Ganges Internationale Private Limited vs Harsha Abakus Solar Private Limited

The Operational Creditor is engaged in the business of Steel manufacturing and a service division which deals in manufacturing of Telecom Towers, Transmission Lines and Solar Module Mounting Solutions.

The Corporate Debtor is into the business of providing comprehensive complete turnkey solutions to all Solar Photovoltaic requirements. Hence, for the same the Corporate Debtor was in search of a reputed company having vast experience and expertise in the Solar Industry and issued a letter of Award dated 16.11.2017 for supply of 2x21 Fix Tilt Module Mounting Structure and Hardware for 65MW for their Project in Virudhunagar, Tamilnadu. Purchase order dated 18.11.2017 was issued by Corporate Debtor to Operational Creditor.

The Operational Creditor had undertaken the entire work as per the Letter of Award and Purchase order. The Operational Creditor issued various invoices to raise its payment which were enclosed as proof. The last invoice issued on 24.07.2018 of Rs. 25,80,877/- .

Despite various reminders, emails and meetings the Corporate Debtor failed to make payment. Hence, the Operational Creditor had issued notice for payment of dues amounting to Rs.2,06,41,885 dated 14.11.2018, the Corporate debtor as per the applicant neither disputed to the facts of dues nor paid.

The respondent had sent a reply to the notice on 21.11.2018 in which disputes relating to quality and schedule of delivery are mentioned. The Applicant also has attached various Whatsaap communication between the CEO of the respondent and the representative of the applicant. As no further repayments were made, Operational Creditor issued Demand Notice dated 17.01.2020 under Insolvency and Bankruptcy Code, 2016 for an amount of Rs. 2,56,00,364/- . The said notice was replied by the Corporate Debtor on 29.01.2020 through its Advocate.

In spite of repeated requests and reminders by the Operational Creditor, the Corporate Debtor failed to pay the outstanding amount. Thereafter, the Operational Creditor issued a demand notice dated 14.11.2018 but the Corporate Debtor neither replied to the demand notice nor paid the outstanding amount. The applicant had filed a Writ Petition before the Hon’ble Gujarat High Court, under Arbitration Act, No.156 of 2019 against the respondent which was withdrawn as not pressed by the applicant.

There is no amount due and payable as claimed by the Operational Creditor and denied the default. It is further submitted that inspite of making advance payment to the applicant towards the supply of materials timely, the Operational Creditor gave false assurance that the supply schedule shall be met. The respondent continuously followed-up with the applicant, however, the supply of materials not as per the schedule. Hence, the respondent has stated that it was compelled to purchase material on high rate from other source to complete the installation of the solar plant within time frame. As per the LOA that Applicant shall pay liquidated damages for delay in delivery of the materials from the fixed delivery schedule. In the present case, as per respondent there is huge delay in the supply of the materials by the Applicant and hence is liable to pay liquidated damages, penalties etc.

The respondent listed in its submissions the following points:

Delayed supply;

CD was compelled to short close the order due to delay in delivery resulting into procurement of materials from other Vendors at a higher rate; and

It is further submitted that the Applicant issued first Demand notice under the IB Code on 10.12.2018 and not on 14.11.2018 as mentioned and annexed with the application. The said application has never been served to the respondent, which was received on 10.12.2018 which was replied vide notice of dispute dated 21.12.2018. After issuance of first demand notice dated 06.05.2019 to NLC India Limited, the Company requested to withhold the payment due to the Respondent Company which was replied/disputed by the Respondent Company vide reply dated 15.05.2019.

It is submitted by the respondent that applicant filed a Civil Suit before Small Causes Court at Ahmedabad which was then transferred to Commercial Court at Ahmedabad on 24.05.2019 and the same was objected by the respondent by filing appropriate reply in the said proceedings. The suit before the Commercial Court was pending and the Applicant filed a petition under the Arbitration Act being IAAP No. 156 of 2019 in October, 2019 before the Hon’ble High Court of Gujarat at Ahmedabad which was withdrawn on 13.12.2019.

After withdrawal of the Arbitration petition, the applicant had issued second Demand Notice under the provisions of IB Code, 2016 on 17.01.2020 which was replied by the Respondent Company vide notice of Dispute dated 29.01.2020. After a period of one and half years viz. in August 2021, the Applicant preferred the present Insolvency application before this Tribunal. It is also stated that the amount claimed is disputed and objected. The Applicant has withdrawn the said suit on 18.10.2021 during the pendency of this application. It is also to state that the present application is barred by limitation and deserves to be dismissed as the claim has been raised by the Applicant for the period April, 2018 to July 2018 which is barred by limitation. Hence, the present petition is filed with malafide intention to extort money and create undue pressure on the Respondent Company which is nothing but abuse of process of law.

The Respondent Company whose name is stated to have been changed to Harsha Engineering International Pvt. Ltd. Further stated that it is a going concern, with sufficient capital and turnover of more than Rs.64 Crores approx. for the year ended on 31.03.2020 become a listed company in NSE. The Respondent Company is employing more than 100 employees directly as well as indirectly. The Company is regularly paying statutory dues. The present Application has no legal base for seeking resolution of the Company but to pressuring tactics for recovery of money. Hence, requested to dismiss the application.

The applicant has further stated (by way of an annexed table of cost incurred and to be received) that they had made a payment of Rs.14,11,48,688/- out of the total invoices received from the applicant and after debit to various shortfalls including non-supply, late receipt and less weight etc., an amount of Rs.1.52 crores (liquidated damages) is to be received from applicant thereby there was a net amount difference of Rs.91,589/- to be received from the applicant.

Further as per the respondent, the doctrine of election applies to the operational creditor who has initiated various litigations in various forums since 2018-2021 when case was pending. The respondent has submitted his reply in various forums including the Arbitration Process and reiterates that there is a dispute before this Tribunal.

Respondent has also submitted various judgments in support of his denying the debt due to pre-existing disputes which was raised before issue of stated demand notice.