Enkem Engineers Private Limited vs Eastern Common Effluent Treatment Company Private Limited

Per: R. SUCHARITHA, MEMBER (JUDICIAL)

Under consideration this Petition is filed by Enkem Engineers Private Limited registered under Companies Act, 1956 bearing CIN No.U34200TN1985PTC012009 represented by Mr. P.Subramani, authorized representative backed by Board Resolution dated 20.05.2019, enclosed at Page No.43 of the Application. This Application is filed by Operational Creditor under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016) for initiation of Corporate Insolvency Resolution Process (CIRP) against Eastern Common Effluent Treatment Company Pvt Ltd.

The Corporate Debtor herein bearing CIN No.U09000TZ2004PTC011169 registered under Companies Act, 1956 having its registered office at SF No. 3/1 and 4/2, KasipalayamVijayapuram Post, Nallur, Tirupur, Coimbatore – 641 606.

From, Part- III of the Application it can be seen that the Operational Creditor had not proposed the name of the IRP and had left it to the discretion of this Tribunal. Further From Part IV of the Application it can be seen that, the Operational Creditor had claimed Rs. 46,04,000/- (Rupees Forty Six Lakhs and Four Thousand only) to be the total debt amount claimed. The date of default as mentioned in Part IV of the application is 07.04.2018.

From, Part- V of the Application it can be seen that the Applicant has placed the following list of documents:

Learned Counsel for the Petitioner states that IBA/765/2019 was filed on 24.05.2019for a sum of Rs. 46,04,000/- due and payable by the Corporate Debtor. He further states that this amount is arrived at several invoices were raised for various operational debts and the Corporate Debtor has failed to honour the payment. The said invoices are enclosed from Page Nos.62 to 73 of the typed set of the application.

It was submitted by the Learned Counsel for the Operational Creditor that since no payment was forthcoming from the Corporate Debtor, the Operational Creditor has issued a Demand Notice under Section 8 of IBC, 2016 to the Corporate Debtor on 26.04.2019, which was delivered to the Corporate Debtor on 30.04.2019. Further, the Operational Creditor has also filed an Affidavit as mandated under Section 9(3)(b) of IBC, 2016 stating that the Corporate Debtor after the receipt of the Demand Notice has failed to pay the unpaid 'operational debt' nor raised any dispute in relation to the same. Under such circumstances, the Operational Creditor has filed the present Application before this Tribunal on 24.05.2019 seeking initiation of CIRP as against the Corporate Debtor.

In relation to the Corporate Debtor, it is seen from the records that there was no appearance on the part of the Corporate Debtor and this Tribunal passed ex-parte order dated 21.08.2019against the Corporate Debtor.

Heard the submissions made by the Learned Counsel for the Operational Creditor. From the records it is seen that this Tribunal Vide order dated 07.01.2020 wherein the Operational Creditor filed a Memo of Withdrawal by stating that the Corporate Debtor had paid part payments of Rs.20,00,000/- as against the claim of Rs.46,04,000/- and the Corporate Debtor had agreed to pay the remaining amount according to the Schedule as agreed between the Operational Creditor and the Corporate Debtor.It was further represented by the Learned Counsel for the Operational Creditor that in case of failure on the part of the Corporate Debtor to pay the remaining amount, the Petitioner to be at liberty to file a fresh case against the Corporate Debtor and to approach this Tribunal.

Upon considering the submissions made by the Learned Counsel for the Operational Creditor as well as the memo filed on behalf of the Operational Creditor, Tribunal held that this petition i.e.IBA/765/2019 stands dismissed as withdrawn.

Since the Corporate Debtor has failed to honour the remaining payment of Rs.26,04,000/-as per the memo stated above and IBA/765/2019 was dismissed as withdrawn, the Learned Counsel for the Operational Creditor is left with no other option to file a revival application bearing IA/2/CHE/2022 for reviving the IBA/765/2019. Thereafter, this Tribunal vide order dated 04.03.2022 allowed the revival application. Hence the present application IBA/765/2019 is taken on record.

