Sterling and Wilson Private Limited vs Ozone Projects Private Limited

Per: R. SUCHARITHA, MEMBER (JUDICIAL)

Under Adjudication is CP/IB/131/CHE/2021 filed by Sterling and Wilson Private Limited (hereinafter referred to as 'Operational Creditor') under Section 9 of the Insolvency & Bankruptcy Code 2016 (in short, 'I&B Code, 2016') r/w Rule 6 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 against Ozone Projects Private Limited (hereinafter referred to as 'Corporate Debtor'). The Application is filed to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor.

Part-I of the Application sets out about the Operational Creditor from which, it is evident that the Operational Creditor is a Private Company Limited by shares which was incorporated under the Companies Act, 1956 on 13/06/1974 with CIN No: U31200MH1974PTC017538. The Registered office of the Operational Creditor is situated at 9th FLOOR, Universal Magestic, P.L. Lokhande Marg, Chembur Mumbai-400043, Maharashtra, India. Part-II of the Application gives all the particulars of the Corporate Debtor from which it is evident that the Corporate Debtor is a Private Limited Company with CIN: U70101TN2005PTC056894 and was incorporated on 13/07/2005 under the Companies Act, 1956. The Registered Office of the Corporate Debtor as per the Application is stated to be situated at New No.63, G.N.Chetty Road, T. Nagar, Chennai-600017. From Part III of the application, it is seen that the Operational Creditor has not proposed the name of the "Interim Resolution Professional" and left it to the discretion of this Tribunal.

The Affidavit verifying the application is placed at page no's 45-46 of the Application typeset and Mr. S.K. Anantharaman, the commercial Head MEP of Tamil Nadu and Kerala, of the Operational Creditor/Applicant has sworn the Affidavit as the authorized representative of the Operational Creditor vide Board Resolution dated 07.01.2021.

From Part-IV of the Application, it is seen that a total sum of Rs.2,17,50,049.75 /- (Rupees Two crores Seventeen Lakhs Fifty thousand and Forty Nine and Paise Seventy Five Only) is being claimed by the Operational Creditor as the Operational debt. The Principal amount claimed is Rs.1,45,66,066/- at a interest of 18% per annum amounting to Rs.71,83,983.75/-. In Part IV of the Application, the Operational Creditor has mentioned the date of default to be 11.09.2019.

Part – V of the Application discloses about the details of the documents filed by the Operational Creditor in order to prove the 'Operational debt', which are as follows;

It is submitted by the Ld. Counsel for the Applicant that the Corporate Debtor is a real estate development company with projects in Bengaluru, Chennai and Goa approached the Operational Creditor for inter alia Fire fighting at a residential zone "Metrozone" located at Anna Nagar, Chennai and on further negotiations, prices were agreed upon. Further, the Ld. Counsel stated that work commenced and the Operational Creditor had duly fulfilled all their contractual obligations.

Incidentally, the Ld. Counsel for Operational Creditor submitted that, the Corporate Debtor had made part payments in acknowledgements of its liabilities. Further, as the Corporate Debtor had failed to make their payments from 11.09.2018 for dues amounting to Rs. 1,45,66,066/- at the rate of 18% interest per annum, hence they were left with no other option than to approach this Tribunal.

The Ld. Counsel for the Operational Creditor submitted that the Statutory Demand Notice Under Form-III dated 15.01.2021 was sent by the Operational Creditor to the Corporate Debtor for the claim amounting to Rs. 1,45,66,066/- at the rate of 18% interest per annum for which no reply came from the Corporate Debtor. The Ld. Counsel for the Operational Creditor submitted that even prior to the issuance of the statutory demand notice Form III, dated 15.01.2021, the Operational Creditor had sent a letter dated 18.02.2019 to the Corporate Debtor requesting to settle the outstanding dues (Principal) amounting to Rs. 1,45,66,066. Subsequently, the Ld Counsel for the Operational Creditor submitted that in the E-mail communication dated 01.02.2019, the Corporate Debtor had acknowledged the total outstanding amount (Principal) payable to be Rs. 1,45,66,066 and the same is extracted hereunder:-

The Ld. Counsel for the Operational Creditor also submitted that IBA/863/2020 and CP/IB/201/CHE/2021 are also pending on the file of this Tribunal against the same Corporate Debtor Viz., Ozone Projects Private Limited. However, the Corporate Debtor are being represented by different Counsels in the aforesaid Company Petitions.

The Corporate Debtor had not filed any counter/ reply statement in this matter. However, made oral submissions on merits of the case.

