Northern Freight Carrier, (Delhi) vs Super Flooring Private Limited

This is a petition filed under section 9 of the Insolvency and Bankruptcy Code, 2016 (for brevity 'the Code') read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity 'the Rule') with a prayer to admit the company petition for the action of Corporate Insolvency Resolution Process in respect of the respondent corporate debtor.

The Respondent Super Flooring Private Limited, bearing CIN No. U74899DL1988PTC032776 is incorporated on 11.08.1988, having its registered office at A-292, New Friends Colony, Mathura Road, New Delhi.

Operational Creditor which is a Partnership Firm is engaged in the business of transporting goods. It is the case of the applicant that the Operational Creditor is carrier /transporter rendering service of transportation of consignments to the corporate debtor.

It is further submitted by the applicant that on completion of transportation of goods, the Corporate Debtor did not pay the outstanding amount despite several demands.

It is also submitted by the applicant that on account of default committed by the respondent, the applicant issued demand notice under Section 8 of the Code on 30.07.2018 for an amount of Rs. 37, 15,583.62/-towards transportation of goods. However, respondent did not issue any reply to this demand notice.

The respondent has filed its reply dated 12.11.2018 to this petition before this Tribunal. The Respondent in its reply has submitted that the Operational Creditor has not complied with the basic requirements of Section 9 (3)(a). Further the Respondent has submitted that the Operational Creditor has concealed from this Hon'ble Tribunal the material documents such as agreed slab between the parties, the credit notes issued by the Operational Creditor for all excess payments etc. made by it and emails pointing out the discrepancies in the few invoices issued by the Corporate Debtor.

The respondent has contended that the basis or genesis of the aforesaid slab is the slab set by CONCOR. The slab of CONCOR is a little on the lower side, CONCOR being a Public Sector undertaking. Operational Debtor has applied for certified copies of the CONCOR slab through RTI.

The respondent has further contended that whenever an excess amount of bill was generated by the Operational Creditor debit notes systematically were issued by the Operational Debtor and duly intimated to the Operational Creditor. Intimation was also made to the Operational Creditor via e-mail and phone calls that he was charging exorbitantly way beyond the agreed slabs. The Copies of the debit notes issued by Corporate Debtor to Operational Creditor have been filed along with the reply.

It is the case of the respondent that several debit notes were issued to the applicant as listed in brief below:

However, Copies of the debit notes enclosed by the Respondent donot show any receipt by the Operational Creditor.

It is further submitted by the respondent that even today the Operational Debtor is availing the same transportation services for his business from another agency namely M/s. Ganpati Freight Carriers. The services are being availed at an agreed slab rate which is much less in proportion to what has been levied by the Operational Creditor in the bills attached to the instant application.

It is further contended by the respondent that the intention of the Corporate Debtor was never to withhold any legitimate payment of the Operational Creditor. Corporate Debtor suo motu made the payments to the tune of Rs. 6 Lakhs between July 2016 to March 2017 towards full and final settlement of accounts of the Operational Creditor. However, no copy of any settlement deed has been filed.

The applicant has filed the rejoinder dated 04.12.2018 against the reply filed by the respondent. The applicant has submitted that the Operational Creditor has rendered services as per the requirement of the Corporate Debtor. All the duly receipted consignment notes annexed with the petition filed. Contents of the reply are an afterthought. Prior to filing of the petition, no dispute whatsoever regarding rate and slab of payment had ever been raised. No e-mail regarding discrepancies in any invoice annexed with the petition had ever been sent.

The applicant has further contended that the Respondent was dealing with the petitioner since 2013 and the respondent had made interim payments in lieu of services rendered. These payments details have been shown vide statement of bank account annexed with the petition. Now the respondent in a mala fide manner is deliberately raking the non-issue at this juncture. In this connection Respondent is required to produce any bilateral agreement regarding payment slab. The true copy of the alleged agreed slab annexed with the reply and marked as annexure R-2 of the reply is without any signature of either of the parties. As such it cannot be construed as agreed slab between the parties.

It is also submitted by the applicant that the CONCOR slabs cannot be at par with the transportation of goods as the rates charges are as per bilateral agreement because apart from transportation, the charges of the Operational Creditor include incidental expenses viz. labour at door to door collection and delivery. It is vehemently denied that debit notes were issued by the Corporate Debtor whenever an excess amount of bill was generated by the operational creditor. No intimation on phone or e-mail was made regarding over charging. Instead time to time interim payments were made as shown by the bank statement annexed with the petition and subsequent consignments were transported and duly delivered by the operational creditor as per the directions of respondent. Invoices and respective consignment notes have already been annexed with the petition. Debit notes annexed as Annexure R-5 of the reply are unilaterally drawn by the respondent and have never been communicated prior to the reply submitted by the respondent.

It is further submitted that the annexed copy of email allegedly stating to be intimation of overcharging and unilaterally act and a ploy to create superfluous ground to deny the payment of legitimate debt for service rendered by the Operational Creditor.

It is also submitted by the applicant that the Respondent availing services of another agency does not absolve the respondent from debt already created due to services provided by the Operational Creditor. It is further submitted by the applicant that the Operational Creditor is not bound by the bills issued by the alleged carrier namely M/s. Ganpati Freighter Carrier. Respondent is unnecessary comparing the rate of other carrier for the services rendered by the Operational Creditor. Respondent has not specified the details of invoices of the M/s. Ganpati Freighter carrier.

