Mr.J.Mohan Babu, Proprietor Of M/s. Annai Audit Firm vs Ramya Outsourcing Solutions Private Limited

Per: SAMEER KAKAR, MEMBER (TECHNICAL)

This Application has been filed by one MR. J. MOHAN BABU, PROPRIETOR OF M/S. ANNAI AUDIT FIRM (hereinafter referred to as ‘Financial Creditor’) on 14.08.2021 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, against RAMYA OUTSOURCING SOLUTIONS PRIVATE LIMITED (hereinafter referred to as 'Corporate Debtor'). The prayer made is to admit the Application, to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, declare moratorium and appoint Interim Resolution Professional (IRP).

From Part-I of the Application, it is seen that the Financial Creditor is a Proprietor Firm. The registered office address of the Financial Creditor as per the Application is stated to be situated at Door No.614, Thiru Nagar, 87, Veepampattu, Thiruvallur- 602 024. Further, Part-I lays down the Authorized Representative of the Financial Creditor to be one Mr. J.Mohan Babu, Proprietor of Annai Audit Firm and the Affidavit verifying Petition duly signed by the Financial Creditor dated 10.08.2021 is placed at Page Nos. 11- 12 of the typed set filed along with the application. Part II of the Application lays down the details of the Corporate Debtor. It can be seen that the Corporate Debtor is a Private limited company incorporated under the Companies Act, 1956 on 02.01.2012 with CIN: U74900TN2012PTC083851. The registered office of the Corporate Debtor as per the MCA master data is situated at No.13, Santhosh Nagar, Pattunoolchathiram, Sriperumbudur - 602 105.

From Part-III of the Application, it is seen that the Financial Creditor has proposed the name of the Interim Resolution Professional (IRP) viz., Mr. Asir Raja Selvan, Reg. No. IBBI/IPA-002/IP-N00498/2017-2018/11554.

From Part-IV of the Application, it is seen that the Financial Creditor has claimed a debt amount of Rs.1,15,21,900/- (Rupees One Crore Two Lakhs and Thirty Thousand Only) as on June 2021 plus additional interest @ 12% p.a. from June 2021 till payment and penal interest @ 9% p.a. from 15.04.2021 till date of repayment which is due and payable by the Corporate Debtor. The date of default as averred in Part-IV of the Application is 15.04.2021.

Part V of the application describes the particulars of Financial Debt, documents and the same is placed at Annexure -I and the list of documents between the Financial Creditor and the Corporate Debtor is reproduced hereunder:

It was averred in the application that the Corporate Debtor had approached the Financial Creditor seeking for short terms loans 1 order to meet their financial commitments and working capital requirement. That vide minutes of meeting dated 18.07.2019, the Applicant had agreed to disburse short term loans to the Corporate Debtor repayable at 12% on the following dates;

Pursuant to the disbursement requests of the Corporate Debtor, the Applicant had initially disbursed a sum of Rs.50,00,000/ in the month of July and August of 2019, however instead of repaying the said amounts, the Corporate Debtor had approached the Applicant seeking further loans.

It was submitted that owing to the good relationship maintained between the parties on 22.03.2021 an MOU was entered into whereby the Corporate Debtor had acknowledged the old dues of Rs.59,53,424/- and the Applicant had agreed to disburse further loan not exceeding Rs.55,00,000/-, repayable with interest @ 12% p.a. The Corporate Debtor had also agreed to repay the entire dues fully with interest on or before 15.04.2021 and on failure to make the payment, they had agreed that additional penal interest @ 9% could be levied.

Accordingly, a sum of Rs.52,30,000/- was disbursed by the Applicant to the Corporate Debtor in the month of March, 2021 and the Corporate Debtor had severely defaulted in the repayment in terms of the MOU dated 22.03.2021.

The Corporate Debtor had also acknowledged the receipt of Rs.1,02,30,000/- from the Applicant on several occasions but have failed to make any payment in discharge of the said admitted liability.

Despite several reminders, legal notice dated 05.07.2021 was issued on behalf of the Applicant, calling upon the Corporate Debtor to repay the financial debt within 10 days. Even after receipt of the said notice, no payments were made. Further, since it is reliably learnt that the substratum of the Corporate Debtor has eroded they are severely indebted, present preferred.

The Learned Counsel for the Corporate Debtor had filed a one-page counter wherein the Corporate Debtor admitted the debt amount which is due to be paid to the Financial Creditor.

In the present case, it is seen that the Corporate Debtor had admitted its liability in its counter. However, upon perusal of the documents filed by the Petitioner along with the typed set, this Adjudicating Authority vide its order dated 23.11.2021 has passed the following order;

Pursuant to the aforesaid order, it could be seen that the Corporate Debtor has filed the copy of the financial statements in the Registry of this Tribunal on 29.03.2022 vide SR No. 2080. A perusal of the Financial Statement for the period 2020 – 2021 would show that under the Long-Term Borrowing, the name of the Financial Creditor is not found. The extract of the same is captured hereunder;

When the aforesaid fact was pointed out to the Learned Counsel for the Corporate Debtor, it was replied that the "amount received from the Financial Creditor is included in the loans and advances, which are placed at Page No.66 under the head "Short Term Loan" under Note-10". It is observed from Note 10 in the balance sheet covers the asset side of the balance sheet and not the liability side, where the loans obtained by the Corporate Debtor are normally reflected.

The aforesaid statement made by the Corporate Debtor in conjunction with the financial statements would manifest the fact that the Corporate Debtor is the one who has given loan to the Financial Creditor. A perusal of the long terms borrowings as reflecting under Note 3 to the Balance Sheet reveals that the Corporate Debtor is heavily indebted. The Short Terms borrowings stood at Rs.78.54 Lakh and the current liabilities duties and taxes increased to nearly Rs.54.94 Lakh from Rs.18.45 Lakh in the earlier year. The net profit has come down from Rs.57.45 lakh in 2020 to Rs.7.39 Lakh. All this indicate that the Corporate Debtor is facing lot of financial constraints and not able to pay his debts and wishes to take advantage of moratorium under Section 14 of IBC, 2016. 17.Further, it could be seen from the averments that knowing fully well that the Corporate Debtor has not paid the amount, the Financial Creditor again disbursed a sum of Rs.52,30,000/- during the month of March 2021 in and by which the default amount would cross the threshold limit of Rs.1 Crore. Thus, it would prove that the present Application has been filed by the Financial Creditor in collusion with the Corporate Debtor and it will attract Section 65 of IBC, 2016 which entails imposition of heavy costs.

Under such circumstances, the present Application filed by the Financial Creditor stands dismissed with a cost of Rs.3,00,000/- (Rupees Three Lakh Only) payable to the “Prime Minister National Relief Fund”, within a period of 7 days from the date of this order.

Post this matter on 12.08.2022 for compliance.