Wipro Ltd. vs Rahul Commerce Pvt. Ltd.

Per Jinan K.R., Member (Judicial)

Wipro Limited/Operational Creditor has filed this application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP) as against M/s. Rahul Commerce Private Limited, hereinafter referred to as the Corporate Debtor/Respondent, alleging that the Corporate Debtor has defaulted payment of an amount of Rs.60,87,511.56 (Rupees Sixty Lakh Eighty Seven Thousand Five Hundred Eleven and Paise Fifty Six Only) as the principal amount. Despite demand the Corporate Debtor has not paid the debt and hence filed this application for initiating CIRP.

The Operational Creditor further would contends that the Corporate Debtor had engaged the Operational Creditor for providing Annual Maintenance Charges (AMC) services for certain equipments for a period of 3 years from October 24, 2014 to October 23, 2017 at MSTC limited in Kolkata on terms and conditions mutually agreed between the parties. However, the Corporate Debtor had failed and neglected to make the payment of Rs.40,37,933.56 (Rupees Forty Lakh Thirty Seven Thousand Nine Hundred Thirty Three and Paise Fifty Six Only) inclusive of interest to the tune of Rs.20,49,578/- (Rupees Twenty Lakh Forty Nine Thousand Five Hundred Seventy Eight Only) which is calculated @ 18% per annum up to June 30, 2019. Therefore, liable to pay a total amount of Rs.60,87,511.56.

In terms of the AMC the Operational Creditor from time to time provided the services to the Corporate Debtor at prices agreed between the parties and a copy of the Purchase Order dated November 27, 2014 is annexed with the application as Annexure-V. As per the terms of the Purchase Order the Corporate Debtor was required to make annual payments in advance to the Operational Creditor for the relevant AMC services. The Operational Creditor accordingly raised three invoices, copies of which are produced along with the application marked as Annexure VI.

The Corporate Debtor made complete payment to the Operational Creditor of Rs.34,59,774.38 (Rupees Thirty Four Lakh Fifty Nine Thousand Seven Hundred Seventy Four and Paise Thirty Eight Only) against invoice dated December 03, 2014 and part payment of a total sum of Rs.30,00,000/- (Rupees Thirty Lakh Only) against invoice dated October 24, 2015 and the balance demand as per the invoice dated October 24, 2015 and invoice dated November 04, 2016 is due from the Corporate Debtor, The Operational Creditor and the Corporate Debtor treated the accounts maintained under the instant transaction as open, mutual, running and continuous.

Despite non payment, the Operational Creditor continued the services as agreed as per the Purchase Order dated November 24, 2014. In view of default in payment the Operational Creditor issued a demand notice on (22^{\text{nd}}) January, 2018 demanding the balance outstanding amount due and payable by the Corporate Debtor and thereafter issued a statutory demand notice under Section 8 on October 16, 2018 and copy of the same is annexed as Annexure VIII.

Despite receipt of the notice and admitting the outstanding amount due to the Operational Creditor a reply notice sent by the Corporate Debtor on (6^{\text{th}}) November, 2018. A copy of the reply sent to the Operational Creditor by the Corporate Debtor is annexed with the application marked as Annexure-IX. In the above said circumstances the Operational Creditor has no other alternative other than to file this application for initiating CIRP as against the Corporate Debtor, accordingly filed this application.

Several opportunities were given to the Corporate Debtor for enabling it to file reply affidavit. However, neglected to file reply affidavit and not raised any objection at the time of hearing.

Heard both sides. Perused the documents.

In an application of this nature where the Corporate Debtor did not turn up and objected this application, the questions that arises for consideration is whether the Operational Creditor has complied all the requirements to be meted out under Section 9(5)(i) ode, that whether the debt as claimed is liable to be paid by the Corporate Debtor and that whether the debt as demanded was paid within 10 days of the receipt of the demand notice evidently received by the Corporate Debtor.

