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Judgment
ORDER
The case is fixed for pronouncement of the order.
The order is pronounced in open Court vide separate sheet.
Per: M.P. Tiwari (Member J)
This petition is filed on 12.03.2024, by Mr. Priyanshu Kandhway, Authorized Representative of M/s HPL Electric & Power Limited (Applicant) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (the ‘Code’) for initiating Corporate Insolvency Resolution Process (‘CIRP’) against M/s CU Energies Limited (Respondent/ Corporate Debtor). The default amount as mentioned in Part IV of the application is Rs.4,93,27,461/- (Principal Amount Rs.4,51,32,230/- with an interest Amount Rs. 41,95,231/-).
The averments made by the applicant in its petition and presented/argued by the learned counsel for the applicant are summarized hereunder:
The operational creditor is engaged in manufacturing of multi-product electric equipment and is an established player in the electrical equipment industry and one of the largest manufacturers of Energy Meters, LV switchgear, Circuit breakers LED Lights Wires, Luminaries etc.
The Corporate Debtor is engaged in developing and constructing renewable electric power generation systems and designs customized solar energy systems, wind power, hydro-electric power system etc.
The applicant has supplied various electric and electronic goods to the Corporate Debtor since 2019. The supplies were either directly payable by the Corporate Debtor to the Operational Creditor or in nature of channel financing (i.e. the Operational Creditor gets the invoice discounted under channel finance from Tata Capital and the Corporate Debtor has to directly pay to Tata Capital).
The applicant raised 47 invoices to the tune of Rs. 4,77,48,766/- which were issued during the period from 01.04.2022 to 31.12.2022. Out of the said 47 invoices, 25 invoices were under channel financing facility, a payment of Rs.2,88,86,328/- was received by the applicant after discounting from Tata Capital. Further, owing to default by respondent in honoring its payment obligations on invoices under channel financing, the Tata Capital recovered Rs.2,10,14,536/- from the applicant. Therefore, considering the same it becomes clear that the respondent made payment of only Rs.78,71,792/- as against its entire obligation. Subsequent, to the said adjustment of Rs.78,71,792/- from the total outstanding, the invoices from 30.06.2022 onwards remained outstanding.
The present application relates to the supplies that have been made during the period 30.06.2022 to 31.12.2022 for which 42 invoices were raised amounting to Rs.4,51,32,230/-, against which no payment has been received from the respondent.
The goods supplied were accepted by the respondent without any demur and protest. The said goods were duly delivered by the applicant. However, the respondent defaulted in honoring payments required towards the invoices against the said supplies.
Further, the invoices contained a clause for payment of interest at the rate of 15% p.a. on the amount not under channel financing. Therefore, the interest on the said 42 invoices amounted to Rs.41,95,231/-.
The respondent has issued two cheques of Rs. 2,41,67,466/-and Rs.2,09,64,764/- respectively, in favor of the applicant, however, the same got dishonored when presented for payment on 25.05.2023.
The applicant has sent various reminders to the respondent, however, the respondent failed to make the payment. Therefore, the applicant sent a demand notice dated 17.11.2023 under section 8 of the Code. The said notice was delivered on 29.11.2023 as per the tracking report annexed to the petition. However, the respondent neither replied to the said notice nor made any payment.
Thus the applicant filed the present application under section 9 of the Code to initiate CIRP against the respondent.
Despite serving notices through registered post and through e-mail, the respondent never appeared, therefore, this Adjudicating Authority vide order dated 04.04.2025 directed to proceed ex-parte.
We have heard the learned counsel for the applicant and have perused the material available on record. It is noted that the applicant supplied electric and electronic goods to the respondent which were either directly paid by the respondent or through channel financing i.e. the applicant gets the invoice discounted under channel finance from Tata Capital and the respondent directly pays to Tata Capital; however, in the event of failure of respondent to pay the said amount, then the said payment along with charges is to be paid by the applicant.
It is noted that during the period 30.06.2022 to 31.12.2022 the applicant supplied goods to the respondent against which the applicant raised 42 invoices amounting to Rs.4,51,32,230/-. It is noted that the respondent issued two cheques dated 23.05.2023 amounting to Rs. 2,41,67,466/- and Rs. 2,09,64,764/- to the applicant, however, same got dishonored on 24.05.2023.
