M/s. Surya Roshni Limited vs M/s. Ansh Electroplast Private Limited

[Per: Ms. Manorama Kumari, Member (Judicial)]

That, the instant application is filed by Mr. Milap Shah, Regional Manager, Gujarat Region, authorised representative of applicant/operational creditor M/s. Surya Roshni Limited, under Section 9 of the Insolvency and Bankruptcy Code, 2016 [hereinafter referred to as "the Code"] read with Rule 6 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 to trigger Insolvency Resolution Process against M/s. Ansh Electroplast Private Limited (hereinafter called as respondent/corporate debtor).

That, the applicant/operational creditor M/s. Surya Roshni Limited is a public limited company having identification No. L31501HR1973PLC007543, having its registered office at Prakash Nagar, Sankhol Bahadurgarh, Haryana State and having branch office at 308, Shefali Centre, Paldi, Ahmedabad, Gujarat is engaged in the business manufacturing and supply of electricity goods.

That, the respondent/corporate debtor M/s. Ansh Electroplast Private Limited is a company incorporated under the Companies Act, 1956 on 17.01.2014 and having its registered office at GF-10, Ruby Apartment, Opp. Navjivan Bus Stop, Ajwa Road, Vadodara, Gujarat State, having identification No. U31501GJ2014PTC078312. That, authorised share capital of the corporate debtor is Rs. 15,00,000/- and paid up share capital is Rs. 1,00,000/-. The respondent company is engaged in the business of manufacturing and supply of metal alloys, minerals, stainless steel and steel pole.

It is submitted by the applicant that, the corporate debtor has failed to make payment of the invoices raised from March 23, 2016 to March 31, 2016 for the total amount of Rs. 9,86,102/- along with interest of Rs. 4,13,325/- being @ 24% per annum. However, after issuance of demand notice under the IB Code, 2016 the corporate debtor repaid amount of Rs. 1,86,102/-. So the total amount of outstanding due is Rs. 12,13,325/- (Rupees twelve lacs thirteen thousand three hundred and twenty-five only) including an amount of Rs. 4,13,325/- being interest @ 24% per annum.

It is further submitted by the applicant that, the corporate debtor issued cheque bearing No. 000217 dated 28th April, 2018 amounting to Rs. 13,99,427/- towards the outstanding. That, on presenting the said cheque, the said cheque returned unpaid with remark "fund insufficient".

It is further submitted by the applicant that, legal notice dated 30.05.2018 under Section 138 (b) of the Negotiable Instrument Act, 1881 was issued for dishonouring the cheque. That, the operational creditor has time and again reminded the corporate debtor to pay the outstanding amount but the same remains unpaid till date.

The applicant further submitted that, having failed to receive the payment from the corporate debtor, the operational creditor was compelled to issue statutory demand notice in form 3 along with form 4 dated 16th February, 2018 under Insolvency & Bankruptcy Code, 2016.

The operational creditor further submitted that, upon issuance of demand notice, corporate debtor replied by email dated 27.02.2018 admitting liability for the payment of the outstanding dues.

The applicant has submitted copies of the following documents in support of the claim: -

On perusal of the record, it is found that on number of occasions service has been affected but none appeared on behalf of the respondent. That, on 24.10.2018, one Mr. Digpal Singh Rathore appeared on behalf of the respondent and filed vakalatnama and upon his request two weeks' time was granted to file reply. Thereafter, on 03.12.2018, further two weeks' time was granted to file reply. Since the respondent failed to file reply within given time, right to file reply was closed on 09.01.2019. That, as per track report the notice was served upon the respondent and the service is found to be complete. Therefore, the matter is heard ex-parte.

On perusal of the material available on record it is found that, the respondent has not raised any dispute against the claim and upon issuance of demand notice, corporate debtor replied by email dated 27.02.2018 admitting liability for payment of the outstanding dues.

While examining an application under Section 9 of the Act, will have to determine the following: -

In view of the aforesaid discussions and before rejecting and/or admitting the application, we must refer to the legislation guide on Insolvency Law of United Nations Commission on International Trade Law. One of the things the Legislative Guide spoke about was whether the debt is subject to a legitimate dispute or set off, in an amount equal to or greater than the amount of the debt.

Thus, under the facts and circumstances and as discussed above, in the light of the Hon'ble Supreme Court Judgement and the provisions thereof as enshrined in Insolvency & Bankruptcy Code, this adjudicating authority is of the considered view that operational debt is due to the Applicant and in support of that operational creditor has placed copy of the invoices at page No. 16 to 20 to the application. That, service is complete and no dispute has been raised by the respondent. That, Applicant is an Operational Creditor within the meaning of sub-section (5) of Section 20 of the Code. From the aforesaid material on record, petitioner is able to establish that there exists debt as well as occurrence of default.

That, the Application filed by the Applicant is complete in all respects.

The applicant/operational creditor has proposed the name of Mr. Kedar Ramratan Laddha to act as Interim Insolvency Professional. This Adjudicating Authority hereby appoint Mr. Kedar Ramratan Laddha, ([email protected]), 6/5 Sahayog Apartment, Keshavnagar, Subhash Bridge, RTO Circle, Ahmedabad, Gujarat having registration No. IBBI/IPA-001/IP-P00586/2017-18/11115 to act as an interim resolution professional under Section 13(1)(c) of the Code.

Section 13 of the Code enjoins upon the Adjudicating Authority to exercise its discretion to pass an order to declare a moratorium for the purposes referred to in Section 14, to cause a public announcement of the initiation of corporate insolvency resolution and call for submission of claims as provided under Section 15 of the Code. Subsection (2) of Section 13 says that public announcement shall be made immediately after the appointment of Interim Insolvency Resolution Professional. This Adjudicating Authority directs the Insolvency Resolution Professional to make public announcement of initiation of Corporate Insolvency Process and calls for submission of claims under Section 15 as required by Section 13(1)(b) of the Code.

From the above stated discussion and on the basis of material available on record it is a fit case to initiate Insolvency Resolution Process by admitting the Application under Section 9(5)(1) of the Code.

The petition is, therefore, admitted and the moratorium is declared for prohibiting all of the following in terms of subsection (1) of Section 14 of the Code: -

It is further directed that the supply of goods and essential services to the Corporate Debtor, if continuing, shall not be terminated or suspended or interrupted during moratorium period. The provisions of sub-section (1) shall, however, not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.

The order of moratorium shall have effect from the date of receipt of authenticated copy 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 as the case may be.

This Petition stands disposed of accordingly with no order as to costs.

Communicate a copy of this order to the Applicant, Financial Creditor, Corporate Debtor and to the Interim Insolvency Resolution Professional.