Haldia Petrochemicals Limited vs VR Commodities Private Limited

The debt had arisen out of the Purchase Order (hereinafter referred to as the "PO") dated 20.04.2022 bearing PO number 3052401 raised by the Operational Creditor upon the Corporate Debtor for supply of 25000 Metric Tonnes (hereinafter referred to as the "MT") of coal for a total ordered value of Rs.20,13,09,500/-.

In terms of the delivery schedule mentioned in Clause 5 of the PO, the Corporate Debtor was to deliver the entire consignment by 04.05.2022 and as per the payment terms stipulated in Clause 4 of the PO, the Operational Creditor was to effect payment to the tune of 30% of the basic value, as advance against submission of proforma invoice along with the PO.

The aforesaid PO was raised by the Operational Creditor on 20.04.2022 and accepted by the Corporate Debtor on the same day. The Corporate Debtor raised an advance invoice dated 20.04.2022 on the Operational Creditor towards 30% advance for a sum of Rs.7,01,62,500/-. As the amount raised in above advance invoice was in excess of 30% of the PO amount, the Operational Creditor proceeded to make payment of Rs.6,03,92,850/- being 30% of the basic value of the total order value of Rs.20,13,09,500/- and after deducting TDS in terms of Section 194Q of the Income Tax Act, 1961, a sum of Rs 603,37,457.15/- was paid on 22.04.2022 vide UTR NO. SBINI22112857494.

The Corporate Debtor accepted the aforesaid advance sum and assured to deliver the consignment in terms of the aforesaid PO, but has failed to comply the terms and conditions pertaining to the PO and till date has not supplied any quantity of coal.

In reply to the Operational Creditor's letters dated 30.05.2022 and 10.06.2022 to refund the aforesaid advance sum of money, the Corporate Debtor vide an email dated 15.06.2022, assured the Operational Creditor that all the pending consignments shall be delivered, but neither delivered any consignment nor refunded the aforesaid advance sum of money. As on date, a sum of Rs.6,03,37,457.15/- as operational debt is due and payable by the Corporate Debtor to the Operational Creditor.

The Operational Creditor in the prescribed from issued a demand notice under section 8 of the IBC, both by e-mail and by registered speed post, demanding from the Corporate Debtor an amount of operational debt to the tune of Rs.603,37,457.15.

Despite receipt of the demand notice, the Operational Creditor has not received any part or portion of the operational debt demanded by the above demand notice from the Corporate Debtor. On or about 05.08.2022, the Corporate Debtor vide an email, requested the Operational Creditor to not initiate any action and stated that the supply of the goods should be completed by August 2022. However, all such assurances were made in vain.

All POs raised by the Operational Creditor were governed by the Agreement dated 14.02.2022, as subsequently amended and each PO contained specific terms relating to quantity, quality, payment, and delivery of coal; however, the Agreement and the Amendment Agreement allowed for mutual adjustments between POs, where necessary.

As per Clause 11 of the 1^st PO, the Operational Creditor was obligated to establish an irrevocable Letter of Credit at sight (hereinafter referred to as the “LC”) for 80% of the net invoice value, allowing for 10% variance in quantity and quality, through a primary bank within two days of accepting the PO. Further, Clause 2.4 of the 1^st PO made the shipment of coal by the Corporate Debtor conditional on the Operational Creditor’s compliance with Clause 11 of the 1^st PO. Contrary to the agreed terms, the Operational Creditor failed to establish the LC as required under Clause 11 of the 1^st PO.

Despite the non-compliance, the Corporate Debtor, in utmost good faith, shipped the coal under the 1^st PO on 06.03.2022 for a value of approximately Rs.22.6 crores, however, no LC was issued, and the Operational Creditor failed to adhere to the stipulated timelines under both the 1st PO and the Agreement dated 14.02.2022. Clause 11.2 of the Agreement dated 14.02.2022 specifically makes timely opening of a clean LC as an essential condition and under Clause 11.3 of the Agreement, such delay entitled the Corporate Debtor to revise the shipment schedule.

After the shipment under the 1st PO, the Corporate Debtor made additional ad hoc supplies to the Operational Creditor based on separate individual requests. Despite prior delays and non-compliance by the Operational Creditor, the Corporate Debtor in utmost good faith and to maintain business relations with the Operational Creditor, fulfilled these supply obligations and raised corresponding invoices.

