Ganesh Ramkisan Rajale vs Panchtatwa Milk Industries Private Limited

[PER: CORAM]

This is an application filed on 07.12.2024 by the Applicant- Mr. Ganesh Ramkisan Rajale (hereinafter also referred to as “Operational Creditor”), who is the sole proprietor of M/s. Swaraj Construction, against the Respondent- Panchtatwa Milk Industries Private Limited (hereinafter also referred to as “Corporate Debtor”), under Section 9 of the Insolvency & Bankruptcy Code 2016 (in short, ‘the Code’) r/w Rule 6 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 with a request to admit the application, commence Corporate Insolvency Resolution Process (CIRP), appoint IRP and declare moratorium for having defaulted in payment of its outstanding dues of INR 10,75,62,728/- (Rupees Ten Crores Seventy-Five Lakhs Sixty-Two Thousand Seven Hundred and Twenty-Eight Only)

On perusal of Part-I of Form 5, it is seen that the present application is filed by Mr. Ganesh Ramkisan Rajale, the sole proprietor of M/s. Swaraj Construction. Further, an affidavit in support of application is affirmed by the above-named proprietor.

A perusal of Part II of the application in Form 5 reveals that the Respondent/Corporate Debtor i.e. M/s. Panchtatwa Milk Industries Private Limited, is a private limited company having its registered office at Gat No. 307, Takali Phata, Pilanwadi, Taluka Daund, District Pune – 412207 with CIN: U40100PN2015PTC156614. The date of incorporation is 30.09.2015.

On perusal of Part-III of Form 5, it appears that the Applicant has proposed the name of Mr. Anurag Jain to be appointed as IRP of the Corporate Debtor in the event that the petition gets admitted. However, on perusal of Form 2 at page 18 of the application, it is seen that the written consent has been obtained from Mr. Vishal Ghisulal Jain for being appointed as the proposed IRP. When this inconsistency was pointed out to the learned Counsel for the Applicant during the course of hearing this petition, the learned Counsel for the Applicant submitted that the Bench may be pleased to appoint the IRP from the panel of Insolvency Professionals maintained by the Insolvency and Bankruptcy Board of India (‘IBBI’).

A perusal of Part IV of the Application vide Form 5 reveals that the total dues as claimed by the Applicant/Operational Creditor is INR 10,75,62,728/-. It is stated in the application at Part IV that M/s. Swaraj Construction is a sole proprietorship concern of the Applicant carrying on the business of civil construction work for setting up milk and milk industries plants. As per the requirements and work contract entered into between the Operational Creditor and the Corporate Debtor, the Applicant has completed civil construction work for setting up milk plant of the Corporate Debtor. Further, as per the work contract, Swaraj Construction submitted its invoices from time to time to the Corporate Debtor in respect of the civil construction work and materials used for the construction work. It has been specifically averred in the application that till 12.05.2023, the Operational Creditor has completed the construction work and raised invoices for an amount of INR 11,76,46,000/- to the Corporate Debtor, and in return, the Corporate Debtor has paid an amount of INR 1,00,83,272/-. Therefore, according to the Applicant, as on date of the demand notice, the total amount due and payable by the Corporate Debtor is INR 10,75,62,728/-.

As stated in Part IV of the Application, the Operational Creditor issued a statutory demand notice dated 31^st March, 2024 in Form 3 as per the provisions of Section 8 of the Code read with Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 to the Corporate Debtor (copy attached at page 43). After the receipt of the said demand notice, the Corporate Debtor has failed to repay the operational debt and also failed to reply to the said notice.

As stated in Part V of the Application, the Operational Creditor has relied upon the following documents which are attached to this application in order to prove the existence of operational debt and the amount in default:

Reply Affidavit dated 21^st February, 2025 (filed on 25.02.2025) affirmed by one Mr. Vishal Panditrao Supekar, who is the Director of the Corporate Debtor. The main contentions of the Respondent/Corporate Debtor are summarised below:

We have heard both the sides and perused the documents placed on record.