It is further noted that the invoices raised by the applicant contains interest clause wherein it is specifically mention on the invoice that “interest @ 15% p.a. will be charged if the bill is not paid within 45 days from the date of invoice”.
Considering the above, we find that the respondent defaulted in making the payment. The claim of the applicant stands established and prima facie there is default in payment of the amount due to the applicant without any dispute in existence. Moreover, the claim of applicant is not contested by the respondent in spite of various opportunities given, which amounts to admission of debt. The Corporate Debtor did not respond under section 8(2) of the IBC, 2016 to the notice under section 8(1) of the IBC, 2016 and therefore it is not a case of existence of a dispute, or pendency of the suit or arbitration proceedings before the receipt of such a notice.
The default amount meets the threshold limit as per Section 4 of the IB Code, 2016 and the application is well within the limitation.
In the view of facts, it is clear that respondent has defaulted in the payment of its debts and no pre-existing dispute is established. On the basis of the facts the application is otherwise defect free & on record. Accordingly, we admit this application and order as under:
Corporate Debtor M/s CU Energies Limited is admitted in the Corporate Insolvency Resolution Process under section 9 of the Insolvency & Bankruptcy Code, 2016.
The moratorium under section 14 of the Insolvency & Bankruptcy Code, 2016 is declared for prohibiting all of the following in terms of Section 14(1) of the Code.
(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 Securitisation 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.
The order of moratorium shall have effect from the date of this order till the completion of the Corporate Insolvency Resolution Process or until this Adjudicating Authority approves the Resolution Plan under sub-section (1) of the Section 31 or passes an order for liquidation of Corporate Debtor Company under Section 33 of the IBC, 2016, as the case may be.
The Operational Creditor has proposed the name of the IRP, therefore, this Adjudicating Authority hereby appoints the IRP Mr. Navin Khandelwal having registration No. IBBI/IPA-001/IP-P00703/2017-18/11301 to act as an IRP under Section 13(1) (c) of the IBC, 2016. Form 2 being written communication by the proposed IRP dated 02.12.2023 is enclosed with the application.
The IRP so appointed shall make a public announcement of initiation of Corporate Insolvency Resolution Process (CIRP) and call for submission of claims under Section 15 as required by Section 13(1) (b) of the Code.
The supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period. The corporate debtor to provide effective assistance to the IRP as and when he takes charge of the assets and management of the corporate debtor.
The IRP shall perform all his functions as contemplated, inter-alia, by sections 17, 18, 20 & 21 of the Code. It is further made clear that all personnel connected with Corporate Debtor, its Promoter or any other person associated with management of the Corporate Debtor are under legal obligation under Section 19 of the Code extending every assistance and co-operation to the Interim Resolution Professional. Where any personnel of the Corporate Debtor, its Promoter or any other person, is required to assist or co-operate with IRP, do not assist or Co-operate, the IRP is at liberty to make appropriate application to this Adjudicating Authority with a prayer for passing an appropriate order.
The IRP shall be under duty to protect and preserve the value of the property of the ‘Corporate Debtor Company’ and manage the operations of the Corporate Debtor Company as a going concern as a part of obligation imposed by Section 20 of the Insolvency & Bankruptcy Code, 2016.
The Operational Creditor is directed to pay an advance of Rs. 1,00,000/- (Rupees one lakh only) to the IRP within two weeks from the date of receipt of this order for the purpose of smooth conduct of Corporate Insolvency Resolution Process (CIRP) and IRP to file proof of receipt of such amount to this Adjudicating Authority along with First Progress Report. Subsequently, the IRP may raise further demands for Interim funds, which shall be provided as per Rules. (x) The Registry is directed to communicate a copy of this order to the Operational Creditor, Corporate Debtor and to the Interim Resolution Professional and the concerned Registrar of Companies, after completion of necessary formalities, within seven working days and upload the same on website immediately after pronouncement of the order.
The IRP shall also serve a copy of this order to the various departments such as Income Tax, GST, State Trade Tax and Provident Fund etc. who are likely to have their claim against Corporate Debtor as well as to the trade unions/ employee’s associations so that they are timely informed about the initiation of CIRP against the corporate debtor.
Accordingly, CP(IB) 12 of 2024 is allowed.