Accordingly, an invoice for Rs.32,47,26,630/- was raised by the Corporate Debtor under the 1st PO, as they were outstanding. Even after supply of goods under the 1st PO and additional supplies vide separate individual invoices by the Corporate Debtor, the Operational Creditor failed to pay the outstanding amounts. Further, as per the Corporate Debtor's ledger, by 22.04.2022, invoices totalling Rs.77,49,05,975.11 had been issued to the Operational Creditor, against which the Operational Creditor made payments amounting to only Rs.62,12,64,612.17. Consequently, a total sum of Rs.15,36,41,362 remained outstanding as of April 2022, for supplies made under both the 1st PO and the individual supplies.

Subsequently, the Operational Creditor requested cancellation of the 1st PO. Acting on these instructions, the Corporate Debtor cancelled the rakes booked for the 1st PO and was compelled to issue a credit note to the Operational Creditor. From the above, it is evident that there was, in fact, no amount due and payable by the Corporate Debtor.

The Application is liable to be rejected on grounds of non-compliance with Rule 5(2) (a) of the Adjudicating Authority Rules, 2016. The Operational Creditor failed to properly serve the mandatory demand notice in Form 3 or Form 4, as required under the said Rule. The demand notice must be delivered to the Corporate Debtor's registered address by hand, registered/speed post with acknowledgment, or via email to the whole-time director or designated partner or key managerial person, if any. However, the Track consignment report (RW466238600IN), submitted by the Operational Creditor, indicates the notice was only marked as "Out for Delivery" and "not Delivered." Therefore, the demand notice was never actually served at the Corporate Debtor's registered address. Non-service of the demand notice renders the notice invalid in law. Consequently, the Application under Section 9 of the Code, filed on the basis of said notice is liable to be rejected.

This Adjudicating Authority should not entertain the Petition, as it suffers from mala fide suppression and concealment of facts crucial to its adjudication. Suppression of material facts disentitles a party from relief. In the present case, the Operational Creditor has failed to disclose key facts concerning the pre-dispute transactions and the balances due under the 1st PO and subsequent individual supplies. The nature of the agreement and balances due from 1st PO & the additional individual supplies, are very essential in determining, if the Corporate Debtor has defaulted on its obligations, or on the contrary, it is the Operational Creditor, who has always been in default.

The Operational Creditor has selectively presented events, omitting details of its own non-performance, especially the failure to open an LC under the Agreement dated 14.02.2022, and delays in making payments as per the POs. It is only due to these delays that the Corporate Debtor adjusted the claimed amount against pre-existing dues. As of 22.04.2022, an additional amount still remains payable by the Operational Creditor to the Corporate Debtor. The Operational Creditor's deliberate omission of these facts, including the failure to annex the Agreement dated 14.02.2022 itself, is an attempt to mislead this Hon'ble Tribunal and avoid a potential dismissal. The transactional history and payment defaults on the Operational Creditor's part are central to determining, whether any default exists on the part of the Corporate Debtor. In view of this suppression/ distorted material facts, the Petition is liable to be rejected.

The Operational Creditor claims that an amount of Rs.6,03,37,457.15 was due from the Corporate Debtor as on 22.04.2022. However, on the contrary, it is the Operational Creditor, who is liable to pay outstanding amounts to the Corporate Debtor as against the procurement of goods.

Without prejudice to the above, the Corporate Debtor has consistently disputed the Operational Creditor's claims. A clear notice of dispute had been communicated, and the ledger maintained by the Corporate Debtor, which is known to the Operational Creditor, clearly reflects that the Operational Creditor is the defaulting party. In view of the valid pre-existing dispute between the parties at the time of filing, and as per Section 9(5)(ii)(d) of the Code, the Petition needs to be rejected.

The present Petition has been filed solely to pressurize the Corporate Debtor into making payments against non-existent debts. The Operational Creditor has filed the Petition without any cogent reason, which lacks proof of existence of any default on the part of the Corporate Debtor. It is only when the Corporate Debtor declined to honour unjustified claims and adjusted amounts against pre-existing dues, the Operational Creditor resorted to filing this Petition as a coercive measure. Thus, the present Petition preferred by the Operational Creditor is only an attempt to recover the alleged dues and should be rejected in limine.

The Corporate Debtor alleged that subsequent to the Agreement dated 14.02.2022, another Amendment Agreement was also executed, which allowed adjustment against each other, however, the Corporate Debtor has failed to bring on record the said Amendment Agreement.

