M/s. Barret Commodity Traders Private Limited vs M/s. Proseed India Limited

PER: K.ANANTHA PADMANABHA SWAMY

Under consideration is a Company Petition filed by M/s. Barret Commodity Traders Private Limited (in short, 'Petitioner/Operational Creditor') against M/s. PROSEED INDIA 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 Company is registered under the Companies Act, 1956, having its Office at Murthy Manson, Flat No.104, Pandu Ranga Nagar, Mothi Nagar Extention, Hyderabad, Telangana. The Respondent/Corporate Debtor is a Company registered under the Companies Act, 1956 having its Registered Office at No.302, Lotus Block, Block – B, Sandy Springs, Manikonda, Hyderabad, Telangana.

The learned counsel appearing on behalf of the Petitioner/Operational Creditor submitted that the Applicant has filed this application under Section 9 of IB Code, 2016 R/w Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiation of Corporate Insolvency Resolution Process (CIRP) in respect of M/s. PROSEED INDIA LIMITED. It is stated that the Respondent Company owes the Operational Creditor an operational debt of Rs.71,93,665/- (Rupees Seventy One Lakhs Ninety Three Thousand Six Hundred and Sixty Five Only).

It is stated by the Operational Creditor, that it is into the business of manufacturing, trading and dealing all kinds of commodities and agricultural products. The Operational Creditor has entered into business relationship with the Corporate Debtor for supply of trading commodities from (04^{\text{th}}) July, 2016. Since then the business transactions were continued regularly till (27^{\text{th}}) December, 2018.

The Operational Creditor further stated that, it has raised invoices against the Corporate Debtor for sale of commodities from (04^{\text{th}}) July, 2016 to (27^{\text{th}}) December, 2018. The invoices from (26^{\text{th}}) September, 2018 to (27^{\text{th}}) December, 2018 amounting to Rs.64,22,915/- (Rupees Sixty Four Lakhs Twenty Two Thousand Nine Hundred and Fifteen Only) are due and payable by the Corporate Debtor.

It is further stated that the Corporate Debtor never denied the claim amount but requested the Operational Creditor for extension of time on every occasion when the amount was demanded by the Operational Creditor.

It is stated by the Operational Creditor that the Corporate Debtor had made payments to the Operational Creditor on the basis of 'on account' against the invoices on continuous basis till 22nd November, 2018 based on follow up letter from the Petitioner. The said amount remained unpaid since then, the Operational Creditor has sent a letter on 27th January, 2019 to the Corporate Debtor to clear the outstanding amount as part of the follow up letters.

It is further stated by the Operational Creditor that it has issued a demand notice in Form No.3 & Form No.4 by registered post on 22nd February, 2019 demanding the above mentioned outstanding amount of Rs.64,22,915/- (Rupees Sixty Four Lakhs Twenty Two Thousand Nine Hundred and Fifteen Only) along with interest @ 12% Per Annum of Rs.7,70,750/- (Rupees Seven Lakhs Seventy Thousand Seven Hundred and Fifty Only) making an aggregate claim of Rs.71,93,665/- (Rupees Seventy One Lakhs Ninety Three Thousand Six Hundred and Sixty Five Only).

Particulars of Claim Amount :

It is stated that the Operational Creditor did not receive any reply from the Corporate Debtor against the Demand Notice sent on 22nd February, 2019. It is further stated that the Corporate Debtor has failed to clear the outstanding amount.

It is also further stated that, in the light of the above facts and circumstances the Operational Creditor is constrained to approach this Adjudicating Authority by filing the present application for the initiation of Corporate Insolvency Resolution Process (CIRP) in respect of M/s. PROSEED INDIA LIMITED.

