M/S Eltech Transformers Private Limited vs M/s. Lanarsy Infra Limited

The operational creditor is known for successfully executing various projects in both private and public sectors. The operational creditor is registered as a “small” enterprise with the Ministry of Micro, Small and Medium Enterprises, Government of India, under UDYAM Registration No. UDYAM-HR-03-0018457. The corporate debtor is public limited company incorporate in the year 2011 as an infrastructure developing company having interests and high stakes in infrastructure, Energy, Education and Training & HR Development sectors in India and Africa.

In the year 2018, the corporate debtor approached the operational creditor towards the purchase of certain equipments and after having conducted its due diligence regarding the quality and repute of the operational creditor, the corporate debtor placed upon the operational a Purchase order(PO) bearing P.O. No. LIL/LOI/17-18/JHD/070 dated 31 October 2018 for supply of 25 KVA Distribution Transformers with accessories as per prescribed specifications.

That vide Agreement dated 14^th February 2019 parties recorded terms and conditions governing all aspects of the transaction between the parties aforesaid PO. That the aforesaid PO was supplemented by the corporate debtor with a verbal order for supply of 10 Power Transformers of 5 MVA each with accessories, with an assurance that a formal written communication shall be communicated. Against the aforesaid orders, the operational creditor supplied, as per instruction, 1214 Distribution Transformers of 25 KVA and 10 Power Transformers of 5 MVA, duly inspected and approved as per agreed terms, were duly received at respective sites designated by the corporate debtor.

That subsequently, the following purchase orders were placed by the corporate debtor, delivery of transformers in lieu whereof is not disputed or denied and is supported by e-way bills.

After having supplied goods to the corporate debtor which were duly inspected, verified and utilised by the corporate debtor, the operational creditor approached the corporate debtor for payments however the corporate debtor kept evading payment on one pretext or the other. Various letters, notices and legal notices were exchanged between the parties however the corporate debtor failed to make any payments. That in addition to the principal amount, the corporate debtor was also required pay interest on such delayed payment.

The operational creditor issued a Demand Notice dated 29.12.2022 under section 8 of the Code for outstanding of Rs. 9,62,61,378/- which was duly served upon the corporate debtor and there is no response from the corporate debtor. The default first occurred in 23.04.2019, however is continuing from time to time. Pertinently, different invoices became due on different dates and hence, the date of default is continuing from 2109 to 2023 hence, the present petition.

The Operational Debt is not maintainable and is ex-facie barred by limitation. The respondent is in continuous follow up with the petitioner for the disputes are pending which needs to be sorted and then only the payment of amount will arise and copies of emails and letters are filed for bad quality material supplied by the petitioner, to furnish the performance bank guarantee in line with the agreed contract and to repair the failed products supplied by the petitioner in line with the terms of warranty period mentioned in the PO. The corporate debtor requested the petitioner to settle all the pending issued by way of Arbitration as per Clause 10 of the PO.

The petitioner has not furnished any proof of supplies made viz., acceptance/acknowledgement from the alleged corporate debtor on receipt of materials, from which it is clearly evident the veracity of the said claims of the petitioner. In business parlance it is commonly understood that merely having a PO does not deem for automatic release of payment.

The petitioner has issued legal notice dated 18.07.2021 initiating for the Arbitration Clause and for reasons best known to the petitioner has not whispered the said fact in this application. As, such there has been a clear breach of the representations made by petitioner per purchase orders by the petitioner itself. Further, the communication has been sent to one of the corporate debtor address which is not in PO. Thus the notice sent cannot be treated as proper communication.

The petitioner has not mentioned about the dates of the purchase orders in the claim notice or in the petition except once, deliberately to avoid the issue of limitation. The petitioner also does not mention the date from which the alleged debt fell due, as mandated under part IV of form 5. It is also not in dispute that the present application was filed after the date of limitation, considering the dates when the alleged debt fell due.

The delivery challan annexed to the invoices do not have the attestation of the corporate debtor. It will not reflect the attestation of the receiver of the goods if such goods were indeed delivered. As such, the petitioner has failed to prove that any goods whatsoever have ever be supplied to the corporate debtor.

The respondent placed their on the decisions of Hon’ble Supreme Court in the matter of Mobilox Innovations Pvt. Ltd and the order of Hon’ble High Court of Himachal Pradesh in the matter of Company Appeal Nos.3 & 4 of 2015 (2017) 200 Comp Cas 191.