M/s.ExxonMobil Lubricants Private Limited vs M/s.Wilworth Earth Movers Private Limited

Per: Rajeswara Rao Vittanala, Member (J)

C.P.(IB)No.178/BB/2018 is filed by M/s.ExxonMobil Lubricants Private Limited ('Petitioner/Operational Creditor') U/s 9 of the IBC, 2016 R/w Rule 6 of the I&B (Application to Adjudicating Authority) Rules, 2016, by inter alia seeking to initiate Corporate Insolvency Resolution Process (CIRP) in respect of M/s.Wilworth Earth Movers

Private Limited, on the ground that it has committed default for total amount of Rs.39,48,734.33/-(Rupees Thirty Nine Lakhs Forty Eight Thousand Seven Hundred Thirty Four and Paise Thirty Three Only) in respect of 10 invoices.

Brief facts of the case, as mentioned in the Company Petition, are as follows:

M/s.ExxonMobil Lubricants Private Limited (herein after referred to as Petitioner/Operational Creditor), having CIN: U74899KA1994PTC107405 registered under the Companies Act, 1956. The Petitioner is an affiliated corporation of ExxonMobil Corporation ('EMC') an entity incorporated in the United States of America, through its affiliated corporations, engage in the upstream and downstream oil and gas business globally and also engage in the business of selling etc.

M/s.Wilworth Earth Movers Private Limited (herein after referred to as Respondent/Corporate Debtor) having CIN: U51504KA1999PTC025450 was incorporated on 12.07.1999 under the Companies Act, 1956. Its Authorised Share Capital is Rs.3,00,00,000/-(Rupees Three Crores Only) and Paid-up Capital is Rs.2,50,00,000/-(Rupees Two Crore and Fifty Lakhs Only). The Company engaged in the business of providing among other things, Volvo construction equipment such as wheel loaders, backhoe loaders, excavators, articulated haulers, motor graders etc.

It is stated that the Corporate Debtor required engine oils and lubricants for its equipment. From time to time, the Corporate Debtor placed orders with the Operational Creditor for supply of the products. In satisfaction of such requests, the Operational Creditor duly supplied the products to the Corporate Debtor, on various occasions, and issued invoices

for the same. However, though the Corporate Debtor took delivery of the goods, it did not pay the invoice amounts. By an emails, the Petitioner reminded the Respondent of the balance outstanding amount of almost Rs.41 Lakhs and requested for a meeting to discuss payment of the same. The Petitioner met the Respondent's personnel at its Jayanagar, Bangalore office. It was decided by the parties that the Respondent shall clear all pending payments due to the Petitioner by February, 2016. Pursuant to the meeting, the Respondent acknowledged its liability to pay the dues to the Petitioner by an email dated 19.08.2015 and committed itself to clear its dues on monthly basis so as to clear all dues by February, 2016. However, the Respondent did not adhere to its commitment. Despite several reminders, as the Respondent did not pay the outstanding acknowledged dues, the Petitioner issued a statutory legal notice dated 11.07.2016 through its counsel to the Respondent under the provisions of Section 434 of the Companies Act, 1956, and put the Respondent to notice to discharge its admitted liability of Rs.39,48,734.33/- During the period 19.08.2015 (when the Respondent admitted its debt of Rs.40,22,445.35/-) and the issuance of the legal notice on 11.07.2016, some adjustments towards return of stock etc. were made, resulting in the amount due being reduced to Rs.39,48,734.33/-.

Since the Respondent failed to make payment of its admitted dues, the petitioner has filed Company Petition No.205/2016 before the Hon'ble High Court of Karnataka U/s 433(e), 434 and 439 of the Companies Act, 1956 for winding up the Respondent Company. And the Company was transferred from the Hon'ble High Court of Karnataka to the Adjudicating Authority. By a notice dated 23.01.2017 this Adjudicating

Authority was pleased to registered the transferred petition as Transfer Petition (TP) No.80/2017. The Respondent has filed its reply dated 27th August, 2017 by inter alia raising its maintainability under the provisions of Code. The Adjudicating Authority vide its orders dated 12th February, 2018 dismissed the Petition as abated since the Petitioner had not issued a notice under Section 8(1) of the IBC, 2016 pursuant to the transfer of the petition from the Hon'ble High Court to this Adjudicating Authority and granted liberty to the petitioner to file fresh case after duly following procedure prescribed under the Code.

