M/s. Aadit Metal Trade Private Limited vs M/s. Royaloak Steels Private Limited

PER: K.ANANTHA PADMANABHA SWAMY, MEMBER JUDICIAL

Under consideration is a Company Petition filed by M/s.Aadit Metal Trade Private Limited (in short, 'Petitioner/Operational Creditor') against M/s. M/s. Royaloak Steels Private Limited (in short, 'Respondent/Corporate Debtor') under section 9 of the Insolvency and Bankruptcy Code 2016 (in short, I & B Code 2016) Read with Rule 6 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity, 'IB Rules 2016').

The Petitioner/Operational Creditor having its Regd. Office at Building No.118/120, Ground Floor, Aridsher Dadi Street, V.P.Road, C.P.Tank, Mumbai. The Respondent/Corporate Debtor is a Company registered under the Companies Act, 1956 having its Registered Office at 406 B, South East, United Avenue Apartments, Ameerpet, Hyderabad, Telangana and is engaged in the business of trading in steel products.

The learned counsel appearing on behalf of the Petitioner/OC submitted that the Respondent/Corporate Debtor approached the Petitioner/OC and requested for the supply of various steel products at certain agreed price. Accordingly, since the material was in stock with the Petitioner/OC the materials were supplied to the Respondent/CD and in total 48 invoices were raised for a value of ₹.5,34,13,303 (Rupees Five Crores Thirty Four Lakhs Thirteen Thousand Three Hundred and Three only) during the period from 09.02.2019 to 28.02.2019.

It is also submitted that the Respondent/CD has made the following payments to the Petitioner/OC amounting to an extent of ₹.1,45,00,000/- (Rupees One Crore Forty Five Lakhs Only) on various dates as detailed below;

It is submitted that, in this way an outstanding amount of Rs.3,89,13,303/- (Rupees Three Crore Eighty Nine Lakhs Thirteen Thousand Three Hundred and Three only) remained due from the Respondent/CD to the Petitioner/OC. The term of payment as per of invoices raised was immediate but the Petitioner/OC had agreed for a one-month term. Thus the payment of last invoice became due on 27^th March, 2019.

It is further submitted that when the Petitioner/OC has requested for the payment of the due amount the Respondent/CD started avoiding the Petitioner/OC and even after a series of meetings by the Petitioner/OC with the Respondent/CD, the Respondent/CD is not willing to pay the due amount.

It is stated that, thereafter, the Petitioner/OC issued a notice in Form-3 to the Respondent/CD. The notice was duly received by the Respondent/CD on 18^th May, 2019 for which they have neither replied nor disputed the same.

In order to prove the existence of debt and default on the part of the Respondent/CD, the Petitioner/Operational Creditor has submitted copies of several documents as stated below:

The Respondent/Corporate Debtor filed counter affidavit.

The Respondent in its counter affidavit submitted that the Respondent/CD is admitting the claim amount as made by the Petitioner/OC, but due to adverse economic conditions there has been delay in the payment due to the reasons beyond its control due to the slowing down of economy and huge delays in the collection of its receivables.

Heard both the parties. Perused the record and submissions.

After hearing submissions of the counsel for the Petitioner/Operational Creditor and having perused the record, this Adjudicating Authority is satisfied that the Petitioner by placing evidence has proved that default as stated in the petition has occurred, for which the Corporate Debtor was liable to pay. The Petitioner has also placed on record, proof of sending notices and other material papers. The Petitioner has complied with all the requirements as stipulated under the provisions of the IB Code, 2016 for the purpose of initiating Corporate Insolvency Resolution Process. In these circumstances, this Adjudicating Authority is inclined to admit the instant Petition.

The instant petition is hereby admitted and this Adjudicating Authority orders the commencement of the Corporate Insolvency Resolution Process which shall ordinarily get completed within the timelines stipulated in the IB Code, 2016 (as amended), reckoning from the day this order is passed.

This Adjudicating Authority hereby appoints Mr.Raj Kumar Mahto as Interim Resolution Professional (IRP) as his name is proposed by the Operational Creditor and his name is reflected in IBBI website. He has also filed his written consent in Form-2. The IRP is directed to take charge of the Respondent/Corporate Debtor's management immediately. He is also directed to cause public announcement as prescribed under Section 15 of the I&B Code, 2016 within three days from the date the copy of this order is received, and call for submissions of claim in the manner as prescribed.

The moratorium is hereby declared which shall have effect from the date of this Order till the completion of Corporate Insolvency Resolution Process, for the purposes referred to in Section 14 of the I& B Code, 2016. It is hereby ordered to prohibit all of the following, namely:-

However, the supply of essential goods or services of the Corporate Debtor shall not be terminated or suspended or interrupted during moratorium period. Further, the provision of Sub-section (1) of Section 14 shall not apply to such transaction, as notified by the Central Government.

The IRP shall comply with the provisions of Sections 13 (2), 15, 17, & 18 of the Code. The directors of the Corporate Debtor, its promoters or any person associated with the management of the Corporate Debtor is expected to extend all assistance and cooperation to the IRP as stipulated under Section 19 and for discharging his function under Section 20 of the I & B Code, 2016.

The Operational Creditor and the Registry are directed to send the copy of this Order to IRP so that he could take charge of the Corporate Debtor's assets etc., and make compliance with this Order as per the provisions of I & B Code, 2016.

The Registry is directed to communicate this Order to the Operational Creditor and the Corporate Debtor.

The detailed address of the IRP is as follows :-Mr. Raj Kumar Mahto IP. Reg. No: IBBI/IPA-002/IP-N00723/2018-2019/12209. Mail: [email protected] Mobile: +91-7709266764.

The present Petition bearing CP (IB) No.388/9/HDB/2019 is hereby admitted.