The Operational Creditor placed reliance on the following documents as evidence : Copies of outstanding bills/invoices. > Copy of Statement of Bank Account confirming that there is no payment of the relevant unpaid debt by the Corporate Debtor. > Copy of Ledger Account of Respondent (Proseed India Limited) in the books of Petitioner for the period 01st April, 2016 to 19th February, 2019. > Copy of Certificate of Incorporation of the Corporate Debtor including the name changes. > Copy of the Memorandum of Association along with Articles of Association of the Corporate Debtor. > Copies of MCA extracts of Master Data of the Corporate Debtor. > Copy of Certificate of Incorporation & Memorandum of Association of the Operational Creditor. > Copies of request letters issued by the Operational Creditor for recovery of due amounts as per various invoices. > Copy of Demand Notice in Form No.3 dated.22nd February, 2019 along with Form No.4 with interest calculation. > Copy of the Postal Acknowledgement serving Form No.3 on the Corporate Debtor. > Copy of Statement of Account of Unpaid Operational Debt Form. 3.

The Director of the Corporate Debtor Mr.DVS.Prakash Rao appeared in person and filed statement of objections and submitted that due to the financial constraints the Corporate Debtor could not release the outstanding amount which it was liable to the Petitioner and requested the Operational Creditor to provide some time to meet the obligation of payment of invoice amount as specified by the Petitioner. It is also stated that due to business volatility and severe cash crunch the Corporate Debtor could not release the outstanding amount, but requested the Operational Creditor to provide some time. It is further stated that the Petitioner has placed all the details of debt amount, details of transactions on account of which debt fell due. The Corporate Debtor has filed no counter.

Heard and perused the record.

It is the case of the Petitioner/OC that it has provided commodities to the Corporate Debtor from 04^th July, 2016 to 27^th Dec, 2018 and the invoices from 26^th Sep, 2018 to 27^th Dec, 2018 amounting to Rs.64,22,915/-(Rupees Sixty Four Lakhs Twenty Two Thousand Nine Hundred and Fifteen Only) along with interest @ 12% Per Annum of Rs.7,70,750/- (Rupees Seven Lakhs Seventy Thousand Seven Hundred and Fifty Only) making an aggregate claim of Rs.71,93,665/- (Rupees Seventy One Lakhs Ninety Three Thousand Six Hundred and Sixty Five Only) fell due and payable by the Corporate Debtor. The Director of the Corporate Debtor appeared in person and filed its statement of objections wherein he has neither denied the debt nor disputed the same but has only sought some more time for making payment to the Petitioner.

After hearing submissions of the counsel for the Petitioner/Operational Creditor and having perused the record, this Adjudicating Authority is satisfied that the Petitioner has proved by placing evidence that default has occurred which the Corporate Debtor was responsible to pay. The Corporate Debtor has accepted the claim amount and has not raised any dispute. The Petitioner has also placed on record proof of sending notices and other material papers. The Petitioner has complied with all the requirement as stipulated under the provisions of the IB Code, 2016 for the purpose of initiating Corporate Insolvency Resolution Process.. In addition to this, he has not resisted the claim amount at any time or at any stage of the proceedings. In these circumstances, this Adjudicating Authority is inclined to admit the instant Petition.

The instant petition is admitted and this Adjudicating Authority order the commencement of the Corporate Insolvency Resolution Process which shall ordinarily get completed within 180 days, reckoning from the day this order is passed.

I hereby Appoint Mr. Venka Reddy Bathina, the name proposed by the Operational Creditor as IRP and written consent by way of Form-AA of the IRP is also obtained. 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 Insolvency and Bankruptcy 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 purpose referred to in Section 14 of the I & B Code, 2016. It is hereby ordered to prohibit all of the following, namely:-

The Supply of essential goods or services of the Corporate Debtor shall not be terminated or suspended or interrupted during moratorium period. 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 are as follows:-Mr. Venka Reddy Bathina Address: H.No.8-2-603/1/10, Second Floor, Krishnapuram, Road No.10, Banjara Hills, Hyderabad, Telangana. E-mail: bvrcs123@gmail.com Cell : 9848673524 Reg. No: IBBI/IPA-002/IP-N00645/2018-2019/12032.

This instant Petition is hereby admitted.