On perusal of records, we find that the Work Agreement dated 02.12.2021 was executed between the Applicant and the Respondent. Thereafter, the Applicant had raised the following invoices on the Respondent:

The Ledger Account of the Respondent in the books of accounts of Swaraj Construction, which is annexed at Annexure ‘B’ to the application, is reproduced hereunder:

Thus, on perusal of the ledger statement at Annexure ‘B’ to the application, it is seen that during the FY 2023-24, the aforesaid invoices have been debited to the said ledger account and after giving effect to the payments received from the Respondent, an amount of INR 10,75,62,728.00/- is still due and payable by the Respondent to the Applicant as on 31.03.2024. It is pertinent to note that the Respondent in its reply has neither disputed the invoices nor disputed the aforementioned amount outstanding to the Applicant. In para 2 of the reply, the Respondent had admitted to the outstanding amount. The same is reproduced below:

At Para 17 of the reply, the Respondent has stated that the amount demanded by the Operational Creditor for INR 10,75,62,728/- is due and payable and the Respondent is seeking time to make the payments due to the Operational Creditor.

In our considered view, the aforesaid statements made by the Respondent at Paragraphs 2 and 17 of the Reply Affidavit are nothing but an unequivocal admission of default in payment of operational debt due by the Respondent to the Applicant.

Furthermore, it is not in dispute that the Respondent has not replied to the Demand Notice dated 31.03.2024. Even in the reply affidavit, the Respondent has raised no dispute with regard to the services rendered or claims made by the Applicant. The Applicant has also filed an Affidavit u/s 9(3)(b) of the Code to the effect that there is no notice given by the Corporate Debtor relating to a dispute of the unpaid operational debt. Hence, in the facts and circumstances of the given case, we are satisfied that there is no pre-existing dispute.

1. Section 9(3) of the Code states as follows:

Regulation 20(1A) of the IBBI (Information Utilities) Regulations, 2017 provides that before filing an application to initiate corporate insolvency resolution process under section 7 or 9, as the case may be, the creditor shall file the information of default with the information utility and the information utility shall process the information for the purpose of issuing record of default in accordance with Regulation 21. However, on scrutiny of the application, we find that the Applicant has not annexed the record of default filed with Information Utility (i.e. Form ‘C’ and Form ‘D’) along with the petition.

The Hon’ble National Company Law Appellate Tribunal (‘NCLAT’) in the matter of Vijay Kumar Singhania v. Bank of Baroda and 1 Anr [vide Judgment dated 13^th December, 2023 in Company Appeal (AT)(Insolvency) No. 1058 of 2023], has held, inter-alia, as follows:

Thus, in view of the decision of Hon’ble NCLAT in Vijay Kumar Singhania (supra), furnishing the record of default is not mandatory even after amendment of Regulation 20 by insertion of Regulation 20(1A) of the IBBI (Information Utilities) Regulations, 2017 w.e.f. 14.06.2022. Though the above judgment is in the context of application u/s 7 of the Code, however, the rationale of the said judgment applies to the application u/s 9 as well. It is also pertinent to take note of the fact that no objection has been taken by the Corporate Debtor with respect to non-furnishing of the record of default with the information utility by the Operational Creditor.

In our view the application is complete in terms of Section 9 of the Code. As the Applicant/Operational Creditor has proved that there is debt and despite service of notice under Section 8, the same was not paid by the Respondent/Corporate Debtor. We have also seen that the amount defaulted is more that Rs. 1.00 Cr. which meets the threshold limit as per section 4 of the Code and is well within the limitation for filing the present application. Accordingly, the Application filed under section 9 of the Insolvency and Bankruptcy Code for initiation of corporate insolvency resolution process against the Respondent/Corporate Debtor deserves to be admitted.

Accordingly, in light of the above facts and circumstances, it is hereby ordered as under: -

a. 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;

b. transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein;

c. any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;

d. the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Corporate Debtor;

e. The provisions of sub-section (1) shall however, not apply to such transactions, agreements as may be notified by the Central Government in consultation with any financial sector regulator and to a surety in a contract of guarantee to the Corporate Debtor.