It is denied that the agreement dated 14.02.2022 was later amended by an Amendment Agreement or under the agreement read with the Amendment Agreement between February 2022 to April 2022.

It is denied that all the POs were issued under the same agreement dated 14.02.2022, which was later also amended by the Amendment Agreement allowing for adjustments against each other as and when required. Under the said Agreement, only the first PO was issued and all goods under the same was delivered by the Corporate Debtor against payment of money by the Operational Creditor.

It is disputed that under Clause 2.4 of the first PO, the shipment of the coal by the Corporate Debtor was subject to the compliance of Clause 11 of the first PO, as alleged or at all.

All compliances under the first PO was duly met, therefore, payment against the goods supplied under the first PO was made by the Operational Creditor.

There was no relation whatsoever between the first PO and the second PO, therefore, the question of allowing adjustments on account of the first PO by the Operational Creditor could not have arisen.

It is denied that as against clause 11 of the first PO, no LC was established by the Operational Creditor in favour of the Corporate Debtor or the Corporate Debtor in utmost good faith on 6.03.2022 shipped the first PO for an approximate value of Rs.22.6 crores or that the Operational Creditor did not adhere to the timelines specified under the first PO or the Agreement dated 14.02.2022, as alleged or at all.

It is denied that after the first PO was raised and shipments made, there were certain further supplies made to the Operational Creditor on an ad hoc basis for which invoices were raised by the Corporate Debtor or that the Corporate Debtor in utmost good faith or to build relations between the Operational Creditor and the Corporate Debtor again honoured its obligations or shipped the goods demanded in these separate individual invoices, as alleged or at all.

It is denied that the Corporate Debtor raised an invoice of Rs.32,47,26,630/- on the Operational Creditor for supply of goods under the first PO, as they were outstanding or that even after supply of goods under the first PO or additional supplies vide separate individual invoice by the Corporate Debtor or the Operational Creditor failed to pay the outstanding amounts, as alleged or at all.

There was nothing due and payable by the Operational Creditor to the Corporate Debtor under the first PO or otherwise. The issue of adjustment of sums of money raised by the Corporate Debtor and the same being unpaid by the Operational creditor are all moonshine defences in order to mislead this Adjudicating Authority and concoct a case pertaining to pre-existing dispute in order to derail the present proceeding.

The corporate debtor, apart from bald assertions, has failed to bring on record any such contemporaneous documents to demonstrate that any sum is due and payable by the Operational Creditor to the Corporate Debtor.

It is denied that as on April 2022, the Operational Creditor had to pay to the Corporate Debtor an amount of Rs.15,36,41,362/- against the prior goods supplied by the Corporate Debtor to the Operational Creditor. It is disputed that since there was an amount of Rs.15,36,41,362/-, which was payable by the Operational Creditor to the Corporate Debtor owing to the past conduct of the Operational Creditor on making delayed payments, the Corporate Debtor did not make upfront delivery of the goods or requested the Operational Creditor to clear the pending dues or according to the Agreement dated 14.02.2022, the Corporate Debtor had the liberty to alter the shipment schedule arising out of the delayed opening of LC by the Operational Creditor.

It is denied that the Operational Creditor later informed the official of the Corporate Debtor, who was handling the dealing between the Corporate Debtor or the Operational Creditor to cancel the first PO or following the directions given by the Operational Creditor, the Corporate Debtor cancelled the rakes booked for the first PO or owing to the said cancellation the Corporate Debtor was forced to issue a credit note to the Operational Creditor as alleged or at all.

The demand notice under Section 8 of the IBC was duly served upon the Corporate Debtor at its registered address, as would appear from the Company Master Data obtained from the MCA website, a copy of which is annexed as Annexure E to the petition.

Amendment to Agreement dated 14.02.2022 entered between the Corporate Debtor and the Operation Creditor (annexed as Document D-1 of the IA 168/2023.

Financial Statements of the Corporate Debtor (annexed as Document D-2 of the IA 168/2023) evidencing that it is a going concern.

Copy of ledger account of Operational Creditor maintained in the books of the Operational Creditor, which is annexed as Document D-3 of the IA 168/2023.

Copy of invoices (annexed as Document D-4 of the IA 168/2023) raised by Corporate Debtor upon the Operational Creditor.

