M/s. Venus Traders vs M/s. Shri Gumandev Processors Private Limited

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

That, the instant application is filed by Mr. Bansi Dhar Dalal, HUF Karta of applicant/operational creditor M/s. Venus Traders, 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. Shri Gumandev Processors Private Limited (hereinafter called as respondent/corporate debtor).

That, the applicant/operational creditor M/s. Venus Traders, having its registered office at 11/104, Hanuman Pole, Nanavat, Surat 395 003, Gujarat State and engaged in the business of trading in dyes and chemicals across the country.

That, the respondent/corporate debtor M/s. Shri Gumandev Processors Private Limited is a company incorporated under the Companies Act, 1956 on 14.11.2003 and having its registered office at Plot No. 706, Opp. Ultra Rubber, GIDC, Ankleshwar, Gujarat State, having identification No. U17124G2003PTC043185. That, authorised share capital of the corporate debtor is Rs. 70,00,000/- and paid up share capital is Rs. 70,00,000/-. The respondent company is in the business of textile manufacturing.

It is submitted by the applicant that on the basis of purchase order placed by the corporate debtor for the period from 11.03.2016 to 14.03.2016, the applicant had supplied coal to the corporate debtor as per the details given in Annexure - 1 and the respondent is liable to make payment of the debt amounting to Rs. 4,38,858/- plus interest at the rate of 24% per annum from the date of default i.e. due date of each invoice, till the date of actual payment as reflected in the invoice itself. That, total debt with interest up to the date of the application comes to Rs. 6,62,976.17 (Rupees six lacs sixty-two thousand nine hundred seventy-six and paise seventeen only) which has further increased to Rs. 6,92,409.71 (Rupees six lacs ninety-two thousand four hundred nine and paise seventy-one only) up to 25th August, 2018, as per the computation of interest placed at Annexure – 3A to the application. The applicant has further contended that the corporate debtor has confirmed the outstanding through their balance confirmation which is placed as Annexure – 9 to the application.

It is further contended by the applicant that demand notice in Form 3 and Form 4 of the IB Code was issued to the respondent through Speed Post which was delivered at the registered office of the respondent on 22nd May, 2018 as per copy of track report placed as Annexure – 4 to the application.

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, as per track report the notice was served on the respondent on 15.10.2018 and thereafter on 12.12.2018. That, 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.

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. Kailash T. Shah to act as Interim Insolvency Professional. This Adjudicating Authority hereby appoint Mr. Kailash T. Shah, 505, 21st Century Business Centre, Near World Trade, Ring Road, Surat 395 0023 (ipktshsh@gmail.com) having registration No. IBBI/IPA-001/IP-P00267/2016-17/10511 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.