Redington (India) Limited vs Everest International Private Limited

The Operational Creditor is engaged in the business and trade in supply of high-end technology and telecom products. Pursuant to the orders placed by the Corporate Debtor for goods, the Operational Creditor sold, supplied and delivered high-end Apple I-Phones to the Corporate Debtor. The Operational Creditor has issued 5 invoices with respect to the above order against which Rs.3,67,90,919.91/- (Rupees three crore sixty-seven lakh ninety thousand nine hundred nineteen and ninety-one paise only) is due and payable by the Corporate Debtor to the Operational Creditor.

Under the terms of Invoices, the payment is to be made within the date of the respective invoices, failing which the Corporate Debtor is bound and liable to pay interest @ 24% per annum for the delayed period. The details of the invoices and the debt fell due is as under:

The Corporate Debtor has never raised any dispute as to the quality, quantity or price of goods. Account balance confirmation was given by the Corporate Debtor dated 30.06.2016 to the Operational Creditor. Vide cheque dated 15.06.2017 bearing No. 174582 drawn on Kotak Mahindra Bank, Goregaon (west), Mumbai branch, the Corporate Debtor sought to pay partial outstanding amount of Rs.3,73,40,913/- (Rupees three crore seventy-three lakh forty thousand nine hundred thirteen only). However, the said cheque was dishonoured as per bank return advice dated 16.06.2017. In view of the said cheque, the Operational Creditor filed a complaint under section 138 of the Negotiable Instrument Act, 1881 before relevant court in Tamil Nadu being S.T.C. No. 275 of 2018. The proceedings of the same are pending before the Magistrate Court in Tiruchirapalli, Tamil Nadu.

The Corporate Debtor has made on account of part-payment a sum of Rs.5,00,000/- (Rupees five lakh only) to the Operational Creditor on 30.12.2017 vide bank transfer, reference no. 26454523, Transaction Cheque No. 017123000009687. Further, the Corporate Debtor has made another part-payment of sum of Rs.50,000/- (Rupees fifty thousand only) to the Operational Creditor on 31.03.2019 vide bank transfer, reference no. 1400100778, Transaction Cheque No. BCBMH19088553358.

The Corporate Debtor is into the business of distribution of electronic gadgets, smart phones etc. The Corporate Debtor replied vide letter dated 24.05.2018 to the Operational Creditor’s Demand Notice wherein the Corporate Debtor disputed the alleged amount as claimed by the Operational Creditor.

The Corporate Debtor vide its reply dated 24.05.2018 informed to the Operational Creditor that they have a claim of Rs.3,10,62,240.60/-(Rupees three crore ten lakh sixty-two thousand two hundred forty only) on the Operational Creditor. It was further informed them that the aforesaid amount shall be set off from the alleged claim amount. The summary of the aforesaid set off amount is as under:

The Operational Creditor sent a re-joinder to the said reply vide its letter dated 04.06.2018 but the Operational Creditor has not referred and relied upon the same in the Application filed by him. The Corporate Debtor specifically informed to the Operational Creditor in the reply dated 24.05.2018 that the Corporate Debtor upon receipt of credit notes and correct balance confirmation from Operational Creditor will immediately release the payment.

The Demand Notice was issued on 17.05.2018. the Corporate Debtor replied to the said notice within 10 days of its receipt. The Corporate Debtor in the said notice has disputed the claim made by the Operational Creditor and has very clearly stated that as per their ledger the outstanding amount due and payable to the Operational Creditor is Rs.57,28,675.92 (Rupees fifty-seven lakh twenty-eight thousand six hundred seventy-five and ninety-two paise only). The Corporate Debtor is willing to release that amount on receipt of credit note and correct balance confirmation from Operational Creditor. The Operational Creditor did not take any steps for more that two years and filed this present Petition.

In the present Application filed by the Operational Creditor, the outstanding claim amount is Rs.3,67,90,919.91/-, whereas in the notice issued under section 8, the outstanding claim amount is Rs.3,73,40,913/-.

The Corporate Debtor submits that the Operational Creditor has in the Application alleged that the Corporate Debtor issued a cheque dated 15.06.2017 for Rs.3,73,40,193/- and the same was dishonoured and therefore complaint under section 138 of Negotiable Instruments Act, is filed before the relevant court at Tamil Nadu. The said cheque was not given by the Corporate Debtor to the Operational Creditor. The Corporate Debtor has given about 5/6 blank cheques to the Operational Creditor towards security and the same were not to be deposited but the Operational Creditor misused the same after filing up the amount and name of the Operational Creditor without the consent and acknowledgement of the Corporate Debtor.

There is unequivocal admission of liability on the part of the Corporate Debtor in confirmation of balance statement dated 30.06.2016 signed by both the Operational Creditor and the Corporate Debtor which is at p.395 of the Petition;

The Corporate Debtor also admitted the amount of Rs.57,78,676/- vide its letter of reply to the Demand Notice which is at pp 416-418 as Exhibit “M” of the Petition.

The Date of Default is 25.01.2016.

The petition bearing CP(IB) 1431/MB-IV/2019 filed by Redington (India) Limited, the Operational Creditor, under section 9 of the IBC read with rule 4(1) of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiating Corporate Insolvency Resolution Process (CIRP) against Everest International Private Limited (“the Corporate Debtor”), [CIN: U32200MH1996PTC099972], is admitted.

There shall be a moratorium under section 14 of the IBC, in regard to the following:

The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;

Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein;

Any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002;

The recovery of any property by an owner or lessor where such property is occupied by or in possession of the Corporate Debtor.

Notwithstanding the above, during the period of moratorium,-

The supply of essential goods or services to the corporate debtor, if continuing, shall not be terminated or suspended or interrupted during the moratorium period;

That the provisions of sub-section (1) of section 14 of the IBC shall not apply to such transactions as may be notified by the Central Government in consultation with any sectoral regulator;

The moratorium shall have effect from the date of this order till the completion of the CIRP or until this Tribunal approves the resolution plan under sub-section (1) of section 31 of the IBC or passes an order for liquidation of Corporate Debtor under section 33 of the IBC, as the case may be.

Public announcement of the CIRP shall be made immediately as specified under section 13 of the IBC read with regulation 6 of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

Mr. Hemant Kumar Shah, registration No. IBBI/IPA-001/IP-P01936/2020-2021/13037; E-mail: [email protected], as Interim Resolution Professional to carry the functions as mentioned under IBC, the fee payable to IRP/RP shall comply with the IBBI Regulations/Circulars/Directions issued in this regard. The IRP shall carry out functions as contemplated by Sections 15,17,18,19,20,21 of the IBC.

During the CIRP Period, the management of the Corporate Debtor shall vest in the IRP or, as the case may be, the RP in terms of section 17 of the IBC. The officers and managers of the Corporate Debtor shall provide all documents in their possession and furnish every information in their knowledge to the IRP within a period of one week from the date of receipt of this Order, in default of which coercive steps will follow.

The Operational Creditor shall deposit a sum of Rs.5,00,000/- (Rupees five lakh only) with the IRP to meet the expenses arising out of issuing public notice and inviting claims. These expenses are subject to approval by the Committee of Creditors (CoC).

The Registry is directed to communicate this Order to the Operational Creditor, the Corporate Debtor and the IRP by Speed Post and email immediately, and in any case, not later than two days from the date of this Order.

A copy of this Order be sent to the Registrar of Companies, Maharashtra, Mumbai, for updating the Master Data of the Corporate Debtor. The said Registrar of Companies shall send a compliance report in this regard to the Registry of this Court within seven days from the date of receipt of a copy of this order.