The Corporate Debtor has failed to aver as to why additional documents are relevant for the adjudication of the present dispute at hand.

It is trite law that a party seeking leave to bring on record additional documents needs to justify dispute. and/ or substantiate the relevance of such documents for adjudication.

The IA 168/2023 does not contain any such pleading, which would necessitate bringing on record purported documents, as has been sought to be relied by the corporate debtor.

The debt in the present case has arisen out of the PO No. 3052401 dated 20.04.2022, which is a standalone PO and is separate and distinct from all the transactions that took place between the Operational Creditor and the Corporate Debtor in the past.

Prior to the issuance of the said PO, the Operational Creditor issued upon the Corporate Debtor, another PO bearing PO No. 3052095 dated 22.02.2022. The Amendment Agreement dated 14.02.2022, which the Corporate Debtor seeks to rely upon pertains to the first PO and categorically finds mention of the same in the Amendment Agreement. Such fact goes on to clearly demonstrate that inasmuch as the operational debt in the company petition has arisen vis-a-vis the said PO, the Amendment Agreement pertaining to the first PO is of no consequence and/ or relevance to the present dispute.

With respect to the financial statement relied upon by the Corporate Debtor, the Operational Creditor states that operational debt has fallen due on the part of the Corporate Debtor. Therefore, reliance on the financial statement to evince that the Corporate Debtor is a going concern will not come to aid of the Corporate Debtor.

The purported ledger account is a document, which has been unilaterally prepared by the Corporate Debtor to suit its own interest and the same has also not been reconciled by the Operational Creditor and thus merits no consideration while adjudicating the present dispute.

The Corporate Debtor has, not only failed to supply coal under the said PO, but has also failed to return the advance amount taken in lieu thereof. In this regard, the Operational Creditor relies upon the email of the Corporate Debtor dated 05.08.2022 (annexed as Annexure-G to the Petition), where they have categorically expressed their inability to supply coals in terms of the said PO and also further proceeds to request the Operational Creditor to not proceed with any official action. By such admission, it can clearly be established that neither have goods been supplied by the Corporate Debtor nor has the advance been returned taken in lieu thereof. The purported adjustment of the sums payable by the Operational Creditor under the first PO with that of the second PO, is a moonshine defence, concocted as an afterthought to scuttle the rigors of the IBC.

IA 168/2023 filed by the Corporate Debtor ought to be rejected and prayers made in the Petition should be allowed.

The Corporate Debtor is a company incorporated under Companies Act, 2013 having CIN No: U52100AP2019PTC113509.

On 14.02.2022, the Operational Creditor and Corporate Debtor entered into an Agreement for supply of non-coking, thermal/ steam coal of Indonesian origin (in bulk) by the Corporate Debtor to the Operational Creditor, which was later amended by an Amendment Agreement between February 2022 to April 2022, under which the Operational Creditor raised in two POs on the Corporate Debtor for supply of Coal as detailed below:

As per clause 6.1 of the Agreement, if the Gross Calorific Value (hereinafter referred to as the "GCV") of the coal is 4200 +/- 100 GAR is taken, then the Corporate Debtor will be eligible to bonus and price adjustment and bonus, penalties and rejection of cargo will be based and determined on the actual analysis done by the Independent Surveyor (SGS/IGI). Further, Clause 6.1.2 of the Amendment Agreement dated 14.02.2022 states as under:

In pursuance of the above, a joint stack sampling of steam coal in bulk lying at WQ-03 Backup Visakhapatnam Port was conducted with an independent surveyor i.e., SGS India Pvt Ltd, Visakhapatnam. Samples were taken from various points of the stacks, thoroughly mixed and after coning and quartering final composite sample was prepared at SGS India Pvt. Ltd, Visakhapatnam and the total moisture analysis jointly held on 12.04.2022 to 13.04.2022 at SGS laboratory, Visakhapatnam as per ASTM D-3302/D3302M method. The joint results of total moisture mentioned in annexure certificate No. C/IGI/C&C/230972/2223/02176, found the GCV to be 4410. A copy of this joint stack sampling report conducted by independent surveyor SGS dated 20.04.2022 attached as Document-1 to the IA 164/2024.

