Jet Roadlines (India) Pvt. Ltd. vs EMCO Ltd.

Per M.K. Shrawat, Member (Judicial).

A Petition u/s.9 has been submitted in Form No.5 on 27.07.2018 by the Operational Creditor M/s. Jet Roadlines (India) Pvt. Ltd., against the Corporate Debtor M/s. EMCO Ltd., Jalgaon-425003 for an Operational Debt amount of ₹62,20,321/- Plus Interest @ 18% thereon of ₹15,69,492/- totalling ₹77,89,813/-.

Brief particulars of the case:- The Petitioner/ Operational Creditor is stated to be involved in the business of Supporting and auxiliary transport activities whereas the Corporate Debtor is involved in manufacturing of electric motors, generators and transformers. Petitioner submitted that services were provided to the Corporate Debtor for which Invoices with Delivery Challans were issued. A computation of outstanding Debt amount, placed on record, is reproduced below:-

According to the Petitioner, the Debt amount fell due on 22.11.2016 till 31.03.2018. The Petitioner submitted that it had reminded the Corporate Debtor to pay the outstanding amount but the same had not been paid so far. As a consequence, the Operational Creditor issued Demand Notice in Form No.3 on 14.06.2018 to the Corporate Debtor.

The Petitioner submitted that the Corporate Debtor replied to the Demand Notice vide its Letter dated 22.06.2018 as under:-

The Petitioner, therefore, vehemently argued that in the reply there is no elucidation regarding the outstanding dues and stated that it clearly reflected the blatant attempt by the Corporate Debtor that they are not ready to pay the said outstanding dues.

Copy of the Statement of Bank Account of HDFC Bank Limited for the period from 13.06.2018 to 30.06.2018 in respect of the Operational Creditor is on record. General Ledger Account for the period from 01/04/2015 to 31/03/2019 is also placed on record.

Considering the totality of the facts and circumstances of the case discussed supra, I am of the opinion that the default as defined u/s. 3(12) of The Code is established. Demand Notice has been issued to the Respondent Debtor. The Respondent Debtor, in its reply dated 22.06.2018 supra has only stated that “the information and calculations provided by you and mentioned in the notice are not correct as the amount claimed under notice is not tallying with our books of account”. However, the Corporate Debtor has not taken any serious effort to elucidate/ reconcile the differences of the impugned alleged claim of the Corporate Debtor. The Corporate Debtor also had not provided any information on whether any of the Invoices claimed to be outstanding by the Operational Creditor, had already been paid or “disputed”. This case was first listed on 19.11.2018, 09.01.2019, 06.03.2019, 02.05.2019 and lastly, on 09.07.2019. Even after a lapse of considerable time after First listing of this Petition, no effort to settle the outstanding amount is made by the Corporate Debtor.

As a consequence, keeping the admitted facts in mind that, the Operational Creditor had not received the outstanding Debt from the Corporate Debtor and that the formalities as prescribed under The Code have been completed by the Petitioner/ Operational Creditor, it is my conscientious view that this Petition deserves “Admission”.

The Operational Creditor has proposed the name of the Interim Resolution Professional Mr. Kedar Ramratan Laddha, Registration No. IBBI/IPA-001/IP-P00586/2017-2018/11115, Address: 6/5, Sahayog Appartment, Keshavnagar, Subhashbridge, RTO Circle, Ahmedabad Gujarat, Mobile No. +91-9737533000, Email : [email protected]. The IRP has submitted his consent in Form No.2 and also certified that no Disciplinary Proceedings are pending against him. The proposed IRP is hereby appointed to initiate Corporate Insolvency Resolution Process against the Corporate Debtor.

Upon Admission of the Application and Declaration of “Moratorium” the Insolvency Process such as Public Announcement etc. shall be made immediately as prescribed under section 13 read with section 15 of The Code. He shall perform the duties as an Interim Resolution professional as defined under section 18 of The Code and inform the progress of the Insolvency Process and the compliance of the directions of this Order within 30 days to this Bench. A liberty is granted to intimate even at an early date, if need be.

Having admitted the Petition/ Application the provisions of “Moratorium” as prescribed u/s. 14 of The Code shall come into operation. As a result, institution of any suit or parallel Proceedings before any Court of Law are prohibited. The assets of the Debtor must not be liquidated until the Insolvency Process is completed. However, the supply of essential goods or services to the Corporate Debtor shall not be suspended or interrupted during “Moratorium Period”. This direction shall have effect from the date of this Order till the completion of Insolvency Resolution process.

Accordingly, this CP (IB)-2849/(MB)/2018 stood Admitted.

The Corporate Insolvency Resolution Process shall commence from the date of this order.