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TMI Blog2023 (7) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... e Corporate Debtor, since the Corporate Debtor would not have any ostensible reason not to record the entries relating to Appellant incorrectly and further no reason has been given by the Appellant why this Corporate Debtor s Ledger Account should not be relied on. Whether the abovementioned discounts were given by the Corporate Debtor for the benefit of the Appellant in the ordinary course of business? - HELD THAT:- The Appellant has not produced any document apart from the minutes of meetings dated 03.04.2018 to show that he had raised issue about poor quality and other issues for claiming discount with the Corporate Debtor at the time of supply of the raw material, but he is now claiming these discounts on the basis of meeting held on 03.04.2018 which took place barely ten days before the passing of the CIRP initiation order - the Appellant has not produced any other document apart from the minutes of the meeting dated 3.4.2018 to buttress his claim that the said discounts were given in the ordinary course of business and why these discounts were admitted after a lapse of many months after the supply of raw material. Moreover, it is found that such benefit of discounts were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btor as on 31.03.2018. After an RTGS payment of Rs. 16,36,223.40 made by the Appellant to the Corporate Debtor on 29.01.2018. 5. The Appellant has further submitted that there were issues of poor quality of raw material supplied by the Corporate Debtor and certain other matters relating to processing cost and rate difference (discounts) which were discussed between the Appellant and the Corporate Debtor in a meeting on 03.04.2018, whereafter, after certain discounts, a total amount of Rs.30,92,710.00 was to be credited to the Appellant s account, and consequently only an amount of Rs. 7,764.60 was required to be paid by the Appellant to the Corporate Debtor. 6. The Appellant has further submitted that the amount relating to poor quality, processing costs, rate difference and discounts thereof were all decided to be given in the ordinary course of business, and therefore the adjudication in the Impugned Order that these amounts relate to undervaluing of the transaction between Corporate Debtor and the Appellant is not correct, and on this account the Impugned Order should be set aside and only a direction be issued for an amount of Rs.7,764.60 which remains as outstanding, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dator has argued that the Corporate Insolvency Resolution Process (in short CIRP ) against the Corporate Debtor commenced on 13.04.2018 and later order for liquidation of the Corporate Debtor was passed on 18.02.2019. He has argued that in ledger account maintained by the Corporate Debtor and available to the Liquidator as part of record of the Corporate Debtor shows that after a payment through RTGS of an amount Rs. 16,36,223.40 a net amount of Rs. 31,00,474.60 remained to be paid by the Appellant to the Corporate Debtor, and this figure appears clearly in the ledger account maintained by the Corporate Debtor (attached at pg. 206 of appeal paper book). He has further pointed out that on 31.03.2018 a discount of Rs. 6,19,273.00 has been allowed @ 5% of C/Y sale and further deduction of an amount Rs. 13,76,320.00 has been allowed due to quality problem, discount of Rs.10,00,960.00 has been allowed due to labour and other charges and discount of Rs. 7,15,430.00 has been allowed as rate difference. He has clarified that among these deductions, the last three deductions relating to poor quality of raw material, labour and other charges and rate difference were entered in the ledger ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re clearly meant to provide unreasonable and illegal benefit to the Appellant. 13. We first look at the ledger account of the Appellant submitted by the Liquidator (attached at pg. 206 of the appeal paper book). Appearing in this ledger account, the following entries are relevant for this case: Ledger Account of J.V. Strips Limited J.V. Srips Limited E8/1, 8 th Floor, Kings Mall, Sector 10, Rohini, Delhi-85 (2017-18)-F Date Fro m VR. No. Particulars Deb it (Rs. Credit (Rs.) Dr / Cr Balance (Rs.) 29.01. 18 B4 129 01 RTGS No. IDIBR52018012915 641581 16,36,22 3.40 Dr 31,00,47 4.60 31.03. 18 J 331 70 Discount allowed @ 5% of C/Y Sale 6,19,273. 00 Dr 24,81,20 1.60 05.04. 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppears to have given a discount of Rs.6,19,273.00 for C/Y sale, Rs. 13,76,320.00 for poor quality of raw material, Rs. 10,00,960.00 for labour and other charges due to material problem and Rs. 7,15,430.00 for rate difference. 16. We are of the view that the ledger account maintained by the Corporate Debtor correctly depicts that amounts of discounts given to the Appellant and the amount due and payable by the Appellant to the Corporate Debtor, since the Corporate Debtor would not have any ostensible reason not to record the entries relating to Appellant incorrectly and further no reason has been given by the Appellant why this Corporate Debtor s Ledger Account should not be relied on. We therefore, place reliance on the ledger account produced by the Liquidator which is attached at pg. 206 of the appeal paper book. 17. The main issue in contention is whether the abovementioned discounts were given by the Corporate Debtor for the benefit of the Appellant in the ordinary course of business. In this regard, we look at the recording of the reply of the Appellant in paragraph 5 of the Impugned Order wherein the Appellant has claimed that such discounts were mutually decided betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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