Shika Enterprises vs Ceasan Glass Private Limited

M/s. Shika Enterprises, (hereinafter referred to as the Operational Creditor) has filed the present petition against M/s CEASAN GLASS PRIVATE LIMITED (hereinafter referred to as Corporate Debtor) to initiate the Corporate Insolvency Resolution Process (CIRP). The Operational Creditor claims that the Corporate Debtor had defaulted in making payment of Rs.95,00,000/- (Rupees Ninety Five Lakhs) which includes interest and cost raised against the supply of goods. Hence this Petition under section 9 of Insolvency and Bankruptcy (Code) 2016, r/w Rule 6 of Insolvency and Bankruptcy Code (Application to the Adjudicating Authority) Rule 2016, seeking admission of the Petition, initiation of Corporate Insolvency Resolution Process (CIRP), granting moratorium and appointment of IRP as prescribed under the Code and Rules.

The Counsel for the Operational Creditor submits that in the course of the business operations the Corporate Debtor has approached the Operational Creditor for supply of chemicals thereby the Operational Creditor supplied the material.

The Corporate Debtor failed to pay the cost of the material, due to which the Operational Creditor was constrained to file a suit in OS No.235 of 2014 on the file of XII ACJ, CCC, Secunderabad and a decree was passed in the said suit on 21.02.2017. No execution proceedings are pending before the Court in respect of the said decree. The Corporate Debtor did not honour the decree. The debt arose out of business transactions. The Operational Creditor got issued Demand Notice dated 09.12.2019 under section 8 (1) of IBC, 2016 with a demand for payment of Rs.95,00,000/- and the same was served on the Corporate Debtor as per rule 5 (2) (b) of IBC, 2016, but no reply was issued to the said notice.

Corporate Debtor made discreet enquiries in the market and came to know that the Corporate Debtor is indebted to several vendors and financial institutions and that the Corporate Debtor is not in a position to pay his debt. Non-issuance of reply to the Demand Notice of the Operational Creditor dated 09.12.2019 amounts to admitting the debt by the Corporate Debtor and no dispute was raised by the Corporate Debtor. Having no other alternative, the Operational Creditor approached this Tribunal by way of this petition.

The Counsel submits that the Ministry of Corporate Affairs, GOI website shows that the Corporate Debtor failed to file balance sheet and other financial statements upto 31.03.2016 (a copy is also enclosed). The arguments of the Counsel for the Operational Creditor are heard. None appeared for the Corporate Debtor. Hence virtue of the order dated 11.03.2021, the Corporate Debtor was set ex parte.

The records revealed that inspite of the Corporate Debtor falling due to the Operational Creditor, he failed to make any payment. He did not even respond to the Demand Notice. The Copy of the Demand Notice delivered by the Operational Creditor to the Corporate Debtor is on record. The Affidavit filed by the Operational Creditor shows that no reply is given by the Corporate Debtor relating to the dispute of the unpaid operational debt. The Copy of the financial statement furnished by the financial institutions is also filed. Hence, this Application is found to be complete. I am therefore of the view that the Petition merits favourable consideration and that it is a fit case to admit and order initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Operational Creditor did not suggest any name as IRP. Hence the Tribunal appoints Mr. Srinivas Gudla Rao (Registration No. IBBI/IPA-001/IP-P-02093/2020-2021/13333), as the Interim Resolution Professional.

The Company Petition is admitted ex parte. The Corporate Insolvency Resolution Process of the Corporate Debtor shall commence from this date and shall be completed within 180 days hence.