M/s. Alutech Packaging Pvt. Ltd. vs M/s. Vilin Bio Med Limited

M/s. Vilin Bio Med Limited / Corporate Debtor is engaged in pharmaceutical formulations. During the course of business, the Corporate Debtor approached and negotiated with the Operational Creditor for supply of Alluminium Foil for usage as packaging material for its pharmaceutical products. All the material were supplied by the Operational Creditor against VAT invoices which were duly acknowledged and received by the Corporate Debtor. The Corporate Debtor have never raised any dispute about the supplied quality, quantity and rates whatsoever in nature. The payment terms were 60 days from the date of delivery.

It is averred that a running account was being maintained between the parties whereby Corporate Debtor purchased the materials on various dates on credit basis and paid amount of some bills on different dates and the last transaction took place on 28.04.2017, whereon an amount of Rs.1,40,000/- was paid by the Corporate Debtor towards partial discharge of its total liability.

It is averred that to recover the defaulted amount, the Operational Creditor has rigorously followed up with the Corporate Debtor for payment. The Corporate Debtor admitted its entire liability under the supply contract and in discharge thereof issued the following cheques drawn on Punjab National Bank, Ramnagar, Roorkee, Haridwar, Uttarakhand.

It is averred that on 05.07.2017, the Operational Creditor sent a Legal Notice calling upon the Corporate Debtor to make the payment of the total cheques amount of Rs.11,32,709/-. Having not received the payment, the Operational Creditor filed a complaint u/s 138 of Negotiable Instruments Act with case No. CO MA 2439/2017 in the Hon'ble Judicial Magistrate Mansi Gaur, 1st Class Court, Rohtak, Haryana and the proceedings of the same are in progress.

When the said amount was not paid by the Corporate Debtor, the Operational Creditor got issued a Demand Notice dated 07.11.2019 in Form-3 by demanding to pay the total debt amount of Rs.17,13,891/- which includes principal of Rs. 11,32,709/- plus interest of Rs.5,81,182/- (interest calculated @ 18% p.a. from the date of respective invoice till 22.10.2019). vi. It is averred that the Corporate Debtor in its reply dated 23.12.2019 to the demand notice has not denied or raised any dispute with regard to the outstanding payment but has referred to the cheque bounce case No CO MA 2439/2017 filed by the Operational Creditor against the Corporate Debtor and its Directors and averred that the Operational Creditor's action of issuing the demand notice under the Insolvency & Bankruptcy Code is untenable. vii. It is averred that the Operational Creditor relied on the Order of Hon'ble NCLAT in Sudhi Sachdev Vs. Appl Industries Ltd. dated 13.11.2018 held that “The pendency of the case under Section 138/441 of the Negotiable Instruments Act, 1881, even if accepted as recovery proceeding, it cannot be held to be a dispute pending before a Court of Law”. It is also averred that the pendency of the case under Section 138/441 of Negotiable Instruments Act, 1881 actually amounts to admission of debt and not an existence of dispute. We find no merit in this appeal. It is accordingly dismissed. viii. It is submitted that Bank Statements of Operational Creditor for the period from 01.10.2019 to 30.01.2020 is shown at page nos. 48 to 66 of the application. ix. Hence this application seeking to trigger CIRP against Corporate Debtor for default of operational debt.

The Bench hereby prohibits 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; 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 Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); the recovery of any property by an owner or lessor where such property is occupied by or in possession of the Corporate Debtor;

Notwithstanding anything contained in any other law for the time being in force, a license, permit, registration, quota, concession, clearances or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concessions, clearances or a similar grant or right during the moratorium period.

That the supply of essential goods or services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period.

That the provisions of sub-section (1) of Section 14 shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.

That 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 Bench approves the Resolution Plan under Sub-Section (1) of Section 31 or passes an order for liquidation of Corporate Debtor under Section 33, whichever is earlier.

The Operational Creditor proposed the name of Dr. K. Lakshmi Narasimha, Ph.D. (Law) as Interim Resolution Professional and he has given his consent in Form-2 and his Authorisation for Assignment is valid upto 26.11.2021. Accordingly, this Tribunal appoints Dr. K. Lakshmi Narasimha, Ph.D (Law) as Interim Resolution Professional, having Registration No. IBBI/IPA-001/IP-P00107/2017-18/10214.

That the Public announcement of Corporate Insolvency Resolution Process shall be made immediately as specified under section 13 of the code.

Registry to send a copy of this order to the Registrar of Companies, Hyderabad for appropriately changing the status of Corporate Debtor herein on the MCA-21 site of Ministry of Corporate Affairs.