Horizon Agrotech vs Uttara Foods And Feeds Private Limited

Per: Shyam Babu Gautam, Member (Technical)

This Company Petition is filed under section 9 (“the Petition”) of the Insolvency and Bankruptcy Code, 2016 (IBC) by Horizon Agrotech ("the Operational Creditor"), seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Uttara Foods And Feeds Private Limited ("the Corporate Debtor").

The Corporate Debtor was incorporated 04/06/1996 under the Companies Act, 1956. It has its registered Office situated at Venkateshwara House, S. No. 114A2, Pune Sinhagad Road, Pune -411030 Mh Therefore, this Bench has jurisdiction to deal with this petition.

The present petition was filed on 21.06.2019 before this Adjudicating Authority (AA) on the ground that the Corporate Debtor failed to make payment of a sum of INR 2,35,476/- (INR Two lakhs Thirty-Five thousand Four hundred Seventy-six only) towards goods being “Animal Feed Product”, provided to Corporate Debtor and subsequent invoices raised by Operational Creditor along with interest at the rate of 30% p.a. from the date of the Invoice /Bill of Supply raised by the Operational Creditor against the supply of goods provided by the Operational Creditor to the Corporate Debtor. The date of default is 15.12.2016.

The Counsel for the Operational Creditor submits that the Operational Creditor from time to time provided goods to the Corporate Debtor and subsequently raised Invoices/ Bills of Supply, amounting to Rs.8,40,005/- (Rupees Eight lakhs Forty thousand Five hundred only) against supply of such services. Copies of the Invoices raised are marked and annexed to this Petition as Exhibit – C (pgs 16-36).

The Operational Creditor further submits that the Corporate Debtor, has paid an amount of Rs.6,04,529/- (Rupees Six lakhs Four thousand and Five hundred Twenty-Nine only) against the aforesaid consideration of Rs.8,40,005/- over a period of time through State Bank of India, Cidco Colony (Vilholi) Branch, maintained with the said Bank. The Certified Bank statement of State Bank of India also indicates the payment received from the Corporate Debtor. Copies of Bank Statements are annexed to the Petition and marked as Exhibit -D (pgs 37-424). However, the balance consideration of Rs.2,35,476/- (Rupees Two lakh Thirty-Five thousand Four hundred Seventy-Six only) is due and payable by the Corporate Debtor.

The Operational Creditor further submits that the liability to pay was admitted by the Corporate Debtor through the Purchase Orders raised by them upon Operational Creditor. Furthermore, the partial payment of Rs.6,04,529/- made by the Corporate Debtor to the Operational Creditor amounts to admission of liability. Moreover, till date the Corporate Debtor has not raised any quality issues as far as the goods are concerned.

The Operational Creditor raised the following Invoices on Corporate Debtor on the following dates:

Out of the aforesaid amounts mentioned in the Tax Invoices, Corporate Debtor made payment of Rs.6,04,529/- on following dates:

The Operational Creditor submits that they addressed various communications to Corporate Debtor asking for payments to be made. The Operational Creditor craves leave to refer to and rely upon the relevant communication as and when required.

It is further submitted that pursuant to the goods provided by the Operational Creditor and subsequent Invoices raised as mentioned above, an amount of Rs.2,35,476/- (Rupees Two lakh Thirty-Five thousand Four hundred Seventy-Six only) remained due from the Corporate Debtor along with interest at the rate of 30% p.a. from the date of last payment received till the realization of the outstanding dues.

A Demand Notice under Sec.8 of the IB Code, 2016 dated 19.02.2019 was issued to the Corporate Debtor to clear the debt of Rs.2,35,466/-. Copy of the Demand Notice is annexed to the Petition and marked as Exhibit – E (pg 425-434) along with the Courier tracking receipt evidencing the delivery of the Demand Notice upon the Corporate Debtor.

The Corporate Debtor has not replied the Demand Notice and hence not brought to the notice of the Operational Creditor (a) the existence of dispute, if any, and record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute; and (b) the repayment of unpaid operational debt (i) by sending an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the Corporate Debtor ; or (ii) by sending an attested copy of record that the operational creditor has encashed a cheque issued by the Corporate Debtor, as per Section 8(2) of the Code. Till date, the Corporate Debtor has made no payment towards the Invoices raised upon them other than the payment specifically mentioned hereinabove. The payment was made on the due date of the Invoice raised. The first tax Invoice was raised on 21.01.2014 of Rs.11,250/- and the last Invoice was raised on 09.02.2015 for Rs.43,130/-, and the last payment made by the Corporate Debtor was on 15.12.2016. Ledger Account for the years 2013-14, 2014-15, 2015-16 & 2016-17 are annexed to the Petition as Exhibit – F – colly (pgs. 435-437).