Accordingly, the Petitioner had issued a fresh Demand Notice dated 28.03.2018 under Rule 5 of the I&B(AAA) Rules, 2016, by demanding the Respondent to pay Rs.39,48,734.33/- in full within 10 days of receipt of this letter. The Respondent had failed to pay the amount and also did not raise any dispute by way of reply. Therefore the instant Company Petition is filed in accordance with law.

Heard Shri Harish N.N., learned Counsel for the Petitioner. None appears for the Respondent. We have carefully perused the pleadings of the party and the extant provisions of the Code and the law.

Shri Harish N.N the learned Counsel for the Petitioner, while pointing various averments made in the petition, as briefly stated supra, has further submitted that the Respondent has admitted its liability even before filing CoP No.205/2016 before the Hon'ble High Court of Karnataka under Section 433(e), 434 and 439 of the Companies Act, 1956. The Respondent by its reply dated 22.08.2017 earlier in TP No. 80 of 2017 did not dispute the debt and only raised technical grounds. The Petitioner issued a fresh demand notice dated 28.03.2018 to the Respondent and the same was delivered on

the Respondent but the Respondent had failed to reply to the demand notice.

It is not in dispute that the petitioner has issued legal notice dated 11th July, 2016 before filing CoP No. 205 of 2016 and Respondent continued to ignore the demands made by the petitioner time and again leading to the filing of Company petition before the Hon'ble High court and before the Adjudicating Authority as detailed supra. Therefore, the Respondent is well aware of the outstanding amount and failed to pay it intentionally and deliberately. The instant case is listed for hearing on several dates viz. 15.10.2018, 09.11.2018, 03.12.2018, 14.12.2018, 08.01.2019, 23.01.2019, 20.02.2019, 14.03.2019, 21.03.2019, 12.04.2019, 25.04.2019, 07.05.2019, 30.05.2019, 27.06.2019, 31.07.2019, 13.08.2019, 19.08.2019 & 23.08.2019 and notice was also served on the Respondents. However, the Respondent failed to avail opportunities given to it. The case is pending since 30.08.2016 i.e., from filing of case before the Hon'ble High court, and thereafter here. The petitioner has filed Memo dated 28.11.2018 by placing a copy of Bank statement from Bank of America for the period from 01.04.2018 to 30.04.2018 to show that the Respondent failed to pay the outstanding amount. The Authorised Representative of the petitioner has also filed a notarised Affidavit dated 27th June, 2018 by inter alia stating that they have not received any notice of dispute from the Respondent with regard to the outstanding amount. By perusal of the instant Petition/Application, it is found that it filed in accordance with law and debt and default in question are not in dispute right from filing of Cop No.205 of 2016 before the Hon'ble High court, as detailed supra. And a qualified Resolution Professional namely Shri C.S. V.S. Varun, with Registration No. IBBI/IPA-002/IP-N00290/2017-18/10848, is suggested, who also filed written Consent in Form-2 has dated 22.08.2019. Therefore he is prima facie eligible to be

appointed as IRP in this case. It is settled position of law that once debt and default is proved to the satisfaction of the Adjudicating Authority with no dispute raised, the case has to be admitted to initiate CIRP, and appoint IRP, etc. We are satisfied with the reasons cited by the Petitioner to initiate CIRP and thus it is a fit case to admit it by initiating CIRP, appointing IRP etc.

In view of the above facts and circumstances of the case, by exercising powers conferred on this Adjudicating Authority, U/s 9(5)(i) and other extant provisions of the IBC, 2016, we hereby admitted C.P.(IB)No.178/BB/2018 by initiating Corporate Insolvency Resolution Process (CIRP) in respect of Respondent/Corporate Debtor with the following consequential directions:

Shri C.S. V.S. Varun, bearing Registration No. IBBI/IPA-002/IP-N00290/2017-18/10848, who is qualified Resolution Professional, is hereby appointed as Interim Resolution Professional, in respect of the Respondent/Corporate Debtor namely M/s.Wilworth Earth Movers Private Limited to carry out the CIRP as mentioned under the Insolvency and Bankruptcy Code, 2016 and various rules issued by IBBI from time to time;

The following moratorium is declared prohibiting all of the following, namely:

The IRP is directed to follow all extant provisions of the IBC, 2016 and all extant rules including fees rules as framed by IBBI from time to time. The IRP is hereby directed to file progress reports to the Adjudicating Authority from time to time.

The Board of Directors and all the staff of Respondent/ Corporate Debtor are hereby directed to extend full co-operation to the IRP, in carrying out his functions as such, under the Code and Rules made by IBBI.

Post the case for report of IRP on 25.09.2019.

CERTIFIED TO BE TRUE COPY OF THE ORIGINAL