Ardex Endura (India) Private Limited vs Meta Arch Private Limited

Per: Shyam Babu Gautam, Member (Technical)

This is a Company Petition filed under section 9 (“the Petition”) of the Insolvency and Bankruptcy Code, 2016 (IBC) by Ardex Endura (India) Private limited ("the Operational Creditor"), seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Meta Arch Private Limited ("the Corporate Debtor").

The Corporate Debtor was incorporated 09.07.1998 under the Companies Act, 1956. Its Corporate Identity Number (CIN) is U20299PN1998PTC012673. Its registered office is at 110, Pride Silicon Plaza, S.B Road, Model Colony, Pune, Maharashtra-411016.

The Applicant submits that the Debt occurred on 4^th July 2016 and the amount of Debt is Rs. 15,74,692/- including the Principal amount of Rs. 11,69,310/- and Interest @18% amounting to Rs.4,05,382/-.

The Corporate Debtor has Authorised Share Capital of Rs. 20,00,000/- and the Paid Up Share Capital is valued at 1,42,000/-.

The Applicant is involved in the business of tile fixing adhesives, grouts, flooring, water proofing, tile care, concrete repair, solution and allied products for which, the applicant came into contract with the respondent Corporate Debtor for supply of raw materials to the Applicant.

The materials supplied by the Corporate Debtor are namely: WPM 265 5L, Sealing Tape 120/70 Article No 27010, Flex Liquid 5L, Flex Powder Grey 7.50 Kg, WPM 124 20 Kg, P 51 5 Kg, WPM White 5L, SU 10 600ml, B 30 25 Kg, EP GT A Grey 1 Kg and allied products.

On event of non-payment, a Demand Notice was issued by the Operational creditor in respect of unpaid operational Debts due from the Corporate Debtor under Section 8 of the Code dated 23^rd June 2018 along with acknowledgement. Copy of the same is Annexed as “Annexure-I” of the Petition.

The Applicants submits the Following list of Invoices issued to Meta Arch:

The Respondent submits that it is a company dealing in Interior Turnkey Projects and Designing and has come across the Applicant for supply of tile fixing adhesives, grouts, flooring, water proofing, tile care and allied products.

The respondent submits that the petitioner was supposed to deliver the goods only when 100% of payment for the same is been done by the Respondent Company to Petitioner. Despite being aware of this fact, the Corporate Debtor has supplied the goods before even receiving any advance money from the Respondent, which is one of the terms as per the sample purchase order. Annexed as “Annexure-3” of the reply.

The Respondent submits that they had an oral agreement with the applicants to visit the site wherein, the Respondent Company undertakes the work and then that person only decided the required quantity of material for that particular site.

The respondent submits that somewhere in October 2016, the Respondent realised that the applicant has supplied more than the required amount of the supplies and it has been done with the intent to fulfil the sales target of the Applicant.

The Respondent also submits that since October 2016, there exists a dispute in between the Respondent and the Applicant, of which, the Applicant is completely aware. Thus, under the purview of Section 9 (5) (ii) (d) of the code, this.

The Respondent submits that the Applicant was, very well made aware of the fact that excess material is lying at the site, and the same shall be removed as these products comes with a expiry period, but the petitioner has not done so till date.

The Respondent submits that upon the balance confirmation given by the Corporate Debtor, they have made note on it that the excess material should be taken back, and amount is to be adjusted.

The Respondent submits that the provisions of Section 8 & 9 does not provides for combined/ joint petition by one or more Operational Creditors unlike the provisions of Section 7 for the Financial Creditors.

Moreover, the Respondent Submits that the present petition falls incomplete as under the provisions of Section (9) (3) (b) of the Code, “an affidavit to the effect that there is no notice given by the Corporate Debtor relating to a Dispute of the unpaid operational Debt is to be furnished along with the application for Initiation of CIRP by a Operational Creditor, but the same is not been done my the Applicant.

The Applicant submits that the Respondent has admitted that they used to issue various purchase order to the Applicant for supply of Epoxy Grout.

The Operational Creditor submits that the Corporate Debtor has never raised any dispute in respect of supplied of excess quantity material until the demand for payment raised by the Operational Creditor after a year.

