Tricolite Electrical Industries Limited vs HBN Homes Colonisers Private Limited

Dr. Deepti Mukesh, Hon'ble Member (J)

The Present Application is filed under section 9 of Insolvency and Bankruptcy Code, 2016 (for brevity 'IBC', 2016') read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity 'the Rules') by Tricolite Electrical Industries Limited (for brevity 'Applicant') with a prayer to initiate the Corporate Insolvency process against HBN Homes Colonisers Private Limited (for brevity 'Corporate Debtor').

The Applicant, Tricolite Electrical Industries Limited is having its registered office at 70A/13, Najafgarh Road, Industrial Area New Delhi-110015 and having CIN U74999DL1987PLC027351.

The Corporate Debtor is a limited company incorporated under the provisions of the Companies Act, 1956 on 09.06.2006 having CIN U74999DL1987PLC02731 as per Master Data and having registered office at 531, 5 Floor, HBN Office Mall, Plot-D, District Center, Paschim Vihar New Delhi-110087. The Authorised Share Capital of the Corporate Debtor is Rs. 25,00,000/- and Paid Up Share Capital is Rs. 21,00,000/- as per Master Data of the company.

The Applicant has stated that on 09.12.2011, the respondent issued a letter of intent wherein the applicant has to design, manufacture, supply, install, test and commission electrical panels for its proposed site known as "The millennium mall cum hotel" at Bhatinda for a total sum of Rs 3,45,00,000/. Subsequent to the letter of intent, an agreement dated 12.12.2011 was executed between the applicant and the respondent and in furtherance to that the applicant began production of goods as desired under the agreement.

It is submitted that the applicant had raised various invoices against the respondent to the tune of Rs 3,21,24,511/- and further transferred the amount to M/s Mitelite Electric Company Private Limited which is a sister concern of the applicant company on behalf of the respondent. The details of the invoices raised by the applicant are mentioned below:

It is submitted that the respondent has only paid Rs 2,62,96,033/- and the outstanding amount which is due and payable by the respondent is Rs 58,28,478/- along with interest of Rs 36,73,378/- @18% as on 30.09.2017, totaling to a sum of Rs. 95,01,856/- which is still pending. In part IV of the application, the operational creditor has given the details of the total amount of operational debt and the transactions on account of which the debt fell due:

It is submitted that the applicant had issued a legal notice under section 271 of the Companies Act, 2013 dated 20.05.2015 to the respondent to pay the aforesaid amount of Rs 58,28,478/- along with interest @18% failing which petition for winding up be filed against corporate debtor. The respondent had replied to the said legal notice dated 22.08.2015 thereby denying its liabilities to pay to the applicant the outstanding amount due on him.

The applicant issued a demand notice dated 25.10.2017 under the provisions of section 8 of I&B Code, 2016 (Under Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, calling upon the corporate debtor to pay the total outstanding amount of Rs. 95,01,856/-. The said notice was served through speed post as reflected in master data of MCA website and hence service of section 8 notice is complete.

Neither notice of dispute was raised by Corporate Debtor nor money was paid, hence the applicant filed present Application under section 9 of IBC, 2016 and served the copy of this application through speed post and email address which has been duly delivered to the corporate debtor as per the tracking report.

The Respondent has filed its reply and has raised various objections to the application. The objection of the respondent is that firstly 4 invoices were admittedly never delivered to the respondent during the subsistence of the agreement, while remaining 12 invoices were duly received. Secondly, the claimed amount of Rs 34,60,240/- was transferred to the account of another company namely Mitilte Electric Company which is a different entity, on behalf of the respondent and thus the applicant is entitled to recover the same from the respondent. Thirdly, it is contended that the notice under section 8 of I & B Code dated 25.10.2017 and the notice dated 29.05.2015, sent on behalf of the applicant contain different figures in respect of the amount alleged to have been transferred to the other company i.e M/s Mitilite Electric Company is different. Fourthly, the applicant cannot be allowed to raise a claim on behalf of third company, which itself has not raised any claim.

A rejoinder to the reply/written statement has been filed by the operational creditor reiterating the submissions made in the application and controverting the assertions in the reply/written statement. The applicant has submitted that the invoices has been dealt with by the applicant in its affidavit dated 06.03.2018 where the applicant has annexed the invoices evidencing receipt by the respondent company which is at Annexure 4. The applicant has submitted that the amount of Rs. 34,60,240/- had been transferred to the account of its sister concern namely Mitilite Electric Company. It is further submitted that when the subject agreement was entered into between both the applicant and the respondent company w.r.t the supply of certain electric panels and others, it was mutually agreed between both the parties that the imported materials particularly the bus duct will be supplied from the Mitilite Electric Company since that was a trading material and the applicant company itself does not trade in it. It is also submitted that the respondent has made prior payments to the applicant for the work done by the Mitilite Company with respect to the project. It is further submitted by the applicant that the amount paid to the Mitilite Electric Company Private Limited by the applicant is the same and not different.

