Petroserv Corporation FZC vs John Energy Limited

The present petition has been filed without the proper authorization of the said purported Operational Creditor.

The Operational Creditor has not signed the petition and has not affirmed the affidavit in support of the present petition.

The petition is based upon the Power of Attorney given by one Mr. Souid Hassen in favour of one Mr. Sahil Bhatia.

The said Power of Attorney is not stamped as per Gujarat Stamps Act 1958.

Demand notice dated 09.04.2019 was issued by one Ardent Legal through the advocate for the Petitioner and there is nothing on record to substantiate that the said Ardent Legal was authorized by the Petitioner to issue the alleged demand notice.

The Power of Attorney was executed in February 2020 i.e., after the date of issuance of the alleged demand notice.

There is a gross delay in filing the petition. The demand notice dated 09.04.2019 was replied on 29.04.2019 and the present application has been filed almost 23 months after the issuance of the demand notice. The time gap between the issuance of the demand notice and the filing of the petition has not been explained and is beyond reasonable time.

Annexure-2(d) and 2(e) are fabricated, concocted and false and were not forming part of the demand notice.

The loan letters/certificates/acknowledgements were never issued by the Respondent Company and were created only to maintain this petition.

Annexure-2(d) and 2(e) are signed by one Mr. Praveen Gautam with whom there are several disputes of the Respondent Company. The said Praveen Gautam has colluded with other persons including Mr. Sahil Bhatia and has inter alia fabricated documents with a view to extort money from the Respondent-Company.

The Respondent-Company has lodged a complaint before the concerned police station against the said Mr. Praveen Gautam, Mr. Sahil Bhatia and Mr. TaharSouid, inter alia, for forgery and various other offences.

The said Mr. Praveen Gautam used to work under the instruction of Mr. Mahesh Vyas as per the Board Resolution dated 28.06.2012. Mr. Praveen Gautam was not working for the Respondent Company when the documents at Annexure-2(e) and 2(d) were purportedly issued and these documents are bogus, backdated, forged and subject matter of criminal investigation.

The Respondent Company came to know about these documents only when the said petition was served upon the Respondent. Respondent, thereafter, draws attention to Clause 16 of the said agreement which is reproduced below:-

The Respondent, thereafter, has given the background of the transactions. According to the Respondent, the drilling rigs, namely, John no. 16,17,26 and 20 were sent to Tinerhert Block in Amenas, Algeria to carry out certain works. Upon completion of the said work the rigs were required to be transported back to India and for which two contracts have been entered into between the Operational Creditor and the Respondent.

Thereafter, the Respondent has narrated the salient features of the two contracts.

It is the case of the Respondent that the Applicant has breached the various clauses and has not provided the requisite number, size and capacity of trucks/trailers at rigs site within the stipulated time and has failed to execute the desired contracted work as per timelines given to them resulting into delay in transportation, shipping etc., and also additional financial burden of the Respondent.

The Respondent was required to transport entire Rig no. 16 &17 and Rig no. 26 & 20 to the Indian Port along with all materials, equipment and inventories therein in good condition. However, the Respondent has not transported each and every material, equipment and inventory as were there in Rig no. 16 &17, 26 & 20. The Petitioner had retained some of the materials, equipment and inventories at ANS-BP-757-ZI-HASSI MESSAOUD, ALGERIA at the premises of NaftCom (sister concern of the Petitioner). Copy of such retained materials, equipment and inventories is enclosed herewith marked as Annexure F hereto. The value of retained materials, equipment and inventories is around 330 032 093.07 DZD which is equivalent to INR 19,28,72,156.64.

It is stated that as per contract the goods once loaded on the equipment shall be at the sole risk and complete responsibility of the contractor and any losses arising out of damage, non-delivery, short-delivery and delay in delivery, theft, pilferage, accident, fire etc., shall be the liability of the Contractor. The said goods while in the possession of the Petitioner were stolen/misplaced for which the Petitioner alone is responsible.

Consequently, the Respondent had to purchase such materials, equipment and inventories from the market in order to install Rigs at other places, and accordingly, the Respondent had to incur a cost of Rs.27,77,60,593.86. Copy of purchase of such materials, equipment and inventories from the market in order to install Rigs at other places is enclosed herewith marked as Annexure G- of reply.

It is stated that the time is the essence of the said contract with the Petitioner and the Petitioner vide Clause 12.1 of the Contract was responsible and obliged to carry out the services and take all necessary steps to ensure the smooth and timely performance of the services. However, the Petitioner not only provided incomplete services but also provided such incomplete services delayed. On receipt of the delivery of Rigs from the Petitioner, the Respondent Company was supposed to deploy such Rigs at site of Oil and National Gas Corporation Limited (“ONGC”). However, as the Petitioner could not deliver the Rigs on time, and accordingly, the Respondent got delayed in deploying the Rigs at ONGC site, which resulted into levy of Liquidated Damages of Rs.11,15,17,157.50 (US $ 15,93,102.25) by ONGC onto the Respondent. The same has been levied solely due to the acts and omissions of the Petitioner. Copy of Liquidated Damages of USD 192081.25 levied by ONGC for the delay in deploying Rig no. 16 is attached as Annexure – H to reply.