Heard the submissions made by the Learned Counsel for both the parties and perused the records including the pleadings placed on record. This Tribunal after comprehensively hearing the said matter is of the view that, the debt and default had been proven based on the email communication dated 01.02.2019 in which the Corporate Debtor has acknowledged the outstanding dues (Principal) payable amounting to Rs. 1,45,66,066/-. The same was not denied during oral arguments by Respondent Counsel and it was candidly admitted that the outstanding is due and payable.

The above said email communication dated 01.02.2019 sent by the Corporate Debtor to the Operational Creditor are more than sufficient to prove the existence of the 'operational debt' and further accepted during oral submission and arguments.

It can be seen from the records of the proceedings placed before us that, settlement talks were prevalent between the Operational Creditor and the Corporate Debtor but the same did not fructify.

Further, this said debt amount claimed by the Operational Creditor amounting to Rs. 1,45,66,066/- along with interest amounting to 18% per annum, for a total amount of Rs.2,17,50,049.75 /- (Rupees Two crores Seventeen Lakhs Fifty thousand and Forty Nine and Paise Seventy Five Only) falls well within the purview of the pecuniary limit fixed by the central government vide notification S.O 1205(E) dated 24.3.2020 issued by the Ministry of Corporate Affairs, Government of India. Further, it is also pertinent to note that the default arising in the present Application is much prior to the advent of the Covid-19 pandemic and hence the Corporate Debtor also cannot seek shelter under Section 10A of IBC, 2016. Under the said circumstances, this Tribunal is left with no other option than to proceed with the present case and initiate the Corporate Insolvency Resolution Process in relation to the Corporate Debtor, which ordinarily shall get completed within 180 days, reckoning from the day this order is passed.

As a consequence of the Application being admitted in terms of Section 9 (5) of the Code, the moratorium as envisaged under the provisions of Section 14(1) and as extracted hereunder shall follow in relation to the Corporate Debtor:

However, during the pendency of the moratorium period in terms of Section 14(2) (2A) and 14(3) as extracted hereunder:

The duration of the period of moratorium shall be as provided in Section 14(4) of the Code and for ready reference reproduced as follows:

Since the Operational Creditor has not named the Insolvency Resolution Professional, this Tribunal based on the latest list furnished by Insolvency and Bankruptcy Board of India applicable for the period between Jan 2022 – June 2022 appoints Mr. N Veerapandian having registration number IBBI/IPA-001/IP-P-02148/2020-2021/13301 as the “Interim Resolution Professional” subject to the condition that no disciplinary proceedings are pending against such an Interim Resolution Professional named and disclosures as required under IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 are made within a period of one week from the date of this order.

The IRP is directed to take charge of the Corporate Debtor’s management immediately. The IRP is also directed to cause public announcement as prescribed under Section 15 of the IBC, 2016 within three days from the date the copy of this Order is received, and call for submissions of claim by the creditors in the manner as prescribed under Regulation 6 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

The IRP appointed shall take in this regard such other and further steps as are required under the Statute, more specifically in terms of Section 15, 17, 18 of the IBC, 2016 and file his report within 30 days before this Bench. The powers of the Board of Directors of the Corporate Debtor shall stand superseded as a consequence of the initiation of the CIRP in relation to the Corporate Debtor in terms of the provisions of IBC, 2016.

The IRP shall comply with the provisions of Sections 13 (2), 15, 17 & 18 of the Code. The Directors of the Corporate Debtor, its Promoters or any person associated with the management of the Corporate Debtor are/is directed to extend all assistance and cooperation to the IRP as stipulated under Section 19 of IBC, 2016 for the purpose of discharging his functions under Section 20 of IBC, 2016.

The IRP shall conduct the Corporate Insolvency Resolution Process in respect of the Corporate Debtor as stipulated under Chapter VIII of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

The Operational Creditor is directed to pay a sum of Rs.2,00,000/- (Rupees Two Lakh Only) to the Interim Resolution Professional upon the Interim Resolution Professional filing the necessary declaration form as required under the provisions of the Code to meet out the expenses to perform the functions assigned to her in accordance to Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

Based on the above terms, the Application stands admitted in terms of Section 9(5) of IBC, 2016 and the moratorium shall come in to effect as of this date. A copy of the Order shall be communicated to the Operational Creditor as well as to the Corporate Debtor above named by the Registry. In addition, a copy of the Order shall also be forwarded to IBBI for its records. Further, the Interim Resolution Professional above named who is figuring in the list of Resolution Professionals forwarded by IBBI be also furnished with copy of this Order forthwith by the Registry, who will also communicate the initiation of the CIRP in relation to the Corporate Debtor to the Registrar of Companies concerned.

The IRP is directed to file the 1^st Progress Report before this Tribunal on or before the 45^th day of initiation of CIRP by this Adjudicating Authority.

Post this CP/IB/131/CHE/2021 for hearing on 25.04.2022