Mr. Vijal A. Jain vs Shree Daksh Jyot Silk Mills Pvt. Ltd.

Per: Shri Bhaskara Pantula Mohan, Member (Judicial)

This Company Petition is filed by Mr. Vijal A. Jain, Proprietor of EPPAJ INDIA (hereinafter called “Operational Creditor”) seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Shree Daksh Jyot Silk Mills Pvt. Ltd. (hereinafter called “Corporate Debtor”) on the ground that the Corporate Debtor committed default in payment of the dues to the Operational Creditor invoking the provisions of Section 8 and 9 of Insolvency and Bankruptcy Code (hereinafter called “Code”) read with Rule 6 of Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016.

The Operational Creditor is a a proprietorship concern represented by its proprietor, Mr. Vijal A. Jain. The Applicant sold, supplied and delivered goods to the Respondent. The Corporate Debtor is a company incorporated on 25.04.1988 bearing CIN: U99999MH1988PTC047141 and having authorized share capital Rs. 10,00,00,000/- and paid up share capital of Rs. 8,38,03,000/-.

The Operational Creditor time to time sold, supplied and delivered to the Corporate Debtor Plastic Sheets and Box Goods under twelve bills, during the period between 18.10.2014 to 14.02.2015 for an aggregate amount of ₹7,15,940 and raised the following invoices (Exhibits C” to “C-11” of pp. 13-24 of the Petition).

The counsel for the Petitioner further mentioned that the Respondent paid a sum of ₹40,000/- vide Cheque No. 110087 dated 16.02.2016 to the Applicant. Accordingly, the Petitioner has adjusted the said amount to the running account of the Respondent, leaving an outstanding amount of ₹6,75,940/- as due and payable under the said invoices, along with further interest @ 12% from the date of filing till realization of the payment which is described in Particulars of claim. (Exhibits “B” of page 12 of the Petition).

The Respondent issued a cheque dated 12.01.2016 for a sum of ₹44,298/- to the Applicant. On presentation of the said cheque, it got dishonored for the reason “Payment Stopped by drawer” (Exhibits “D” & “D-1” of pp. 25-26 of the Petition).

Ld. Counsel of the Petitioner also mentioned that the Operational Creditor sent the confirmation of Accounts on 01.04.2015 to the Corporate Debtor. The Corporate Debtor accepted and acknowledged the said confirmation of accounts. (Exhibits “E” at page 27 of the Petition).

The Operational Creditor stated that the Applicant delivered the said goods through transport and Respondent acknowledged receipt of the challans and Respondent never raised the grievances with respect to quality, quantity and size whatsoever till date.

The counsel for the Operational Creditor further stated that a demand notice dated 16.10.2018 under Section 8 of the Code, wherein a demand was made for payment of the unpaid operational debt due on the Corporate Debtor was duly sent which was received by the Corporate Debtor. There was no reply to this Demand Notice.

The Operational Creditor has annexed the following documents in support of the contentions made by them:

The Corporate Debtor has filed a reply dated 10.06.2019 to the Petition and filed before this Tribunal on 03.06.2019, in which it has been stated that the Operational Creditor, with malicious intention had created a cause of action vide alleged issuance of notice dated 16.10.2018, which itself reflects that the alleged dispute pertains to the years 2014 & 2015. However, the said demand notice is not received by the corporate debtor and therefore the present proceeding is time barred and is filed after expiry of limitation period of three years.

The Operational Creditor has further submitted that it had also issued a Notice dated 02.01.2017 through his Advocate inter-alia calling upon the corporate debtor to pay the alleged amount and upon failure to pay the same would face legal action u/s 434 of Companies Act, 1956 and also a civil suit for recovery of dues. However, the Operational Creditor failed to initiate any such proceeding for the reason best known to them and thereafter created a fresh cause of action vide issuance of notice dated 16.10.2018 with the same demand, being well aware that the debt is time barred and cannot be entertained by the Tribunal.

The corporate debtor has further submitted that the pleadings of the operational creditor also reveal that a cheque dated 12.01.2016 bearing no. 110088 issued by the corporate debtor for an amount of ₹44, 298/- was dishonored but towards this action the operational creditor also failed to and/or neglected to initiate a legal proceeding u/s 138 of Negotiable Instruments Act. Therefore, the operational creditor utterly failed and neglected to approach with legal remedy within time limits.

We have heard both the parties and after perusal of all the documents submitted by them, there remains no doubt that the invoices were raised in favour of the Corporate Debtor. Also, the goods were accordingly delivered.

Demand Notice dated 16.10.2018 was also duly served on the Corporate Debtor. There was no response to the Demand Notice.

The Corporate Debtor has admitted in its reply that the goods in question were indeed supplied by the Operational Creditor. However, it has been contended that the good were of inferior quality. The Corporate Debtor’s contention that it had raised grievances in respect of the inferior quality of goods supplied by the Operational Creditor, is not borne by any documents on record.

Therefore, it can be concluded that it is an admitted liability and also that the documents submitted by the Operational Creditor are enough to establish the debt upon the Corporate Debtor and hence the contentions made by the Corporate Debtor cannot be relied. Also, it defaulted in repaying the debt. Also, the amount of debt is much above the minimum required amount of Rs.1,00,000/- Hence, all the requisite conditions for admission of a petition under Section 9 have been found to be fulfilled and therefore, this petition deserves to be admitted.

Therefore, this Bench having been satisfied with the Petition filed by the Operational Creditor which is in compliance of provisions of section 8 & 9 of the Insolvency and Bankruptcy Code admits this petition declaring moratorium with the directions as mentioned below:

Accordingly, this Petition is admitted.

The Registry is hereby directed to communicate this order to both the parties and to IRP immediately.