M/s. PPG Asian Paints Private Limited vs M/s. Coastal Automobiles Private Limited

This Application is filed by M/s. PPG Asian Paints Private Limited (“hereinafter referred to as Financial Creditor”) seeking initiation of Corporate Insolvency Resolution Process (CIRP) in respect of M/s. Coastal Automobiles Private Limited (“hereinafter referred to as Corporate Debtor”) alleging that the Corporate Debtor committed default in making payment to the Financial Creditor in view of the invoices raised by them upon the Corporate Debtor, by invoking under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.

The Financial Creditor is a Private Limited Company, registered and incorporated under the Provisions of Indian Companies Act, 1956. The Financial Creditor is a joint venture company of PPG Inc of USA and Asian Paints Ltd., and is carrying business of supply of automotive refinish coating products, Deltron Global Refinish System, etc. The Corporate Debtor is a Private Limited Company registered and incorporated under the Provisions of Companies Act, 2013, engaged in the business of automotive sales, servicing and repair work etc.,

It is submitted that the Corporate Debtor approached the Financial Creditor for financial contribution, for the purpose of sales promotion and procurement of specialised painting equipment for development and up-promotion of automotive painting facilities. In view of the same, an Agreement was executed between the Financial Creditor and the Corporate Debtor on 04.06.2013, that in terms and conditions of the said agreement, a financial contribution to the tune of Rs.4,00,000/- was made by the Financial Creditor to the Corporate Debtor. As per the agreement, security was given by the Corporate Debtor to the Financial Creditor for breach of obligations if any. It is noteworthy that the Corporate Debtor issued a demand promissory note for an amount of Rs.4,00,000/- along with interest @12% p.a. as a collateral security.

The Financial Creditor issued demand notice dated 18.12.2018 to the Corporate Debtor. But the Corporate Debtor did not issue any reply to the said demand notice. Neither was any payment made towards the demanded debt.

I heard the counsel for the Financial Creditor and perused the averments made in the Petition as well as the documents annexed to the Petition. It is evident that the Corporate Debtor did not respond to the notice of demand issued by the Financial Creditor. The Corporate Debtor did not file counter inspite of granting several adjournments. By virtue of order dated 03.12.2020, the Tribunal forfeited the right of the Corporate Debtor to file counter and the matter was listed for arguments. The Counsel for the Corporate Debtor did not appear thereafter. Hence it can be understood that the Corporate Debtor does not have anything to submit in opposition to the contentions made by the Financial Creditor.

Hence I am of the considered view that it is a fit case to admit and order initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Financial Creditor has suggested one name i.e., Mr.K.K.Balasubramanian (IBBI/IPA-001/IP-P-01544/2018-2019/12401) as Insolvency Resolution Professional (IRP).

The Company Petition is admitted ex parte. The Corporate Insolvency Resolution Process of the Corporate Debtor shall commence from this date and shall be completed within 180 days hence.