Usha Enterprises vs K.G.N Deccan Engineering Industries Private Limited

a. That the Applicant had approached this Adjudicating Authority under section 9 of IBC, 2016, since the Corporate Debtor has defaulted in payment of an amount of Rs.1,40,32,565/- (Rupees One Crore Forty Lakhs thirty Two Thousand Five Hundred and Sixty Five) being the outstanding amount due from the Respondent in respect of supplies made by the Operational Creditor during the years 2018 and 2019 and interest thereon.

b. That the Respondent received and accepted the goods without any objection or demur. The Respondent had also availed input tax credit in respect of such supplies. After repeated reminders for payment of dues for supplies made by them and after issuance of demand notice (Form – 3) dated 14.01.2021 under Insolvency and Bankruptcy Code, 2021 the Respondent vide letter dated 21.01.2021 enclosed four post-dated cheques admitting liability and promised to honour the cheques. The Respondent Company in the past had issued post-dated cheques for the outstanding amounts overdue. However, the respondent had not honoured its promise. The Applicant on learning that respondent is attempting to dispose of the assets of the Respondent and divert the money, the applicant filed Interlocutory Application before this Adjudicating Authority. Later, the Respondent paid an amount of Rs. 1,05,21,945/- though RTGS on 21-02-2021

c. The Interlocutory Application was numbered as IA (IBC)140/2021. The Applicant agreed to reduce the rate of interest from 24% per annum to 18% annum and requested Corporate Debtor to pay the balance amount of Rs. 35,10,620 that they are entitled for interest amounting to Rs. 27,47,307/- as on that date. The respondent's counsel vide reply dated 17.03.2021 requested not to present the cheque No. 1887 dated 26.03.2021. The Applicant's counsel vide letter dated 25.03.2021 informed the Respondent to settle all pending payments along with interest. Later, the Respondents' Advocate issued letter dated 05.04.2021 stating that Respondent never promised to pay interest. The Applicant's counsel furnished reply to the notice dated 05.04.2021 and informed that Respondent did not object to payment of interest after receipt of Form – 3 notice and only after negotiations, the Applicant had agreed to reduce the rate of interest to 18% and therefore the Respondent is liable to pay principal amount along with interest.

d. That till date the respondent had not paid the balance amount of Rs.62,57,927/- (Rs. 35,10,620/- towards principal and Rs. 27,47,307/- towards interest). That vide order dated 01.04.2021 this Adjudicating Authority directed the Applicant to send notice to the Respondent/Corporate Debtor and submit proof of such service.

e. It is reliably learnt that the Respondent had already disposed of the land and realized sale proceeds notwithstanding pendency of interim application before this Adjudicating Authority and the buyer who had purchased the land had already raised a building. That there is no dispute on the liability of the Corporate Debtor to pay the amount as stated above. Hence the application under section 9 of IBC has to be admitted.

f. That on account of delay in payment of outstanding amounts in respect of supplies made in the year 2018 and 2019 caused mental agony and huge financial loss to the applicant Company. It is therefore prayed that this Adjudicating Authority may be pleased to admit the application and refer the Corporate Debtor to Corporate Insolvency Resolution Process and appoint Insolvency Resolution Professional and pass such order or other orders as may be deemed fit and proper in the facts and circumstances.

a. That the Corporate Debtor to the applicant notice dated 26.02.2021 has given reply notice dated 17.03.2021 stating that it is false and suppressing the real facts and the respondent is denying the claim amount of Rs. 62,57,927/- after payment of Rs. 1,05,21,945/- for which the applicant notice have mentioned that the interest amount in respect of the principal amount outstanding as on 31.12.2019 is Rs. 1,40,32,565/- for which applicant alleged notice mentioned that the claiming of the interest from 31.12.2019 upto 31.01.2021 @ 18% for which Rs. 27,47,307/- there is no any contra for claiming of interest and never agreed by the Respondent. Inspite of the lock-down due to pandemic 2019 since from March, 2020 onwards the applicant are not entitled any interest from the respondent as such the notice itself is illegal void and abnormal of the Applicant claim is illegal without any contract for interest.

b. That the Corporate Debtor has already paid an amount of Rs. 1,05,21,945/- through RTGS on 20.02.2021, even before the issuance of notice and the respondent is in utter surprise to see notice for claim of the amount, after the receipt of the RTGS and the applicant got issued a notice dated 26.02.2021 after due adjudication of the due amount. The respondent has already made the payments for clearance of the debts and issued the post-dated cheques to the applicant with correspondence letter dated 20.02.2021 and by reference of the Respondent's letter dated 30.01.2021, to make it clear for payments, even though the respondent have issued a post-dated cheques dated 05.03.2021 and 12.03.2021. The said cheques were returned after due payment through RTGs and the applicant had return the said cheques and the remaining cheques No. 001886 dated 19.03.2021 for Rs. 35,07,315/- is due as on 19.03.2021 for clearance. As such the applicant is knowing very well that the payments as per the schedule shall be cleared without any further extension, as such the respondent have prompt assured to the Applicant towards original due amount only. The applicant cannot be entitle for any interest for a period of Covid-19 pandemic situation as per the RBI guidelines time to time.

c. That in the wake if Covid-19, Pandemic period there was no functioning of the business, as such the applicant cannot be entitled to claim interest amount under any circumstances. The notice of the Applicant itself is illegal and the applicant have approached to the NCLT, Hyderabad as an Operational Credit on 12.02.2021. Whereas in contra of the Applicant's notice 26.02.2021 by suppressing the said facts and the applicant affidavit containing para 4 claiming an amount of Rs. 1,40,32,565/- along with interest @ 24% and all the material facts were suppressed by the applicant and in Para No. 7 in the verified affidavit as on 31.12.2019, the amount of Rs. 1,40,32,565/- towards the principal amount + interest of 24% per annum is due, which is further more than 8 years and due verification of applicant is total false.

d. That, without going into merits and demerits the respondent have issued a cheque No. 001887 dated 26.03.2021.

e. That the notices of the Operational Creditor, corresponding with dates 26.02.2021, 25.03.2021, 09.04.2021 and 12.04.2021 by suppressing all such correspondence, the respondent agreed that the payment of Rs. 35,07,315/- is only due without prejudice of legal rights for payment of 7 equal instalments commencing from 5th December 2021 onwards and further the Operational Creditor to approach this Adjudicating Authority with uncleaned hands and claim amount is false.

Reiterating above, counsel for the Corporate Debtor prayed to dismiss the petition with exemplary costs in the interest of justice.

a. 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 or law, tribunal arbitration panel or other authority;

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

c. 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 Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);

d. The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.

e. Suspension or termination of any license, permit, registration, quota, concession, clearances or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concessions, clearances or a similar grant or right during the moratorium period.