Amar Dairy vs Mauli Foods And Agri Processing Private Limited And Ors

V. Nallasenapathy, Member (T)

This petition is filed by Mr. Amar Khatri, Prop. of Amar Dairy ("Petitioner") against Mauli Foods and Agri Processing Private Limited as provided under Section 9 of the Insolvency & Bankruptcy Code, 2016 ("Code") read with Rule 6 of the Insolvency and Bankruptcy Board of India, (Application to Adjudicating Authority) Rules, 2016 ("Rules") alleging that the Corporate debtor defaulted in making payment to the extent of Rs. 3,31,78,750/-.

The petition reveals that the petitioner entered into an agreement for the purchase of Milk Powder of Siddharth Brand Company, a subsidiary of the Corporate Debtor with intermediation of one Mr. Prakash Prashant Mangurkar, sole Proprietor of Sai Ganesh Enterprises. The petitioner submits that the above said Mr. Prashant Prakash Mangurkar is also arrayed as a respondent in the Petition being a facilitator/intermediator. The translated copy of an agreement dated 27.02.2017 annexed as Exhibit "B" to the Petition at page 29 reveals that the directors of the Corporate Debtor had agreed to supply 150 tons of Milk Powder (SMP) to the petitioner, at the rate of Rs. 180 per Kg for 100 tons and at the rate of Rs. 190 per Kg for the balance 50 tons of milk powder. As per the agreement the purchase consideration for the milk powder will be deposited in Mr. Prashant Prakash Mangurkar's Bank Account with Axis Bank at Miraj Branch and the said person will receive and store the milk powder in his name in a Government warehouse.

Accordingly, the petitioner deposited a sum of Rs. 1,80,00,000/- on 02/03/2017 and another sum of Rs. 95,00,000/- on 31/03/2017 as agreed. The directors of the Corporate debtor issued a letter of Promise (known as Sammatipatra in Marathi) on 03/04/2017 to the petitioner saying that they have received a sum of Rs. 2,75,00,000/-for the supply of milk powder and it was also stated that the milk powder will be supplied before 01/05/2017 to Mr. Prashant Prakash Mangurkar.

It is submitted that the Corporate debtor failed to supply the milk powder as per the terms of the contract. In view of the failure, the petitioner sought for the refund of the consideration paid to the Corporate debtor through the facilitator. The Corporate Debtor, through the facilitator, issued a cheque for Rs. 2,00,00,000/-dated 21/10/2017 to the petitioner, for discharging its liability. However the said cheque was returned with an endorsement as "Funds Insufficient".

It is further submitted that the cheque directly issued by the Corporate Debtor to the facilitator, enabling the encashment of the cheque issued by the facilitator in favour of the petitioner, was also dishonoured for want of balance in the account of the Corporate Debtor and these transactions clearly establish the nexus between the Corporate Debtor and the facilitator. The petitioner issued demand notices to the Corporate debtor and the facilitator requiring them to make the payment of Rs. 2,00,00,000/- for the dishonoured cheque on 10/07/2018 under Section 138 of the Negotiable Instrument Act, 1881. Petitioner also lodged a Complaint/FIR with police station of Bodwad District. Jalgaon (MS) on 29/08/2018 against directors of the Corporate debtor and the facilitator.

The petitioner issued a demand notice dated nil in Form 3 under Section 8 of the Code to the Corporate debtor, two of its directors and to Shri. Prashant Prakash Mangurkar demanding a sum of Rs. 3,31,78,750/-.The Corporate Debtor, its two directors and the facilitator by a joint reply dated 26/04/2019 submitted that the agreement referred in the notice is a forged agreement, agreement is not registered, the promise letter dated 03/04/2017 appears to be fake and forged, the cheque issued by Shree Sai Ganesh enterprises in the name of the petitioner does not have any connection with the directors of the Corporate Debtor and the facilitator, the police is scrutinising the agreement and the said document cannot be relied for the proceedings under the Code.

The Corporate debtor filed a reply to the petition and submitted that M/s. Sai Ganesh enterprises is also impleaded as respondent in this application and the said Sai Ganesh enterprises is not a Corporate Person and hence the petition is defective, the Form 5 is not in the form prescribed under the Code, petitioner and the corporate debtor entered into a forward purchase agreement, the Corporate debtor is in the business of dairy products and executed an agreement on 27/07/2017 for supply of milk to the petitioner wherein it was mutually decided that the petitioner shall deposit the amount of transaction in the account of M/s. Sai Ganesh enterprises and thereafter the amount shall be transferred to the petitioner, the Corporate debtor has already paid a sum of Rs. 79,78,411/- to M/s. Sai Ganesh enterprises and the copy of the bank statement reflecting the payment to M/s. Sai Ganesh enterprises is annexed as an Annexure R1 to the reply, the petitioner is not an Operational Creditor, since already corporate debtor made a payment of Rs. 79,78,411/- to M/s. Sai Ganesh enterprises the claim amount mentioned in the petition is wrong, petitioner is not entitled to charge any interest as there is no direct transaction between the petitioner and the Corporate debtor, the date of default mentioned in the petition is incorrect as there is no specific date of default and in view of the fact that the agreement is a forward purchase agreement the claim of the petitioner does not fall under the purview of the code and the affidavit under Section 9(3)(b) of the Code has not been filed by the petitioner.

The petitioner also filed rejoinder and sur-rejoinder was filed by the Corporate Debtor.

On hearing the submissions of the learned counsel appearing on both the sides and on going through the pleadings the following are the observations of this Bench.

a. The demand notice dated NIL was sent to Mauli Foods and Agri Processing Pvt. Ltd., the directors of the Corporate debtor Mr. Amit Babosa Shelake & Mr. Anoop Bhagwan Kale and Mr. Prashant Prakash Mangurkar.

b. Section 8(1) of the Code provides that an Operational Creditor, on the occurrence of default deliver a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in the default to the Corporate debtor in such form and manner as may be prescribed. Section 8(1) of the Code is very clear that the demand notice has to be delivered to the Corporate debtor alone. Here the demand notice has been given to four persons, hence the petitioner is casting liability not only on the Corporate debtor but also on other three individuals. In view of this, Section 8(1) demand notice sent by the petitioner is a defective notice and the section 9 petition based on this Section 8 notice cannot be entertained.

c. The advance amount for the procurement of the milk powder to the extent of Rs. 2.75 Crores was given by the petitioner to the intermediary/facilitator Mr. Prashant Prakash Mangurkar, hence the claim made by the petitioner against the Corporate debtor is not in order.

In the light of the above discussion, this petition is dismissed, with liberty to the petitioner to approach an appropriate authority for remedies, if so advised. No cost.