Under sub-section 5 (i) of section 9 of the code, the application filed by the applicant operational creditor has to be admitted on satisfaction that:

- (a) the application made is complete; - (b) there is no repayment of the unpaid operational debt; - (c) the invoice or notice for payment to the corporate debtor has been delivered by the operational creditor; - (d) no notice of dispute has been received by the operational creditor or there is no record of dispute in the information utility; and - (e) there is no disciplinary proceeding pending against any resolution professional proposed under sub-section (4), if any

The provisions of section 9 (2) and section 9 (5) of IBC which read as under:

A conjoint reading of the aforesaid provision would show that form and manner of the application has to be the one as prescribed. It is evident form the record that the application has been filed on the proforma prescribed under insolvency and bankruptcy (application to adjudicating authority) A/... rules, 2016. We are satisfied that a default has occurred and the application under sub section 2 of section 9 is complete. The statutory notice under section 8 of the Code was served on the Corporate Debtor as discussed above and no reply was received within the time period as given in Section 8(2) of the Code.

The contentions of the corporate debtor that the 4 invoices were admittedly never delivered to the respondent during the subsistence of the agreement, while remaining 12 invoices were duly received, is not found to be correct in view of the rejoinder filed by the applicant as discussed above. The applicant is correct in stating that the invoices has been dealt in its affidavit dated 06.03.2018 where the applicant has annexed the invoices evidencing receipt by the respondent. Further the claimed amount of Rs 34,60,240/- was transferred by the applicant to the account Mitilte Electric Company, a sister concern of the applicant on behalf of the respondent and thus the applicant is entitled to recover the same from the respondent which is covered under the amount claimed to be in default. The corporate debtor has failed to show that they have not agreed to said payment being made to its sister concern Mitilite company.

R.

Hence this Hon'ble Tribunal is of the view that the contentions of the respondent are not plausible and requires further investigation. Further the dispute raised by the corporate debtor is a patently feeble legal argument and an assertion of fact unsupported by evidence. Therefore, this Hon'ble tribunal is of the opinion that there is no merit in the dispute to be as pre-existing one.

Learned counsel for the applicant has argued that all requirements of section 9 of the code for initiation of corporate insolvency resolution process by the operational creditor stand fulfilled. In that regard, he has submitted that the application is complete as per the requirements of section 9 of the Code. He has further submitted that the details of default along with its dates have been clearly stated in part IV along with all minute details. Considering that the amount transferred to Mitelite on behalf of corporate debtor is not payable by corporate debtor to applicant and cannot be considered as debt to corporate debtor still the amount claimed by applicant is more than threshold required under the Code for filing application under Section 9.

The Applicant has filed an affidavit under section 9(3)(b) affirming that no notice of dispute has been given by the Corporate debtor relating to dispute of the unpaid operational debt.

The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application.

We have discussed the facts of the case above and noted that the amount claimed to be in default is Rs. 95,01,856/- and the default occurred from 22.08.2015 and application is filed on 24.01.2018 hence the debt is not time barred and the application is filed within the period of limitation.

The present application is complete after hearing learned counsel for both the parties and perusing the documents on records it goes beyond doubt that the Applicant is entitled to claim its dues, which remain uncontroverted by the Corporate Debtor, establishing the default in payment of the operational debt beyond doubt. In the light of above facts and records the present application is admitted.

Since the Applicant has not named the Insolvency Resolution Professional, this Tribunal appoints Mr. Rakesh Kumar Jain, with registration number IBBI/IPA-001/IP-P01297/2018-19/12068 (email [email protected], Mobile No. 9811455641 as the Interim Resolution Professional subject to the condition that no disciplinary proceedings are pending against such an IRP named who may act as an IRP in relation to the CIRP of the Respondent and specific consent is filed in Form 2 of Insolvency and Bankruptcy Board of India (Application to Adjudicating Authority) Rule, 2016 in relation to specifically the corporate debtor and the applicant herein and make disclosures as required under IBBI (insolvency Resolution Process for Corporate Persons) Regulations, 2016 within a period of one week from the date of this order.

We direct the Operational Creditor to deposit a sum of Rs. 2 lacs with the Interim Resolution Professional namely Mr. Rakesh Kumar Jain to meet out the expense 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. The needful shall be done within three days for the date of receipt of this order by the Operational Creditor. The amount however be subject to adjustment by the Committee of Creditors as accounted for by Interim Resolution Professional and shall be paid back to the Operational Creditor.

As a consequence of the application being admitted in terms of Section 9(5) of IBC, 2016, 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). Thus, the following prohibitions are imposed:

It is further directed that:

- (a) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period; - (b) The provision of sub-section 14 of the Code shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator and the surety in a contract of guarantee to a Corporate Debtor.

The Interim Resolution Professional shall perform all his functions contemplated, inter alia, by Sections 15,17,18,19,20 & 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.

In terms of above order, the Application stands admitted in terms of Section 9(5) of IBC, 2016. A copy of the order shall be communicated to the Applicant 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 IRP above named be also furnished with copy of this order forthwith by the Registry.