Antony Joseph vs M/s Icicles HVAC Experts Private Limited

This Insolvency and Bankruptcy Application has been filed by Antony Joseph Proprietor of En Tech ADP (hereinafter called 'Operational Creditor') against M/s. ICICLES HVAC Experts Private Limited (hereinafter called the 'Corporate Debtor'), a Company incorporated under the Companies Act, 1956, seeking to invoke the Corporate Insolvency Resolution process against the Corporate Debtor under Section 9 of Insolvency and Bankruptcy Code, 2016(hereinafter called "I&B Code") read with Rule 6 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016, on the ground that the Corporate Debtor defaulted in making payment to the extent of Rs. 4,64,571/- as on 13.04.2018 along with interest @ 24 % p.a.

The brief facts of the case are as under: -

The Operational Creditor is involved in manufacture /supply business of aluminium powder coated grills, round/ square slots, disc valve, perforated grill and allied products. During the course of business, the Corporate Debtor has placed purchase order to the Operational creditor for supply of Aluminium Coated grills and allied products. On the basis of the orders placed, the Operational Creditor supplied the materials and raised invoices. However, the Corporate Debtor failed to make the payments. The following are the invoices in which the outstanding debt due and payable by the Corporate Debtor: -

The interest due on the Total Outstanding -Principal Debt on Goods Supplied 8. Services Rendered calculated at the rate of (24%) till (31^{\text{st}}) of January 2020 is Rs.2,03,563/-, therefore, the total debt payable on account of Supply & Services rendered by the Corporate Debtor stands at Rs.6,68,134 - The said Total Operational Debt on Supply made & Services rendered is due and payable from the date of each invoice to the Operational Creditor.

It is further stated that the Corporate Debtor has also availed input tax credit facility under the Goods and Service Act,1982 for the invoices raised by the Operational Creditor, which clearly establishes the fact that the goods supplied by the Operational Creditor have been accepted.

It is stated by the Operational Creditor that Form 3 Demand notice was sent to the Corporate Debtor on 05.09.2019 for the above-mentioned debt as per Section 8 of the Insolvency and Bankruptcy Code 2016, which was received by the Corporate Debtor on 06.09.2019.

It is also stated that the respondent has not disputed the amount of debt between the parties and relies on the judgment of the Hon'ble Supreme Court in the case of "Mobilox Innovations Pvt. Ltd. vs. Kirusa Software Pvt. Ltd." ((2018) 1 SCC 353).

The Corporate Debtor filed reply stating that the application is not maintainable before this Tribunal under Section 9 of I&B Code since the resolution of dispute with respect to the claim do not come within the purview of the proceedings under Section 9 of the I&B Code. As per Section 9 of the I&B Code the application can be filed only if the Corporate Debtor fails to make the payment within 10 days from the date of delivery of the notice demanding payment by the Operational Creditor or notice of dispute under Section 8 (2) by the Respondent to the Operational Creditor. It is further stated that the Corporate Debtor in reply to the demand notice has also informed the Operational Creditor about the existence of the dispute with respect to the claims made by the Operational Creditor. The application deserves to be prime facie dismissed on this sole ground. The Operational Creditor has conveniently supressed the fact that existence of dispute has been notified to the applicant by the Corporate Debtor. Section 8 (2) of the I&B Code has been amended as per Act 26 of 2018 and after the amendment the Section reads as follows: -

Before the amendment the adjective "and" was used instead of "or". Therefore, after the amendment the intimation regarding the dispute with respect to the claim alone is sufficient and it is not necessary that proceedings for the resolution of the dispute should be pending in a suit or arbitration proceeding before the receipt of notice. Hence the existence of the dispute alone is the decisive factor with respect to the sustainability or otherwise of the application before this Tribunal. As submitted above, the existence of dispute with respect to the claim and also intimation regarding the payments made to the Operational Creditor has been intimated to the applicant by the Corporate Debtor on receipt of the notice within the statutory period of 10 days. Therefore, the application deserves to be dismissed. They raised a further contention that the entire claim of the Operational Creditor as per this application is for a total amount of ₹6,68,134/-. As per the notification of the Ministry of Corporate Affairs dated 24.03.2020, the Central Government has raised the threshold for applications to be filed before this Tribunal as ₹1,00,00,000/- (Rupees One Crore Only).

The Corporate Debtor is a company that carries out the works of AC installation on a large scale and are the channel partners of MNC Blue star. The Corporate Debtor used to purchase grills and other related products from the Operational Creditor and used to make payment on credit basis. It is further stated that there is no invoice raised towards supply of materials by the Operational Creditor to the Corporate Debtor on 13.05.2018 as stated by the Operational Creditor in the application.

Further it is stated that in the application regarding the 'details of Transactions on account of which debt fell due', the Operational creditor is claiming amounts for the invoices raised from 13.04.2018. However, the Corporate Debtor has made a credit of ₹3,00,000/- (Rupees Three Lakhs Only) in the account of Operational Creditor on two occasions (₹1,00,000/- on 26.04.2018 and ₹2,00,000/- on 28.05.2018) towards the transaction with the Operational Creditor. However, the Operational Creditor has clandestinely hidden/ignored these payments and not mentioned the same in this application and approached this Tribunal with malafide intentions to try and grab extra money from the Corporate Debtor.

