Mrs. Alpa Rajeev Shah vs M/s Kevin Ventures LLP & Anr.

[Per: Arun Baroka, Member (Technical)]

The present appeal is filed under Section 61(1) of the Insolvency & Bankruptcy Code, 2016 (hereinafter referred as “IBC”) by Mrs. Alpa Rajeev Shah, Suspended Designated Partner of M/s Kevin Ventures LLP, the Corporate Debtor – CD, against the order dated 14.09.2023 passed by the National Company Law Tribunal, Mumbai Bench at Mumbai [Adjudicating Authority] in Company Petition (IB) No. 386/MB/2022 under Section 9 on the petition of M/s PMC YM-Pharma Private Limited the Operational Creditor and Respondent No.2 in this CIRP in this Appeal.

Counsels for both parties were heard and the records perused.

The present petition is filed against the CD - M/s Kevin Ventures LLP-by the Operational Creditor M/s PMC YM-Pharma Private Limited under Section 9 read with Rule 6 of the Insolvency & Bankruptcy Rules for a resolution of total operational debt of Rs. 3,84,61,125/-, which included a principal amount of Rs.2,73,09,675/- and interest of Rs.1,11,51,450/-. Operational Creditor is a company registered with the Registrar of Companies, West Bengal and is a subsidiary of a foreign company and into manufacturing of various chemical products, intermediates of pharmaceuticals bulk drugs etc. And the Corporate Debtor M/s Kevin Ventures LLP is a registered LLP which is carrying out the wholesale trade and commission trade except for motor vehicles and motorcycles. The Corporate Debtor purchased goods from Operational Creditor against 9 purchase orders. The Operational Creditor delivered the goods, raised e-way bills, paid GST to the Government on account of Corporate Debtor and raised invoices on CD. The CD took delivery of the goods without any demur or dispute. The CD also paid a sum of Rs.68,18,925/- during the period of 01.04.2017 to 31.03.2018 and Rs.33,06,900/- during 01.04.2018 to 31.01.2022, a total of Rs.1,01,25,825/- against total invoices amount of Rs.3,74,35,500/-. An amount of Rs.27,30,967/- towards principal and interest of Rs.1,11,51,450/- towards interest remained outstanding from the last date of payment i.e. 18.03.2019 to 18.02.2022. A total outstanding of Rs.3,84,61,125/- is payable to the Operational Creditor by the Corporate Debtor. On 20/01/2021, the Operational Creditor also issued a demand notice under IBC provisions demanding to pay the outstanding amount with up-to-date interest. The Corporate Debtor acknowledged the notice but neither paid the outstanding amount nor raised any pre-existing dispute. The Corporate Debtor also confirmed the outstanding debt of Rs.2,73,09,675/- as well as the statement of account as at 31.05.2018 and 15.10.2019, sent by the Operational Creditor vide e-mails dated 09.06.2018 and 15.10.2019. In these circumstances, Operational Creditor had submitted that the Corporate Debtor was liable to pay a total sum of Rs.3,84,61,125/-, which includes Rs.2,73,09,675/- towards principal and Rs.1,11,51,450/- towards interest. Basis above, the Adjudicating Authority has concluded that there is a debt payable by the Corporate Debtor and it has defaulted to pay and as there is no pre-existing dispute raised by the Corporate Debtor, hence this a fit case for admitting Corporate Debtor into CIRP.

The Appellant claims that the petition is seriously time barred. Further, the Appellant claims that the Director of Respondent No.2 who has filed the Company Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) under oath, that he was personally aware of the facts of the matter, had joined the Company as a Director on 24.06.2019 i.e. more than 16 months after the alleged purchase order and tax invoices. Appellant also claims that the Adjudicating Authority has admitted under Section 9 proceeding on the basis of only statement of account dated 31.05.2018 and 15.10.2019. Appellant also claims to have contradicted the alleged demand notice issued on 18.02.2022.

Appellant also submits that there is a pre-existing dispute as he had raised the issue of damaged goods supplied by Respondent No. 2 PMC YM-Pharma Private Limited. Appellant also claims that due to faulty packing it has suffered losses. Appellant also claims that it had received a letter from M/s Dhanlaxmi Warehousing Company stating that the LRs produced by the Respondent No. 2 are false, as they have not received any material from Respondent No. 2 or collected any material on behalf of Respondent No.1 against the said notices and delivery challans of Respondent No. 2.

The Appellant has also submitted that the screen shots of GST which are produced by the Operational Creditor can be tampered by reversal or could be changed by Respondent No.2 any time after issuance. Appellant further claims that the documents submitted by Operational Creditor pertaining to the invoices, e-way bills, delivery challans and lorry receipts are self-contradictory and in some cases the vehicle numbers were also found to be fictitious.

Appellant’s case is mainly hinging around the fact that adjudicating Authority has not considered the disputes raised by Respondent No.1. Further it claims that there is a mismatch of invoices in both the documents Section 9 Petition and demand notice submitted by Respondent No.2. Appellant claims that the Adjudicating Authority has failed to ascertain and determine the debt and default as defined within the Code. It also raised the question of initiation of CIRP and it could be raised only if the CD was bankrupt and insolvent and not otherwise.