The Corporate Debtor states that the Company Petition is hopelessly barred by limitation, and thus ought to be dismissed.

The Corporate Debtor submits that the Operational Creditor has alleged Rs.2,35,476/- was due from the following invoices raised by them:

The Corporate Debtor submits that from the perusal of the invoices it is evident that the last invoice was raised on 09.02.2015, and payment for the last invoice was due by 11.03.2015. The Company Petition was filed on 10.05.2019 i.e. beyond the three years of law of limitation, and thus the Company Petition is hopelessly barred by limitation.

The Corporate Debtor further submits that the Operational Creditor has sought to allege that the Corporate Debtor has made partial payment of Rs.6,04,529/- towards the abovementioned invoices, and has provided the details of the payments made. The Corporate Debtor further states that it is evident that the payments made are not partial, but complete payments, which is evident from the following table:

The Corporate Debtor submits that from the above Table, it is evident that the payments directed to respective invoice(s) have been made, and not partial payments in general towards all the above-mentioned invoices. The payments of Rs.30,390 made on 06.06.2014 is the exact value of the combined invoice value of Invoices at Serial Nos. 1 to 3, and could not have been partial payments towards invoices at serial Nos.12 to 21, which were raised subsequent to 06.06.2014. Further, payment of Rs.25,205/- made on 11.07.2014 is the exact value of the combined invoice value of Invoices at Serial No.4 and 5 and could not have been partial payments towards invoices at Serial Nos. 15 to 21, which were raised after 11.07.2014. Further, it is evident that the entire payment for Invoices at Sr.Nos.1 to 16 have been made (barring invoice at Sr.No.13 and 15, for which amount was discounted due to wrongful billing). Thus, the Operational Creditor’s grievance could only be towards Invoices at Sr. No.17 to 21. As the Invoices were raised more than three years prior to the filing of the Company Petition, the Petition is barred by limitation, and ought to be dismissed.

The Corporate Debtor submits that the Operational Creditor has alleged that the Corporate Debtor is liable to pay interest at the rate of 30% p.a. from the date of last payment received till the date of realization of outstanding dues. It is further submitted that the Corporate Debtor never agreed upon the said rate of interest, and the Petitioner cannot unilaterally charge such rate of interest. Further, Section 5(8) of the I&B Code defines “financial debt” as ‘debt along with interest’, Section 5(21) of the Code, in its definition of ‘operational debt’ does not include, hence it is alleged that no interest is payable.

With reference to Part IV (1), the Corporate Debtor denies that an amount of Rs.2,35,476/- or any amount is due to the Petitioner along with interest at the rate of 30% p.a. from the date of last payment received till the date of realization of alleged outstanding dues.

The Corporate Debtor also denies that an amount of Rs.8,40,005/- is payable pursuant to the goods provided by the Operational Creditor. The Corporate Debtor states that it is evident from the above table that the payments have been made regularly for the invoices raised and no ad-hoc payments towards alleged amount claimed to be due. Since the claim is a time barred by limitation, the Financial Creditor desperately making attempt to club all the invoices.

It is also denied that out of the aforesaid consideration of Rs.8,40,005/-an amount of Rs.6,04,529/- was paid by the Corporate Debtor to the Operational Creditor over a period of time, as at no point of time an amount of Rs.8,40,005/- was due hence, there is no question of Rs.6,04,529/- being paid towards the consideration of Rs.8,40,005/-.

The Corporate Debtor denies that balance consideration of Rs.2,35,476/- is due to the Operational Creditor.

The Corporate Debtor states that it is correct that the Operational Creditor raised invoices on the Corporate Debtor, and the Corporate Debtor made the payment of Rs.6,04,529/- in the manner as per the table provided therein. It is submitted that it is evident on a bare perusal of the amount payable as per each invoice and the amount of payment made by the Corporate Debtor, were towards the entire payment of the invoices and not partial payment has been sought, thus the last payment made on 15.12.2016 cannot extend the period of limitation.

With reference to Part IV (2), it is denied that pursuant to the goods provided by the Operational Creditor, a balance of amount of Rs.2,35,476/- is due with interest at the rate of 30% p.a. from the last date of the payment. It is also denied that the date on which default occurred was 15.12.2016.

We have heard the submissions of the Counsels and perused the records.

Upon perusal of records it is noted that the invoices attached with the petition are of 2015 and petition was filed in 2019 therefore the debt is time barred. Hence on account of prima facie observation debt being time barred there is no need to further go into merits of the case.

The petition bearing CP (IB) 2385/MB/C-I/2019 filed by Horizon Agrotech, the Operational Creditor, under section 9 of the IBC read with rule 6(1) of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiating Corporate Insolvency Resolution Process (CIRP) against Uttara Foods and Feeds Private Limited [CIN: U15332MH1996PTC099964], the Corporate Debtor, is Rejected.