The Corporate Debtor further stated that the Operational Creditor cannot claim interest for the dates before the date of cause of action as mentioned in the application. The interest calculated is also not in accordance with the payments made by this Respondent to the Operational Creditor. The Operational Creditor has made the calculations with malafide intentions. There is no amount as claimed which is due to the Operational Creditor from the Respondent. This Respondent had informed the Operational Creditor regarding all these aspects and raised a dispute regarding the amount claimed by the Operational Creditor as per the above application within 10 days from the date of receipt of notice under Section 8 of the Act.

It is further stated that the Certificate produced under Section 9 (3) (c) is defective. The Operational Creditor has intentionally produced a certificate dated 13.02.2020 stating that there has been no payment made by Corporate Debtor from 02.09.2019. The only intention of the Operational Creditor is to grab money illegally from the Corporate Debtor. There is no amount due to the applicant as contended. The allegation of debt is not correct and is denied. The interest calculated is exorbitant and Corporate Debtor is not liable to pay such exorbitant interest to the Applicant.

I have heard the Learned counsel for both the parties through video conferencing and perused the whole case records including documents and Annexures appended with the case records. The following are the observations of this Bench: -

This Tribunal examined the claim of the Operational Creditor in the light of the landmark judgement of Hon'ble Supreme Court in "Innoventive Industries Ltd. v. ICICI Bank and Anr. — (2018) 1 SCC 407", to establish any pre-existing dispute in the instant matter. The relevant para is quoted below:

From the aforesaid judgement, it is evident that the existence of a dispute or the record of the pendency of a suit or arbitration proceedings should be pre-existing—i.e. prior to demand notice or invoice received by the 'Corporate Debtor'. The moment there is existence of dispute, the 'Corporate Debtor' gets out of the clutches of the 'I&B Code'.

In this case, this Tribunal did not come across any record which would show that a dispute that was pre-existing apart from that of a hypothetical or illusory dispute which has been raised by the 'Corporate Debtor'.

Hence, it is clear that the Corporate Debtor has not raised any dispute relating to debt nor raised any dispute relating to quality of service of goods. They merely shown the difference of the date on which the amount claimed and that they have already credited an amount of ₹3,00,000/- (Three lakhs only) which is not shown in the extract of the bank statement provided in the application. Hence the Operational Creditor is indenting to grab money illegally from the Corporate Debtor claiming an exorbitant interest. The above statement made by the Corporate Debtor cannot be termed as a pre-existing dispute or plausible dispute.

For the aforesaid findings, the present application is complete in all respects and the applicant is entitled to claim its dues. The applicant succeeded in establishing the default in payment of the operational debt beyond doubt. In view of the above, the instant petition deserves to be admitted.

The Operational Creditor has suggested the name Mr. Dileep K.P, having Registration No. IBBI/IPA-001/IP-P-01310/2018-2019/12220, email id kpdileep57@gmail.com, residing at Veluthedath (house), Ponnurunni Vytilla P.O, Cochin-68201, for appointment as Interim Resolution Professional (IRP). He has filed a declaration in Form 2 affirming that he is a Registered Insolvency Professional and no disciplinary proceedings are pending against him.

Application on behalf of Operational Creditor filed under Section 9 of the I& B Code 2016 for initiation of Corporate Insolvency Resolution Process is admitted against the Corporate Debtor, M/s. ICICLES HVAC Experts Private Limited prohibiting the following:

a. The supply of essential goods or services to the corporate debtor, if continuing, shall not be terminated or suspended or interrupted during the moratorium period.

b. That the provisions of sub-section (1) of Section 14 of IBC shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.

c. That the order of moratorium shall have effect from the date of this order till the completion of the corporate Insolvency Resolution Process or until this Bench approves the Resolution Plan under Sub-Section (1) of Section 31 of IBC or passes an order for liquidation of corporate debtor under section 33 of IBC, as the case may be.

d. That the public announcement of the corporate insolvency resolution process shall be made immediately as specified under section 13 of IBC.

That the order of moratorium against the Corporate Debtor shall have effect from the date of pronouncement of this order till the completion of the CIRP or until this Bench approves the resolution plan under Sub-Section (1) of Section 31 or passes an order for liquidation of Corporate Debtor under Section 33, as the case may be.

That the public announcement of the CIRP shall be made immediately as specified under Section 13 of the Code.

That this Bench hereby appoints Mr. Dileep K.P having Registration No. IBBI/IPA-001/IP-P-01310/2018-2019/12220, email id- kpdileep57@gmail.com residing at Veluthedath (h), Ponnurunni Vytilla P.O, Cochin-68201, Ernakulam, Kerala-682028, as Interim Resolution Professional to carry out the functions as mentioned under the Code. The fee payable to IRP, or, as the case may be the RP, shall comply with such Regulations, Circulars and Directions as may be issued by the Insolvency & Bankruptcy Board of India (IBBI). The IRP/ RP shall carry out his functions as contemplated by Sections 15, 17, 18, 19, 20 and 21 of the IBC.

The Registry is directed to communicate this order to Operational Creditor, Corporate Debtor and IRP through email and speed post. No Order as to costs.