After hearing the counsels of both sides and perusing all the documents on the claim of the Appellant that the petition is seriously time barred, we find that the matter has been examined by the AA in detail and given its findings. The OC had on 18.02.2022 issued Section 8 notice alongwith the invoices which are relevant for the demand notice. Petition before the AA also contains confirmation of accounts, which is dated 15.10.2019 and is for the period from 01.04.2018 to 31.03.2018, where in the closing balance payable to the Operational Creditor is acknowledged as Rs.2,73,09,675/, which is signed by the authorised signatory of the Corporate Debtor Mr. Rajeev Shah. This confirmation of account for the period from 01.04.2017 to 31.05.2018 is available on record. On the basis of the above the Adjudicating Authority has after analysing all the above facts come to a conclusion that there is a debt exceeding Rs.1 Crore, which had become due and which has not been paid. The grounds for time barred claims cannot be accepted as the petition was filed on 10.03.2022 and the date of confirmation of accounts by the CD is 15.10. 2019 and this is part of record and therefore within limitation period and is not time barred.

Furthermore, claims of the Appellant that the OC who has filed the Company Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) under oath, that he was personally aware of the facts of the matter, had joined the Company as a Director on 24.06.2019 i.e. more than 16 months after the alleged purchase order and tax invoices. This is a specious argument as he is a authorised representative and the grounds are not supporting the Appeal.

The Adjudicating Authority has also gone into the submission of the Corporate Debtor on the letter obtained from M/s Dhanlaxmi Warehousing Company wherein, is has been mentioned that on those dates of invoices raised by the Operational Creditor, no material was received by them. AA has returned its finding that the dates mentioned therein are the dates of invoices and not the dates of delivery. Furthermore, he has returned finding that this a third-party document obtained by Corporate Debtor. We do not find any error with this finding.

The Operational Creditor has also placed on record the concerned e-way bills which authenticate the dispatch of material. Further the Operational Creditor has produced the print outs taken from the website of GST department to further corroborate that the Corporate Debtor has availed the ITC of IGST on the supply of material. This is a clear admission on the part of Corporate Debtor of the receipt of material. Thus, the contention of the Corporate Debtor that no goods were received by them is not found to be acceptable. Appellant’s claim that the screen shots of GST which are produced by the Operational Creditor can be tampered by reversal or could be changed by Respondent No.2 any time after issuance are mere conjectures and do not support his case when other corroborating evidence is available.

Appellant also submits that there is a pre-existing dispute as he had raised the issue of damaged goods supplied by the OC. Appellant also claims that due to faulty packing it has suffered losses. The Corporate Debtor claims to have raised many issues with respect to the complaints over telephone as well as in person and basis that claims existence of pre-existing dispute. But no documentary evidence has been produced with respect to that so that we cannot accept it as an argument. On the other hand, the statement of account has been authenticated by its representative without any demur, which proves the debt.

The Adjudicating Authority has also found contradictions in the statements of the Corporate Debtor. Corporate Debtor denies that confirmation of accounts by Mr. Rajeev Shah and submits that this is not the signatures of any designated partners of the Corporate Debtor or the authorised signatory of the Corporate Debtor. Adjudicating Authority notes that the additional affidavit filed by the Corporate Debtor before it also have the signature of the same Mr. Rajeev Shah with the same seal of the Corporate Debtor as authorised signatory on every page including as deponent. Therefore, the submission of the Corporate Debtor is found to be misleading and away from the facts.

Appellant’s claims that it had an arrangement with Operational Creditor by which the alleged invoices were drawn without actually executing the trade transaction and/or movement of the goods covered under the invoices - cannot stand the scrutiny as it is found to be contradictory. In other parts of the petition as well as in this appeal, it has given various details with respect to the disputes particularly, when he claims that goods dispatched were not properly packed. Therefore, it can be safely concluded that the grounds taken by the Corporate Debtor that it was an arrangement and no such goods were being exchanged cannot be relied upon.

Undeniably the purchase orders have been placed by the Corporate Debtor and the goods have been supplied by the Petitioner. Invoices have been raised by the Petitioner, part payment have also made by the Corporate Debtor and there is also a confirmation of balance in the shape of statement of accounts, which is duly acknowledged and signed by the authorised signatory of the Corporate Debtor. Further, there is evidence to prove the supply of the material to the Corporate Debtor and it has also availed ITC of GST on the goods received by it. Based on these facts, the Adjudicating Authority has come to a conclusion, that all the issues raised by the Corporate Debtor have been duly noted and findings have been returned on all the issues raised in the Corporate Debtor, basis the documentary evidence available with it. After hearing both the parties the Adjudicating Authority has come to a conclusion that the petition is admissible and accordingly it has passed the Section 9 proceedings for CIRP against the Corporate Debtor namely, M/s Kevin Ventures LLP.

The Adjudicating Authority has on the basis of all the documents come to a conclusion that CIRP proceedings should be initiated against the Corporate Debtor under Section 9 of the Code, and for the above-mentioned reasons, we do not find any error in the findings. We accordingly dismiss the Company Appeal (AT) (Insolvency) No. 1526 of 2023 & I.A. No. 5489 of 2023.