It is further contended by the applicant that the reply is correct to the extent that the operational debtor has made payment to the tune of Rs. 6 lakhs between July 2016 to March 2017. But the said payment is a part payment. It is vehemently denied that 6 lakh is full and final payment. It is submitted that full and final payment due up to 30.06.2018 is Rs. 37,15,583/62.

It is further submitted by the applicant that annexure R-8 of the reply does not reflect the true position of the outstanding amount. The extracts of pages from 12 to 25 of the petition is reiterated wherein each and every entry is incorporated and thereby the resultant amount of Rs. 37,15,583/62 is due to the Operational Debtor.

Heard the Applicant and perusal of the

The main ground raised by the respondent in its reply against the petition filed by the applicant is that the respondent has issued debit notes to the applicant. However, after seeing the copies of the same as annexed with the reply, it can be seen that the said debit notes have not been signed by the Operational Creditor. The applicant in its rejoinder has also contended that debit notes were required to be issued by the Corporate Debtor whenever an excess amount of bill was generated by the operational creditor. No intimation on phone or e-mail was made regarding over charging. Instead time to time interim payments were made as shown by the bank statement annexed with the petition and subsequent consignments were transported and duly delivered by the operational creditor as per the directions of respondent.

Another ground as raised by the respondent in its reply is regarding the payments of Rs. 6 Lakhs between July 2016 to March 2017 towards full and final settlement of accounts of the Operational Creditor. However, no documents on record have been filed by the respondent to prove the same. The petitioner in its rejoinder has submitted that the said payment is a part payment. It is vehemently denied by the applicant that Rs. 6 lakhs is full and final payment. However, it is submitted that full and final payment due up to 30.06.2018 is Rs. 37,15,583/62 including interest.

It is also pertinent to note that the Respondent was dealing with the petitioner since 2013 and the respondent had made interim payments in lieu of services rendered. Also there is no written agreement between the parties and there is also no invoice wise payment made between the parties.

There would still be an outstanding demand of more than Rs 1 Lakh is pending. Hence in this case CIRP can be initiated. Both the parties have confirmed about the transactions between them. The invoices raised by the Operational Creditor have not been disputed by the Corporate Debtor. No evidence of prior dispute regarding rate has been given apart from the email dated 05.04.2014, which has not been followed up by the Corporate Debtor

There being default in payment of claimed amount, and the respondent has failed to establish the fact that there is a pending dispute between the parties in respect of the amount claimed, such application deserves to be admitted for triggering Corporate Insolvency Resolution Process against the respondent corporate debtor.

Therefore, on fulfilment of the requirements of section 9 (5) (i) (a) to (d) of the Code, the present application is admitted.

In pursuance of Section 13 (2) of the Code we direct that public announcement shall be made by the Interim Resolution Professional immediately (within 3 days as prescribed by Regulations) with regard to admission of this application under Section 7 of the Code.

We also declare moratorium in terms of Section 14 of the Code. The necessary consequences of imposing the moratorium flows from the provisions of Section 14 (1) (a), (b), (c) & (d). These the following prohibitions are imposed:

It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Central Government or the supply of the essential goods or services to the Corporate Debtor and may be specified, are not to be terminated or suspended or interrupted during the moratorium period. In addition as per the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 which has come into force until 06.06.2018, the provisions of moratorium shall not apply to the surety in a contract of guarantee to the corporate debtor in terms of Section 14 (3)(b) of the Code.

The Interim Resolution Professional shall perform all his functions contemplated, inter-alia, by Sections 15, 17, 18, 20 & 21 of the Code and transact proceedings with utmost dedication, honesty and strictly in accordance with the provisions of the ‘Code’, Rules and Regulations. It is further made clear that all the personnel connected with the Corporate Debtor, its promoters or any other person associated with the Management of the Corporate Debtor are under legal obligation under Section 19 of the Code to extend every assistance and cooperation to the Interim Resolution Professional as may be required by him in managing the day to day affairs of the ‘Corporate Debtor’. In case there is any violation, the Interim Resolution Professional would be at liberty to make appropriate application to this Tribunal with a prayer for passing an appropriate order. The Interim Resolution Professional shall be under duty to protect and preserve the value of the property of the ‘Corporate Debtor’ as a part of its obligation imposed by Section 20 of the Code and perform all his functions strictly in accordance with the provisions of the Code, Rules and Regulations.

The office is directed to communicate a copy of the order to the Operational Creditor, the Corporate Debtor and the Interim Resolution Professional at the earliest possible time for later than seven days from today.

The applicant has not proposed the name of the IRP in the application. The Insolvency and Bankruptcy Board of India vide its letter dated 01.01.2018 has recommended a panel of Insolvency Professionals for appointment as Insolvency Resolution Professional in compliance with Section 16 (3) (a) of the Code in order to cut delay. Accordingly, we appoint Mr. Prabhat Ranjan Singh as an Interim Resolution Professional. His registration number is IBBI/IPA-002/IP-N00428/2017-2018/11239, Email Id [email protected], Mobile: 8076191745. The aforesaid Interim Resolution Professional has no disciplinary proceeding pending against him nor has anything else been pointed out with regard to his antecedents. The Interim Resolution Professional has filed necessary declaration in accordance with the IBBI Regulations and the provisions of the Code.

The petitioner is directed to pay a sum of Rupees two lakhs to the Interim Resolution Professional to meet out the expenses to perform the functions assigned to him in accordance with Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016. This shall however be subject to adjustment by the Committee of Creditors as accounted for by Interim Resolution Professional and shall be paid back to the petitioner.

Let the copy of the order be supplied to the parties including the Board.