Clause 7.1 of the Contract, provides that Contractor (Petroserve) shall be responsible for the safe transportation of Goods. In case of any shortage and/or damage of goods, the entire cost of such shortage and/or damages, as determined by the Respondent shall be recovered from the Petitioner. The Petitioner has provided very poor quality of services and in a very unprofessional manner by not handling of materials as per adopted practices. The Petitioner has not properly packed the equipment for shipments causing the damage of the same during loading into the ship and during the trans-shipment from Algeria to India. An independent Surveyor and Assessor Mr. Umang S. Ramani, Chartered Engineer, Surveyor & Loss Accessor has submitted a report for Rig no. 26, copy of which is enclosed herewith marked as Annexure-I to reply. Mr. Umang. S. Ramani has reported that as per Ship Master's bill of lading, all equipment was found partially broken, rusty, dented, scratched etc., wooden cases were broken due to weak packaging, bunker houses was deformed on sides, the wood cover of package 5 missing, doors were open in few packages etc. Moreover, other details in respect of the missing/damage caused to other rigs is attached herewith and marked as Annexure J to reply.

In spite of various requests and reminders, Applicant also failed to return Bank Guarantees to Respondent which were submitted to Algerian Customs for a total amount of 8653765800 DZD till date. Due to this reason the Respondents were not able to present these bank guarantees to bankers for cancellation and Respondent has been forced to pay a heavy amount to keep these BGs alive. Respondent has already paid approximately Rs.53,28,513/-towards renewal charges of these BGs. The Respondent is also not able to get the release of deposit money kept with the banks. Copy of the communication with the list of Bank Guarantees is enclosed herewith and marked as Annexure K. Moreover, vide letter dated 24.04.2020 (Copy at Annexure L) the Illizi Customs authority has held that the said Bank Guarantees have been returned to our authorised representative viz. the Petitioner herein. However, the Petitioner has not returned the same to the Respondent which has resulted in huge loss to the Respondent Company.

Therefore, on account of short-delivery/non-delivery, purchase of new material, damaged/stolen/missing material during the transit, levy of LD charges on account of delay in deployment of Rig, bank charges etc., Respondent had to incur loss/cost of Rs.58,74,35,280.09 which is required to be recovered from Applicant as per the terms and conditions of the impugned contracts. Summary of amount to be recovered is tabulated hereunder:-

In respect of the very same dispute the Petitioner had filed an complaint before the Director General of Foreign Trade inter alia raising concerns in respect of the alleged unpaid invoices. The Respondent had given a detailed reply dated 04.12.2019 (copy at Annexure-M) and in view of the reasons given in the said reply no steps were taken against the Respondent. Moreover, the Respondent has also filed a complaint dated 08.06.2020 (copy at Annexure-N) against the Petitioner before the Addl. Director General of Foreign Trade in respect of the aforementioned breaches committed by the Petitioner and the loss caused to the Respondent due to the said acts and omissions of the Petitioner.

The Respondent had relied upon the following judgments:

Mobilox Innoventions (P) Ltd. vs Kirusa Software (P) Ltd.

There is no dispute or protest.

There are numerous email communications between the parties where the reminders were given for payment and no disputes were raised.

The Operational Creditor relies again upon the appreciation letters and recommendation letters.

Mr. Praveen Gautam according to the Applicant was responsible and was in service when the appreciation letters and certificates of recommendation were issued.

The police complaint was filed maliciously.

The Operational Creditor reiterates that the Auditor appointed by ICICI Bank for the Special Audit of the Corporate Debtor confirmed vide their email dated 07.02.2019 that the book of accounts of the Corporate Debtor reflects a credit balance under the head Operational Payable of USD 33,20,687.

The Power of Attorney was duly stamped within three months from the date of receipt in India.

The Hon’ble Apex Court in the matter of Macquaire Bank Limited v. Shilpi Cable Technologies Limited had held that a demand notice delivered by an advocate duly instructed by the Operational Creditor would be a valid notice for the purpose of initiation of CIRP and, hence, notice given by the Operational Creditor is a valid notice.

The Operational Creditor was only a service provider and dispatched the materials supplied to them by the supplier of the Corporate Debtor and is neither liable nor responsible for non-delivery or short delivery, if any.

The goods were safely transported by the Applicant and for which no grievance was received from the Corporate Debtor.

The counterclaim is an afterthought and is denied.

The Corporate Debtor has suffered losses from the year 2017-18 to the year 2020-21 and thus is not a viable unit as claimed by the Respondent.

Thereafter, the Applicant has relied upon the following cases:-

The Respondent through its Advocate vide letter dated 29.04.2019 furnished Reply/Notice of Dispute to the Demand Notice dated 09.04.2019 issued by Ardent Legal on behalf of the Applicant. The said Reply/Notice of Dispute along with all annexures are at Annexure II(j) on pg. nos. 212 to 344 of the application filed by the Applicant. In the said Reply /Notice of Dispute, the Respondent had furnished Annexure-A to show the details of retained materials, equipment, and inventories at ANS-BP-757-ZI HASSI MESSAOUD, ALGERIA - the premises of NaftCom (sister concern of the Applicant) for declared value of 330 032 093.07 DZD. (Para 11 at Pg. Nos.219 with Pg. Nos. 228 to 253). In the said Reply/Notice of Dispute, the Respondent had also furnished Annexure - B insurance premium charged by the Algerian Insurance Company on 28.03.2019 for the period 26.03.2019 to 25.03.2020 for the property (i.e., materials, equipment, and inventories) lying at ANS-BP-757-ZI HASSI MESSAOUD, ALEGERIA on declared value of 330 032 093.07 DZD (para 11 at page no. 219 with pg. 254-255). The said insurance premium was paid on 28.03.2019 prior to the issue of demand notice on 09.04.2019.