Thus from the records, it is categorically clear that there is no pre-existing dispute between the parties and the Corporate Debtor failed to pay the remaining outstanding amount of Rs.26,04,000/- (Twenty Six Lakhs Four Thousand Only) which is due and payable to the Operational Creditor. This Tribunal is of the considered view that there is a debt and default on the part of the Corporate Debtor.

Further, it is also pertinent to note that the default arising in the present Application is much prior to the advent of the Covid-19 pandemic and hence the Corporate Debtor also cannot seek shelter under Section 10A of IBC, 2016. Under the said circumstances, this Tribunal is left with no other option than to proceed with the present case and initiate the Corporate Insolvency Resolution Process in relation to the Corporate Debtor.

Thus we are constrained to admit this Application and initiate Corporate Insolvency Resolution Process against the Corporate Debtor under Section 9 of the IBC, 2016. As a consequence of the Application being admitted in terms of Section 9 (5) of the Code, the moratorium as envisaged under the provisions of Section 14(1) and as extracted hereunder shall follow in relation to the Corporate Debtor:

However, during the pendency of the moratorium period in terms of Section 14(2) (2A) and 14(3) as extracted hereunder:

The duration of the period of moratorium shall be as provided in Section 14(4) of the Code and for ready reference reproduced as follows:

Since the Operational Creditor has not named the Insolvency Resolution Professional, this Tribunal based on the latest list furnished by Insolvency and Bankruptcy Board of applicable for the period between Jan 2022 – June 2022 appoints Mr. Vanangamudi J having Registration Number IBBI/IPA-002/IP-N00903/2019-2020/12891(email Id :[email protected])as the “Interim Resolution Professional” subject to the condition that no disciplinary proceedings are pending against such an Interim Resolution Professional named and disclosures as required under IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 are made within a period of one week from the date of this order.

The IRP is directed to take charge of the Corporate Debtor’s management immediately. The IRP is also directed to cause public announcement as prescribed under Section 15 of the IBC, 2016 within three days from the date the copy of this Order is received, and call for submissions of claim by the creditors in the manner as prescribed under Regulation 6 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

The IRP appointed shall take in this regard such other and further steps as are required under the Statute, more specifically in terms of Section 15, 17, 18 of the IBC, 2016 and file his report within 30 days before this Bench. The powers of the Board of Directors of the Corporate Debtor shall stand superseded as a consequence of the initiation of the CIRP in relation to the Corporate Debtor in terms of the provisions of IBC, 2016.

The IRP shall comply with the provisions of Sections 13 (2), 15, 17 & 18 of the Code. The Directors of the Corporate Debtor, its Promoters or any person associated with the management of the Corporate Debtor are/is directed to extend all assistance and cooperation to the IRP as stipulated under Section 19 of IBC, 2016 for the purpose of discharging his functions under Section 20 of IBC, 2016.

The IRP shall conduct the Corporate Insolvency Resolution Process in respect of the Corporate Debtor as stipulated under Chapter VIII of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

The Operational Creditor is directed to pay a sum of Rs.1,00,000/- (Rupees One Lakh Only) to the Interim Resolution Professional upon the Interim Resolution Professional filing the necessary declaration form as required under the provisions of the Code to meet out the expenses to perform the functions assigned to her in accordance to Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

Based on the above terms, the Application stands admitted in terms of Section 9(5) of IBC, 2016 and the moratorium shall come in to effect as of this date. A copy of the Order shall be communicated to the Operational Creditor as well as to the Corporate Debtor above named by the Registry. In addition, a copy of the Order shall also be forwarded to IBBI for its records. Further, the Interim Resolution Professional above named who is figuring in the list of Resolution Professionals forwarded by IBBI be also furnished with copy of this Order forthwith by the Registry, who will also communicate the initiation of the CIRP in relation to the Corporate Debtor to the Registrar of Companies concerned.

The IRP is directed to file the 1^st Progress Report before this Tribunal on or before the 45^th day of initiation of CIRP by this Adjudicating Authority.

Post this IBA/765/2019 for hearing on 26.05.2022.