Visen Industries Limited vs Peekay Agencies Private Limited

Per: D. Arvind, Member (Technical):

The Court congregated through hybrid mode.

Heard Ld. Counsels for the parties.

This petition has been filed by Visen Industries Limited (hereinafter referred as “Applicant/Operational Creditor/OC”) for seeking admission of Peekay Agencies Private Limited (hereinafter referred as “Respondent/Corporate Debtor/CD”) into the Corporate Insolvency Resolution Process (CIRP) under Section 9 of Insolvency and Bankruptcy Code, 2016.

The applicant has claimed that they have supplied goods to the corporate debtor from 04.06.2023 to 13.08.2023 and raised 31 invoices totalling to Rs. 1,81,89,719/-. The details of supplies made, invoices wise has been mentioned in Sl. No. 4 of the application/petition in the form of a table.

It is the claim of the applicant that the corporate debtor has not paid a sum of Rs. 1,81,89,719/- and interest of Rs. 2,69,507/- totalling to Rs. 1,84,59,226/- till date. Subsequently, the OC has adjusted a sum of Rs. 55,05,657/- from the total outstanding payable by the CD for the value of goods purchased by OC from CD and therefore, the remaining sum of Rs. 1,29,53,569/- is still outstanding due and payable by the CD to OC as per OC and hence, this application under Section 9 of the IBC by the OC.

Ld. Counsel for applicant submits relying on table annexed in Page No. 41 of this application that a sum of Rs. 1,29,53,569/- is due as on 31.03.2024. For ready reference the said table is reproduced as under:

He brought to our notice, the notice issue under Section 8 of the IBC dated 18.10.2023 by OC to CD. He submits that despite receipt of demand notice, the CD disputed their liabilities by raising false contentions therein vide their letter dated 01.11.2023.

Ld. Counsel submits that the said letter has been replied by OC vide their letter dated 01.11.2023, denying the contentions raised by the CD. The CD vide its letter dated 02.03.2024 again raised false contentions to deny their rightful dues of the OC and hence, this application may be admitted and CIRP may be initiated against the corporate debtor.

Ld. Counsel for respondent submits that the corporate debtor belongs to Peekay group of companies which has got several group companies including i) Peekay Agencies Pvt. Ltd., ii) Bharat Mercantile Corporation, iii) Peekay Petrochem Pvt. Ltd. and iv) Multichemical Industries Pvt. Ltd.

The operational creditor has taken loan from one of the sister-concern of the corporate debtor Multichemical Industries Pvt. Ltd. mentioned above for a sum of Rs. 75,00,000/- with interest at the rate of 12% per annum on 09.02.2021. It is pertinent to mention that Multichemical Industries Pvt. Ltd. has been issuing invoices for interest to the operational creditor and the operational creditor also paid the same to Multichemical Industries Pvt. Ltd. after deduction of TDS. He relies on the copy of the ledger, bank statements, interest invoices, Form 26AS evidencing the payment of interest.

He also submits that Peekay Group of Companies being distributor of many companies have also supplied materials to the subsidiary of the operational creditor at Sharjah being Visen Polymers FZE, in the past four years continuously. A total sum of Rs. 48,06,696/- is due and payable to Peekay group for such supplies to the Sharjah entity of operational creditor, which is hundred percent subsidiary of OC. In fact, the CD has acknowledged that sums are due and payable to the OC in reference to the letter dated 25.08.2023, which captures the amount payable by corporate debtor to operational creditor, which is Rs. 1,81,89,719/- on account of goods supplied by OC to CD and also the amount payable by OC to CD on account of purchase of goods by OC from CD and the loan advanced by the sister-concern of CD to OC for a sum of Rs. 75,00,000/-.

The acknowledgement of net due receivable from CD by OC has been acknowledged in the letter dated 25.08.2023, by OC, for a sum of Rs. 51,84,062/-. For the sake convenience the said letter is reproduced as under:

Since the confirmation issued by OC for net receivable by him has not captured the interest payable on the loan advanced, the CD has written a letter dated 01.09.2023, capturing the interest portion as well to arrive at the net due to the OC by the CD. The said letter is reproduced for the sake of convenience:

Relying on this statement, the Ld. Counsel for CD submits that no amount is payable to the OC. It has been their practice for the past several years to adjust the dues of each other at group level instead of entity level and that is why letter dated 25.08.2023, the OC has clearly acknowledged the net debt after adjusting the amount payable to corporate debtor and its group entity. Therefore, this application has been filed with a mala fide intention to harass the CD and recover the sums due from the CD, when the OC himself has acknowledged the dues payable by him to the other entities of the CD.

In fact, the OC has agreed and admitted that net due receivable as Rs. 51,84,062/- in his letter dated 25.08.2023. This letter, however, did not include the amount payable by OC to the CD on account of supply of goods made by CD to the Sharjah entity of the OC group to the tune of USD 58920. If this is taken into consideration, there is no amount due as on date by the CD to OC and hence, this application deserves to be dismissed by exemplary costs.

The fact that the OC has supplied goods through 31 invoices amounting to Rs. 1,81,89,719/- has not been disputed. The fact that the OC has purchased goods worth of Rs. 55,05,657/- from the CD has also not been disputed. In fact the OC has made adjustment for that sum against the amount receivable by him against the 31 invoices and has calculated net amount due as Rs. 1,29,53,569/-. We do not see any agreement by the CD on interest except interest clause in the invoices. We have been consistently holding that mere mention in the invoice about the interest is not enough to recover interest from the CD. Therefore, we will focus only on the net principal amount due which is approximately Rs. 1.26 crore after excluding the interest.

We have seen that it has been the practice of both the groups (group entities of CD) and group entities of OC to adjust entity wise dues at group level. This is evident from the letter of 25.08.2023 by CD mentioned in Para 12 of this Order.

Therefore, we can conclude that it has been the practice and understanding of both the groups to settle their dues, not entity wise but at group level. If this is taken into consideration at group level, no due is payable by the CD to the OC. Even as per OC’s admission in its letter dated 25.08.2023, the receivable is only Rs. 51,84,062/-which does not include the invoice raised by CD as the sister entity of the OC at Sharjah for sum of USD 58720, for supply of goods.

If both the parties have chosen to settle their entities’ dues to each other, at group level, the OC cannot unilaterally choose to claim one entity’s due and make this application.

Thus, we find no merit in this petition and dismiss the same as not maintainable.

Certified copy of this order, if applied for with the Registry be supplied to the parties in compliance with all requisite formalities.