C J Chemical Pvt. Ltd. vs LN Industries India Ltd

PER: BENCH

This Petition is filed under Section 9 of Insolvency and Bankruptcy Code (hereinafter to be referred as “Code”), read with Rule 6 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, seeking admission of the petition, initiation of Corporate Insolvency Resolution Process (CIRP), granting moratorium and appointment of Interim Resolution Professional as prescribed under the Code and Rules thereon, contending that the Respondent defaulted in the payment of alleged debt of Rs. 3,00,50,089(three crores fifty thousands and eighty nine only)

The averments in brief of the Application and rejoinder are that;

The Petitioner, herein after referred to as “Operational Creditor”, is a Private Limited registered office in Hyderabad, is manufacturer and dealers in all kinds, classes, application specification, description and uses of dyes, industrial chemicals including rubber chemicals and other allied products.

(ii). The Respondent, herein after referred to as “Corporate Debtor”, is a Public Limited Company incorporated under the Companies Act, 1956.

(iii). The Operational creditor supplied chemicals to the Corporate Debtor on credit basis and raised invoices from time to time. The Operational Creditor, issued Form-3 demand notice on 10.12.2021, demanding payment of the operational debt which was due and defaulted on 10.02.2020. No reply is received from the Corporate Debtor. The Petitioner in its rejoinder stated that the Corporate debtor was given enough time to make repayment but failed. Thus, submitting, prayed the Adjudicating Authority to allow the petition.

Counter filed by Corporate Debtor:-

The Corporate Debtor filed counter, inter-alia, admitting the debt but disputed the quantum of debt by contending that rupees 2,50,00,000(Two crores fifty thousands only) is due but not Rs. 3,00,50,089(three crores fifty thousands and eighty nine only) as claimed by the applicant.

(ii). According to the corporate debtor it had approached the applicant to settle the dues as the corporate debtor was facing a lot of financial crises.

(iii). That considering the financial position of the Corporate Debtor, The Hon’ble tribunal may pass appropriate orders.

In light of the context put forth, the point that emerges for consideration is : Whether there is an operational debt as claimed by the applicant due and payable by Corporate Debtor, If so, whether the Corporate debtor defaulted in payment of same ?.

We have heard the Learned Practicing Company Secretary for the Operational Creditor Shri Sneha Agarwal and Learned Counsel for the Corporate Debtor, Shri C Shilpa, perused the records and case laws.

A perusal of counter filed by Corporate Debtor shows that, the Corporate Debtor has not disputed the debt and only disputed the quantum of the debt. As per Section 5(6) of the code,

Therefore as per above section, dispute if any as to debt, shall be regarding existence of debt. In the case in hand, the existence of debt is not disputed, as according to corporate debtor, the quantum of debt alone is in dispute. Hence, the operational debt in this case remain undisputed stands admitted and established. Since, it is not the case of corporate debtor that it discharged the said debt, the default also stands established.

Therefore for above reasons, this Adjudicating Authority admits this Petition under Section 9 of IBC, 2016, declaring moratorium for the purposes referred to in Section 14 of the Code, with following directions:

Corporate Debtor, LN Industries India Ltd is admitted in Corporate Insolvency Resolution Process under section 9 of the Insolvency & Bankruptcy Code, 2016,

The Bench hereby prohibits the institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any court of law, Tribunal, arbitration panel or other authority; transferring , encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); the recovery of any property by an owner or lessor where such property is occupied by or in possession of the corporate Debtor;

That the supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period.

Notwithstanding anything contained in any other law for the time being in force, a license, permit, registration, quota, concession, clearances or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concessions, clearances or a similar grant or right during the moratorium period.

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

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 or passes an order for liquidation of Corporate Debtor under Section 33, whichever is earlier.

That the public announcement of the initiation of Corporate Insolvency Resolution Process shall be made immediately as prescribed under section 13 of Insolvency and Bankruptcy Code, 2016.

Accordingly, this Tribunal appoints Shri Maligi Madhusudhana Reddy having registration No. IBBI/IPA-001/IP-IP00843/2017-2018/11427 Residing at G-8, amrutha ville, opp.yashoda hospital, Rajbhavan Road, Somajiguda, Hyderabad,500082 as IRP. The aforesaid IRP has no disciplinary proceedings pending against him. Proposed IRP filed Form-B issued by the Institute of Insolvency Professional. This information is also available in IBBI Website. Thus, there is compliance of Regulation 7A of IBBI (Insolvency Professionals) Regulations, 2016, as amended. Therefore, the proposed IRP is fit to be appointed as IRP since the relevant provision is complied with. ]

The petitioner is directed to pay a sum of Rs.1,00,000/- (Rupees one lac only) to the Interim Resolution Professional to meet out the expenses to perform the functions assigned to him in accordance with Regulation 6 of IBBI (Insolvency Resolution Process for Corporate Person) Regulations, 2016. This shall, however, be subject to adjustment by the Committee of Creditors as accounted for by Interim Resolution Professional and shall be paid back to the petitioner.

9). Accordingly, this Petition is admitted.

10). The registry is directed to communicate order of this tribunal to IBBI, as well as the IRP appointed to conduct CIRP.