Consequently, as per clause 6 of the Agreement read with clause 6.1.2 of the Amendment Agreement, the Corporate Debtor is eligible to claim the bonus payments from the Operational Creditor, as the GCV is higher than 4300 GAR. Thus, the Corporate Debtor is owed dues from the Operational Creditor towards the bonus payments. The Indian Resident Director Mr. Nanchariya Shivarama Krishna Pulakanam, sent email communications to the Corporate Debtor making a claim towards the additional bonus amount payable by the Operational Creditor to the Corporate Debtor. However, the Operational Creditor till date has never made these payments and has violated the terms of the Agreement.

Subsequently, the Corporate Debtor issued another PO No. 3052401 dated 20.04.2022 for supply of 25000 MT of Coal, having GCV 4200 (ARB) (+/- 100) for a total order value of Rs.20,13,09,500/- (Rupees Twenty Crores Thirteen Lakhs Nine Thousand Five Hundred only).

As per Clause 4.0 of the PO i.e. Payment terms are as under:

Later, the Indian Resident Director of the Corporate Debtor Mr. Nanchariya Shivarama Krishna Pulakanam, had sent email communications to the Operational Creditor submitting the original BIL, certificate of Origin & Insurance Certificate and other vessel nomination details as required under the terms of the 2nd PO.

However, the Operational Creditor failed to honour the payment terms as per the 2nd PO and had not issued the LC for 50% of the order value to VRC. Consequentially, the Corporate Debtor was left with no other option, but to search for another buyer for the cargo and had to incur additional freight and costs for shipping the vessel from the original destined port of Haldia port to Tuticorin port and had even incurred huge losses in the form of demurrages.

The Corporate Debtor has always been abiding by the terms of the PO and it is the Operational Creditor, which has defaulted on its obligations. After the Operational Creditor failed to issue the L/C for 50% of the invoice amount, the Corporate Debtor had to incur additional costs, which dented the financials of the company. Unless the LC is issued, the Corporate Debtor is under no responsibility to supply the cargo. Therefore, the Corporate Debtor is under no liability to return the advance payment of Rs.6,03,92,850/- (Rupees Six Crores Three Lakhs Ninety-Two Thousand Eight Hundred and Fifty only).

When the transactions between the Operational Creditor and the Corporate Debtor were ongoing, Mr. Nanchariya Siva Rama Krishna (Mr. Krishna), was the sole Indian resident director of the Corporate Debtor and was made responsible for overall management and control of the Corporate Debtor. The other director of the Corporate Debtor at the relevant time was Mr. Sukhdev Singh bearing DIN No. 08623180, who operated and continues to operate from Singapore.

By taking undue advantage of the trust reposed by the Corporate Debtor, Mr. Krishna started mismanaging the Corporate Debtor, including by availing personal loans in Corporate Debtor's name, siphoning and diversions of funds from the accounts of Corporate Debtor to other entities, individually owned by him. As a result of these fraudulent transactions, in November 2022, the other Shareholders of the Corporate Debtor holding 99.99% vide board resolution dated 30th November 2022, resolved to remove Mr. Krishna from the position of director of the Corporate Debtor.

Till November 2022, the shareholders and other directors of the Corporate Debtor had sparse knowledge regarding the affairs of Corporate Debtor, as Mr. Krishna was exclusively managing it and were loath to share any information. As a result of this, a lot of the evidence and communications between the Corporate Debtor and the Operational Creditor are unavailable to the other directors and are being discovered as and when possible during the investigation and audit of the Corporate Debtor.

The Corporate Debtor, its management and all other employees were maintaining all its company-based email communications with the service provider Zoho Corporation Private Limited (hereinafter referred to as the "Zoho") and since Mr. Krishna was the only Indian resident Director, the mail server Administrator user rights were solely under the custody of Mr. Krishna.

During the course of hearing held on 21.07.2023, the Counsel for the Corporate Debtor submitted that they are ready to refund the amount after reconciliation or to supply the coal as per the decision of the Operational Creditor. The above proposal of the Corporate Debtor was also agreed by the Counsel of the Operational Creditor and he sought to get the instructions from the client.

Subsequently, during the course of hearing held on 16.08.2023, Counsel for the Operational Creditor informed to have received the mail from the Corporate Debtor wishing to settle the matter and the Counsel for the Corporate Debtor submitted that they would go ahead with the reconciliation expeditiously. However, during the hearing held on 25.08.2023, the Counsel for the Operational Creditor informed that the settlement proposal did not fructify and the matter was listed for hearing. Subsequently, this Adjudicating Authority vide its order dated 22.04.2024 granted the liberty to both the Parties to file the written submissions, which were filed by the Operational Creditor vide Diary No.772 dated 07.06.2024 and Corporate Debtor vide Diary No.810 dated 13.06.2024.