The Corporate Debtor has duly received and accepted the said material without any dispute of defect in quality and quantity. The material supplied y the Operational Creditor had stipulated expiry dates and the Operational Creditors has never supplied any excess stock as alleged therein. the material supplied by the Operational Creditor are as per demand of the Corporate Debtor. The Corporate Debtor has utilized all the products supplied by them and have never complained of excess material until the demand of payment made by the Operational creditor on or after Year. The last bill issued on 7^th October 2015 and alleged complaints of supply of excess material made on 1^st November 2016 and i.e. also after balance confirmation issue. The materials were also supplied by the Operational creditor as per Corporate Debtor’s demand made through email. E-mail dated 7^th August 2015, the Corporate Debtor has agreed to release balance payment and further requested to supply materials as required. Annexed as “Annexure-1” of the Rejoinder.

We have heard the submissions of Applicant as well as the Respondent and perused the records.

The Applicant i.e. the Operational Creditor as per Purchase Order supplied material and stand taken by the Corporate debtor that there was understanding that material should be supplied only 100% advanced payment, but the Corporate Debtor has never raised any dispute in respect of supplied of excess quantity material until the demand for payment raised by the Operational Creditor after a year. The last bill issued on 7^th October 2015 and alleged complaints of supply of excess material made on 1^st November 2016 and i.e. also after balance confirmation issue. Further Vide email dated 7^th August 2015, the Corporate Debtor has agreed to release balance payment and further requested to supply materials as required.

The Corporate Debtor contended that as per section 9(3)(b) of the I&B Code, there is dispute among parties, but that contention is after thought as until demand for payment raised by the Operational Creditor, the Corporate debtor accepted material supplied and enjoyed the same.

The application made by the Operational Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount stipulated under section 4(1) of the IBC. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor.

The petition bearing CP (IB) 3546/MB/C-II/2018 filed by Ardex Endura (India) Private limited, the Operational Creditor, under section 9 of the IBC read with rule 6(1) of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiating Corporate Insolvency Resolution Process (CIRP) against Meta Arch Private Limited [CIN:U20299PN1998PTC012673], the Corporate Debtor, is admitted.

There shall be a moratorium under section 14 of the IBC, in regard to the following:

Notwithstanding the above, during the period of moratorium: -

The moratorium shall have effect from the date of this order till the completion of the CIRP or until this Adjudicating Authority approves the resolution plan under sub-section (1) of section 31 of the IBC or passes an order for liquidation of Corporate Debtor under section 33 of the IBC, as the case may be.

Public announcement of the CIRP shall be made immediately as specified under section 13 of the IBC read with regulation 6 of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

Mr. Nitin Om Kothari, Registration No. IBBI/IPA-001/IP-P02310/2020-21/13477, Email Id: [email protected], is hereby appointed as Interim Resolution Professional (IRP) of the Corporate Debtor to carry out the functions as mentioned under IBC. The IRP shall carry out functions as contemplated by sections 15, 17, 18, 19, 20 and 21 of the IBC. The fee payable to IRP/RP shall be compliant with Regulations, Circulars and Directions issued by the Insolvency & Bankruptcy Board of India (IBBI) as may be applicable.

During the CIRP Period, the management of the Corporate Debtor shall vest in the IRP or, as the case may be, the RP in terms of section 17 of the IBC. The officers and managers of the Corporate Debtor shall provide all documents in their possession and furnish every information in their knowledge to the IRP within a period of one week from the date of receipt of this Order, in default of which coercive steps will follow.

The Operational Creditor shall deposit a sum of Rs.1,00,000/-(Rupees one lakh only) with the IRP to meet the expenses arising out of issuing public notice and inviting claims. These expenses are subject to approval by the Committee of Creditors (CoC).

The Registry is directed to communicate this Order to the Operational Creditor, the Corporate Debtor and the IRP by Speed Post and email immediately, and in any case, not later than two days from the date of this Order.

A copy of this Order be sent to the Registrar of Companies, Maharashtra, Pune, for updating the Master Data of the Corporate Debtor. The said Registrar of Companies shall send a compliance report in this regard to the Registry of this Court within seven days from the date of receipt of a copy of this order.

Ordered accordingly.