On a careful screening I am satisfied that the application is complete as per Section 9(5)(i)(e) of the Code. Demand notice has been delivered to the Corporate Debtor and the Corporate Debtor sent a reply without raising any dispute and there was no payment despite demand.

The Operational Creditor also filed affidavit in compliance with Section 9(3)(b) to the effect that there is no notice given by the Corporate Debtor relating to a dispute of the unpaid operational debt. Since the Corporate Debtor has admitted the default, non production of statement of bank account or certificate as provided under Section 9(3)(c) from the Financial Institutions confirming that there is no payment of an unpaid operational debt is not fatal.

The debt as claimed is also not barred by limitation. The debt claimed by the Operational Creditor is not disputed but admitted in the reply notice. No notice of dispute also seen issued by the Corporate

Debtor as per section 9(5) (i) (d) of the Code. No Insolvency professional name is proposed by the Operational Creditor. In view of the matter the application by the Operational Creditor is liable to be admitted. Accordingly admitted upon the following orders:-

The Petition filed by the Operational Creditor under Section 9 of the Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process against the Corporate Debtor, M/s. Rahul Commerce Private Limited is hereby admitted.

ii) I hereby declare a moratorium and public announcement in accordance with Sections 13 and 15 of the I & B Code, 2016.

iii) Moratorium is declared for the purposes referred to in Section 14 of the Insolvency & Bankruptcy Code, 2016. The I.R.P. shall cause a public announcement of the initiation of Corporate Insolvency Resolution Process and call for the submission of claims under Section 15. The public announcement referred to in clause (b) of sub-section (1) of Section 15 of Insolvency & Bankruptcy Code, 2016 shall be made immediately.

iv) Moratorium under Section 14 of the Insolvency & Bankruptcy Code, 2016 prohibits the following:

The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgement, decree or order in any court of law, tribunal, arbitration panel or other authority;

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

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 Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);

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

The services rendered to the corporate debtor as may be specified shall not be terminated, suspended, or interrupted during the moratorium period.

vi) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.

vii) The order of moratorium shall have effect from the date of admission till the completion of the corporate insolvency resolution process.

viii) Provided that where at any time during the Corporate Insolvency Resolution Process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of Section 31 or passes an order for liquidation of the corporate debtor under Section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be.

ix) Necessary public announcement as per Section 15 of the IBC, 2016 may be made.

Mr. Nihar Ranjan Nayak, of 7, Chittaranjan Avenue, 3rd Floor, Laha Paint House, Kolkata 700072, having IBBI Registration No.IBBI/IPA-001/IP-P00460/2017-18/10803, Email: [email protected], Mobile No: 9830020012, is appointed as Interim Resolution Professional for ascertaining the particulars of creditors and convening a Committee of Creditors for evolving a resolution plan, subject to production of written consent within one week from the date of receipt of this order.

xi) The Interim Resolution Professional/Resolution Professional to conduct CIRP of the Corporate Debtor as per time line prescribed under Regulation 40A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

xii) The Interim Resolution Professional should convene a meeting of the Committee of Creditors and submit the resolution passed by the Committee of Creditors and shall identify the prospective Resolution Applicant within 105 days from the insolvency commencement date.

xiii) The Operational Creditor/Petitioner is directed to deposit Rs. 3,00,000/- (Rupees Three lack only) within one week from the date of this order, in the ESCROW Account in SBI maintained by the Registrar NCLT, Kolkata Bench for the purpose of meeting the preliminary expenses for initiating the CIRP by the Interim Resolution Professional before the constitution of the CoC and the fees and cost can be withdrawn by the IRP/RP after the approval of CoC. Balance, if any, can be withdrawn by the Operational Creditor.

xiv) Registry is hereby directed under Section 9(5) of the I & B Code, 2016 to communicate the order to the Operational Creditor, the Corporate Debtor and to the IRP by Speed Post as well as through email.

List the matter on 24.04.2020 for the filing of the progress report.

Certified copy of the order may be issued to all the concerned parties, if applied for, upon compliance with all requisite formalities.