During the course of hearing held on 19.03.2025, it was noted that the Affidavit under section 9(3)(b) of the IBC has not been filed by the Operational Creditor. The Operational Creditor sought one week time to submit the same and subsequently filed the same vide Diary No.582 dated 07.04.2025.

During the course of arguments on 09.04.2025, it was noted based on the submissions of the parties that two POs were issued by the Operational Creditor against which the Corporate Debtor has supplied the coal against the 1st PO and advance amount paid by the Operational Creditor for supply against 2nd PO has been adjusted by the Corporate Debtor for the alleged dues against 1st PO. It was further observed that in view of these facts admitted by both the parties, the limited question, which needs to be examined in this case is: (i) whether the advance amount paid against 2nd PO can be adjusted by the Operational Creditor against dues in 1st PO under the relevant provisions of Contract Act, Sale of goods Act or other provisions of law. (ii) Whether there is any amount due against 1st PO. Both the Counsels sought time to argue these two issues.

During the course of hearing on 05.05.2025, the Counsel of the Operational Creditor relying on Section 59 of the Contract Act, 1872 submitted that where a debtor, owing several distinct debts to one person, makes a payment to him, either with express intimation, or under circumstances implying, that the payment is to be applied to the discharge of some particular debt, the payment, if accepted, must be applied accordingly and the Corporate Debtor sought two days' time to prove that there is a pre-existing dispute between the parties, however on 07.05.2025 the Corporate Debtor reported that they could not trace out the requisite document till date.

On 11.06.2025 after hearing both the parties the Petition as well as both the IAs were reserved for order.

A perusal of the record reveals that the Operational Creditor issued a Demand Notice dated 30.05.2022 and 10.06.2022 in Form-3, in accordance with Section 8 of the IBC via Registered Post, as well as at the email address listed on the MCA portal.

The demand notice sent through Registered Post was returned with the remark "Item returned REFUSED". The extract track consignment filed by the Operational Creditor is reproduced below:

Nevertheless, the email dated 20.07.2022 was successfully delivered.

Accordingly, the service of notice shall be deemed to have been effected.

The one of contention raised by the Corporate Debtor is applicability of the Agreement dated 14.02.2022 and Amendment to the said Agreement to the (2^{\text{nd}}) PO. We observe that both of these are not applicable to the (2^{\text{nd}}) PO (No.3052401 dated 20.04.2022).

As per clause 2 of the Agreement dated 14.02.2022, the shipment quantity is only 25,000 MT +/- 10%, and 25,000 MT has already been supplied by the Corporate Debtor vide (1^{\text{st}}) PO (No. 3052095 dated 22.02.2022). The relevant extract of clause 2 of the Agreement is reproduced below:

Further, the Amendment of Agreement dated 14.02.2022 was made with reference to the Agreement dated 14.02.2022 and PO no.3052401 dated 20.04.2022 and is thus not applicable to the 2nd PO (No. 3052401 dated 20.04.2022). The relevant extract of the Amendment of Agreement is reproduced below:

In reply to the email dated 13.06.2022 and 30.05.2022 of the Operational Creditor regarding non-supply of coal against POs including 1st PO, the Corporate Debtor vide email dated 15.06.2022 has stated that they are going to finish the shipment in coming month, which shows the acknowledge of operational debt by the Corporate Debtor.

However, during the hearing held on 25.08.2023, the Counsel for the Operational Creditor informed that the settlement proposal did not fructify and the matter was listed for hearing.

The Demand Notice in Form 3 was issued by the Operational Creditor on 20.07.2022. The Operation Creditor has filed affidavit under Section 9(3)(b) of the Code vide Diary No.582 dated 07.04.2025 affirming that the Operation Creditor has not received any notice of dispute under the IBC, 2016 in relation to the unpaid operational debt due and payable from the Corporate Debtor.

In view of the discussion above, we are of the considered view that there is no pre-existing dispute between the parties.

Moratorium under section 14 (1) for prohibiting all of the following, namely:

The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgement, 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 the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;

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

The provisions of sub-section of section 14(1) shall not apply to such transactions, agreements or other arrangement, as may be notified by the Central Government in consultation with any financial sector regulator or any other authority; and also, to a surety in a contract of guarantee to a corporate debtor.

