuant to discussions between the parties. It is submitted that that letter dated August 20, 2015 issued by the Corporate Debtor placing on record the damage sustained by the Corporate Debtor equipment due to mixing of foreign articles along with the waste paper supplied by the Operational Creditor and calling upon it to issue credit note to resolve such issue. It is further submitted that a similar letter dated September 8, 2015 was issued by the Corporate Debtor that an amount of Rs. 10,00,000/- had been remitted based solely on the applicant's assurance to settle the account by issuing credit note for inferior quality of supply. The Corporate Debtor had further submitted that it has suffered loss of more than 4 Crore on this account (Annexure-F). It is stated that various similar letters were issued by the Corporate Debtor dated 25th September, 2015 regarding non cooperation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at there is no compliance with the mandatory provisions of section 9 of the Code and the Regulations framed thereunder or that the application is ex-facie defective as alleged by the Corporate Debtor. The Operational Creditor has further submitted that the Corporate Debtor had never raised any dispute about the quality of the products supplied to it by the Operational Creditor will be evident from the usual mode of communications adopted by the Operational Creditor and the Corporate Debtor. It is submitted by the Operational Creditor that the communication between the Corporate Debtor and the Operational Creditor were always through electronic mails. Infact during the period between 2018 to 2019 about 350 electronic mails were exchanged between the Operational Creditor and the Corporate Debtor and on perusal of the emails, it will be clearly evident that the Corporate Debtor had never raised any disputes or marked any protest on account of poor or low quality material supplied by the Operational Creditor. It is submitted that the Operational Creditor is willing to give inspection of the correspondences, if so requested by the Corporate Debtor. Operational Creditor has denied all th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Debtor from time to time. The remaining/undisputed raw material has been consumed by the corporate debtor. 15. It is submitted that the Corporate Debtor consumed all the raw material supplied to it by the Operational Creditor on credit and failed and neglected to pay the consideration thereof. As a consequence thereof, the operational creditor issued a demand notice dated 17th June, 2019 in the prescribed format, being Form No. 3 and 4. 16. It is further submitted by the Ld. Counsel for the Operational Creditor that after receiving the aforesaid Demand Notices, the Corporate Debtor could neither point out the existence of any dispute, pending suits or litigation nor could they supply any proof supporting repayment of unpaid operational debt and hence the instant application was filed. The corporate debtor thereafter entered appearance in the matter and filed a detailed affidavit in reply. The contentions of the corporate debtor in its affidavit of reply are: a. That the operational creditor had purportedly supplied substandard raw material and b. Accounts between the parties have been settled. 17. It is submitted that in its reply, the Corporate Debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance on documents which are forged, fabricated and manufactured. It is submitted that the Corporate Debtor in usual course, used to dispatch Panjikas in sealed envelopes through speed post to the Operational Creditor. Each time, upon receiving the same, the applicant replied to the Corporate Debtor via whatsapp message, acknowledging the receipt of such Hanumanth Panchang and conveying thanks. However, to the utter astonishment of the operational creditor, the speed post tickets corresponding to one such consignment has been relied upon as proof of delivery of a letter that has never been seen before by the Operational Creditor. 22. It is submitted that the Corporate Debtor has attempted to play fraud upon the operational creditor as well as this Adjudicating Authority with an intention to frustrate the purpose of the Operational Creditor in filing the instant application. 23. During the course of arguments, the Ld. Counsel for the Corporate Debtor argued that the present petition under section 9 of the Insolvency and Bankruptcy Code, 2016 is in respect of an alleged claim arising out of transactions for sale and delivery of waste paper. The petition is not maintainable inasm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of Rs. 8 lakhs, it is evident from the bank statement at pages 34 and 35. Therefore, by agreement, these claims were settled. As on January, 2018, no amount was payable. (e) It was on the promise to supplying better and proper goods that the parties subsequently recommended business as evident from the letter dated 28th May, 2018 @ page 37. Transactions recommenced after two years. However, again, there were quality issues. It is seen from letter dated 7th March, 2018 @ page 36, 28th May, 2018 @ page 37, 19th July, 2018 @ Page 38. Postal receipt @ page 39 and proof of delivery @ page 40. (f) The letter dated 19th July, 2018 being Annexure 'Q' to the Reply, was sent by Speed post and in the Rejoinder, there is no denial of receipt of the same by Operational Creditor. Only a vague and meaningless allegation is made that the delivery report is incomplete . (g) The fact that the Corporate Debtor had suffered losses is again recorded in letter dated 30th November, 2018 @ page 42. This letter records that the Corporate Debtor has incurred losses of approximately Rs. 2,50,00,000/- due to use of the sub standard material supplied by the Operational Creditor and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... take advantage of its own wrongs. Repeated demands had been made by Corporate Debtor for issuance of credit note but to not avail. It is admitted in the Rejoinder that the Operational Creditor did not issue any credit note as requested (para (x), page 13 of Rejoinder) (k) In the Rejoinder, the Operational Creditor having received the letters which were hand delivered. It disputes the signature and the stamp of the Operational Creditor. Such contention is false and these arguments ought not to be heard in a proceeding of this nature. Moreover, in respect of the documents received by Speed Post, the Corporate Debtor falsely contends that the letters were not received and other documents were sent. These defences are false and ought not to be countenanced. 24. It is submitted that non- issuance of formal reply to the Section 8 demand notice will not preclude the Corporate Debtor from opposing the petition particularly in view of the serious pre-existing disputes that have been demonstrated in the Reply Affidavit. The applicant will be required to prove its case even in the absence of a reply by the Corporate Debtor to the Form-3 notice. 25. We have gone through and consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The amount claimed is outstanding on account of the supplies made, and payable by the Corporate Debtor to the Operational Creditor. Section 8 Notice has been duly delivered but not responded to by the Corporate Debtor. The pleas taken by the Corporate Debtor as regards preexisting disputes could not convince us, and are therefore rejected. 27. In view of the aforesaid pleadings of the parties, we consider it to be a fit case for admission of the petition, we, therefore, pass the following orders:- ORDERS i) The application filed by the Operational Creditor under Section 9 of the Insolvency Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process against the Corporate Debtor, is hereby admitted. ii) We hereby declare a moratorium and public announcement in accordance with Sections 13 and 15 of the I B Code, 2016. iii) Moratorium is declared for the purposes referred to in Section 14 of the Insolvency Bankruptcy Code, 2016. The I.R.P. shall cause a public announcement of the initiation of Corporate Insolvency Resolution Process and call for the submission of claims under Section 15. The public announcement referred to in clause (b) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as Interim Resolution Professional for ascertaining the particulars of creditors and convening a Committee of Creditors for evolving a resolution plan subject to production of written consent within one week from the date of receipt of this order. xi) The Interim Resolution Professional should convene a meeting of the Committee of Creditors and submit the resolution passed by the Committee of Creditors and shall identify the prospective Resolution Applicant within 105 days from the insolvency commencement date. xii) The Operational Creditor/Applicant is directed to deposit Rs. 5,00,000/- (Rupees Five Lac only) with the IRP appointed hereinabove within three days from this order. IRP can claim the preliminary expenses and fees subject to the approval by the CoC and after constitution of CoC. 28. IA (IBC)/1671/KB/2019 is dismissed. 29. Registry is hereby directed to communicate the order to the Operational Creditor, the Corporate Debtor, the I.R.P. and the jurisdictional Registrar of Companies by Speed Post as well as through email. 30. List the matter on 30/06/2022 for filing of Progress Report. 31. Certified copy of the order may be issued to all the conc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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