Ecosand vs Vishwas Concrete Products Private Limited

Ashutosh Chandra, Member (T)

C.P. (IB) No. 232/BB/2019 is filed by EcoSand, a registered Partnership Firm (hereinafter referred to as 'Operational Creditor / Petitioner') under Section 9 of the IBC, 2016 R/w Rule 6 of the l&B (Application to Adjudicating Authority) Rules, 2016, by inter alia seeking to initiate Corporate Insolvency Resolution Process in respect of Vishwas Concrete Products Private Limited (hereinafter referred to as 'Corporate Debtor/Respondent') on the ground that the Corporate Debtor has committed default of Rs. 53,03,925.39 (Rupees Fifty Three Lakh Three Thousand Nine Hundred Twenty Five and paise Thirty Nine only) including an interest of Rs. 3,02,550.16 on the Principal outstanding sum of Rs. 50,01,375.23 as per section 16 of MSME Act, 2006 after 45 days from the date of invoice till the date of realisation.

Ms. Sunita Raghuveer N, Partner of M/s. EcoSand, the Petitioner has filed this Petition on behalf of the Partnership firm claiming that the Corporate Debtor defaulted in making payments towards several invoices raised against the supply of m-sands and aggregates. Copies of purchase orders are annexed to the Petition.

It is further submitted by the Petitioner that it purchased boulders from the Respondent's sister concern 'Vishwas Constructions Industries Private Limited' and was liable to pay Rs. 38,73,488.35 for the purchases made. It is stated that the Respondent agreed to set off the said amount which was due to its sister concern against the amounts the Respondent was liable to pay to the Petitioner vide email exchanged on 21.02.2019. A sum of Rs. 50,01,375.23 being the principal claim amount in this petition is outstanding after the set-off.

It is submitted that despite several personal visits and phone calls made, the Respondent did not make payment of the debt amount which led the Petitioner to issue Demand Notice dated 11.05.2019 to the Respondent. However, the same was not delivered to the Respondent. The Demand Notice was therefore served by email dated 18.05.2019 and the same was acknowledged by the Respondent. Copy of the Demand Notice along with copy of returned envelopes and the Copy of email dated 18.05.2019 are annexed to the Petition.

The Petitioner has filed affidavit dated 12.06.2019 in compliance of the section 9(3)(b) of the Code, 2016 and copy of record of default with the information utility, NeSL. Further Bank Certificate dated 31.05.2019 issued by Syndicate Bank stating that the Petitioner has not received any payment from the Respondent from 07.09.2018 to 28.05.2019.

The Respondent filed its statement of objections on 27.02.2020 stating that the purchase orders contained arbitration clause and any dispute between the parties ought to be resolved by arbitration and this petition ought to be dismissed. Further, it is submitted that the Petitioner supplied material such as m-sand and aggregates and in turn the Respondent supplied boulders and the amounts payable shall be set-off by supply of materials.

It is submitted by the Respondent that the Petitioner has failed to produce invoices in support of its claim and has only produced ledger statements which does not amount to admission of liability.

it is submitted by the Respondent at para 13 of Statement of objections that it is willing to amend the current rift that has occurred between the parties and settle the dispute between the parties.

Heard Shri. Ashok Gubbi, learned Counsel for the Petitioner and Shri Perikal K. Arjun, learned Counsel for the Respondent through Video Conference and we have carefully perused the pleadings of both the parties and extant provisions of the Code, 2016 and the Rules made thereunder.

The learned Counsels for the Petitioner and Respondent submit that the Parties are inclined to settle the matter, however the Respondent has not provided a settlement schedule acceptable to the Petitioner. The Counsel for the Respondent states that as per the Agreement it was required to only supply finished boulders in return for the material supplied by the Petitioner. The Petitioner disagrees. However, the Respondent states that it needs at least 4 months to make the payments and settle the matter. Although the Petitioner is willing to settle the matter amicably, the Counsel for the Petitioner submits that the same must be done within a limited period of time. We are not giving any findings on merits as the parties have come forward to settle the matter.

In light of the above as also the current grim economic scenario, and in spite of the argument of the Petitioner that it is a fit case for admission, we are of the considered view that the Respondent's plea that it be given some more time to repay the debt needs to be accepted, and the Respondent/Corporate Debtor be directed to settle the debt at the earliest in consultation with the Petitioner/Operational Creditor.

In the result, C.P. (IB) No. 232/BB/2019 is disposed of by directing the Respondent/Corporate Debtor to repay the debt or the amount as settled with the Petitioner within a period of four months, failing which, the Petitioner would be at liberty to file a fresh petition for admission. No order as to costs.