The supply of essential goods or services to the Corporate Debtor, as may be specified, shall not be terminated or suspended or interrupted during moratorium period, except where such Corporate Debtor has not paid dues arising from such supply during the moratorium period or in such circumstances, as may be specified.

The order of moratorium shall have effect from the date of this order till the completion of the CIRP or until this Bench approves the resolution plan under sub-section (1) of Section 31 or passes an order for liquidation of the Corporate Debtor under Section 33 as the case may be.

The term of appointment of Mr. Chaitanya Kiran Immaneni, shall be in accordance with the provisions of Section 16(5) of the Code, subject to his written consent to be filed within 7 days of this order;

In terms of Section 17 of the Code, from the date of this appointment, the powers of the Board of Directors shall stand suspended and the management of the affairs shall vest with the IRP and the officers and the managers of the Corporate Debtor shall report to the IRP, who shall be enjoined to exercise all the powers, as are vested with the IRP and strictly perform all the duties as are enjoined on the IRP under Section 18 and other relevant provisions of the Code, including taking control and custody of the assets, over which the Corporate Debtor has ownership rights recorded in the balance sheet of the Corporate Debtor, etc. as provided in Section 18(1)(f) of the Code. The IRP is directed to prepare a complete list of the inventory of assets of the Corporate Debtor;

The IRP shall strictly act in accordance with the Code, all the rules framed thereunder by the Board or the Central Government and in accordance with the Code of Conduct governing his profession and as an Insolvency Professional with high standards of ethics and moral;

The IRP shall cause a public announcement within three days as contemplated under Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 of the initiation of the CIRP in terms of Section 13(1)(b) read with Section 15 of the Code calling for the submission of claims against Corporate Debtor;

The IRP/RP shall prepare the Audited Financial Statements as on date of the CIRP and shall submit before the CoC for consideration.

The IRP/RP shall also ensure that all the assets appearing in the Financial Statements on the CIRP date have been considered in the valuation report. The IRP/RP shall send individual communication through post or electronic means along with a copy of public announcement to all the creditors as per last available books of accounts / financial statements on the CIRP date of Corporate Debtor as prescribed under Regulation 6A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

The Corporate Debtor, its Directors, personnel and the persons associated with the management shall extend all cooperation to the IRP in managing the affairs of the Corporate Debtor as a going concern and extend all cooperation in accessing books and records as well as assets of the Corporate Debtor;

In view of the above mandatory provisions, the suspended directors of the board will ensure that the books of accounts for the eight previous financial years preceding the date of this order be made available to the IRP/ RP within 15 days of the initiation of the CIRP order. The statutory auditor is also directed to share the records maintained by him in the course of the audit of the accounts of the Corporate Debtor for the period of three years prior to the date of initiation of this CIRP order within the same period of 15 days.

In case of any non-cooperation by the Suspended Board of Directors or the statutory auditors, the IRP/RP may take the help of the police authorities to enforce this order. The concerned police authorities are directed to extend help to the IRP/ RP in implementing this order for retrieval of relevant information from the systems of the Corporate Debtor, the IRP/ RP may take the assistance of Digital Forensic Experts empanelled with this Bench for this purpose. The Suspended Board of Directors is also directed to hand over all user IDs and passwords relating to the Corporate Debtor, particularly for government portals, for various compliances. The IRP is also directed to make a specific mention of non-compliance, if any, in this regard in his status report filed before this Adjudicating Authority immediately after a month of the initiation of the CIRP.

The IRP/RP is directed to approach the Government Departments, Banks, Corporate Bodies and other entities with request for information/ documents available with those authorities/ institutions/ others pertaining to the Corporate Debtor, which would be relevant in the CIRP. The Government Departments, Banks, Corporate Bodies and other entities are directed to render the necessary information and cooperation to the IRP/RP to enable him to conduct the CIRP as per law.

The IRP shall, after collation of all the claims received against the Corporate Debtor and the determination of the operational position of the Corporate Debtor constitute a Committee of Creditors and shall file a report, certifying constitution of the Committee to this Adjudicating Authority on or before the expiry of thirty days from the date of his appointment, and shall convene first meeting of the Committee within seven days of filing the report of constitution of the Committee;

The IRP is directed to send a regular progress report to this Adjudicating Authority every fortnight.