M/s NUVOCO Vistas Corporation Ltd. vs M/s MIHIR Builcom Pvt. Ltd.

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 M/s Nuvoco Vistas Corporation Limited

(formerly known as Lafarge India Limited) (for brevity 'Applicant') with a prayer for initiation of Corporate Insolvency process against M/s Mihir

Buildcom Private Limited (for brevity 'Corporate Debtor).

The Applicant was originally incorporated as Lafarge India Private Limited under the provision Company Act, 1956. Subsequently, the name of the

Applicant has been changed from Lafarge India Private Limited to a public company, namely, Lafarge India Limited by the Certificate of

Incorporation dated 12.03.2016 and thereafter the name was further changed to Nuvoco Vistas Corporation Limited by the Certificate of

Incorporation dated 10.03.2017 pursuant to Rule 29 of the Companies (Incorporation) Rules, 2014, having CIN U26940MH1999PLC118229 as per

Master Data. Hence, the Lafarge India Private Limited, Lafarge India Limited and Nuvoco Vistas Corporation Limited is one and the same entity.

The Applicant is company having registered office at Equinox Business, Park Tower-3, East Wing, 4th Floor, off Bandra Kurla Complex, LBS

Marg, Kurla (West) Mumbai400070

The applicant has duly authorized Mr. Arun Shukla, Director of the company, to file the present application by the resolution passed in the meeting

of Board of Directors dated 08.08.2017 of the company which inter alia provides "" to sign, make, declare affirm, verify any application, forms,

documents, agreements for registration of any site, plant, office, go down, establishment under the applicable laws and/ or to comply with and/or cause

to be complied with and/or cause to be complied with all statutory requirements affecting the company and to represent the Company and to represent

the Company before any Governments, Courts of Law, Civil, Criminal, National Company Law Tribunal (NCLT), National Company Law Appellate

Tribunal (NCLAT), industrial or labour, revenue or before all conciliators, other public officers, authorities, bodies or tribunals in connection with all

suits, actions, claims, petitions, winding up petitions, application/plaints under Insolvency and Bankruptcy Code (including filing of claims before

Insolvency Professionals), appeals and other legal or other proceedings and matters whether civil, criminal, revenue, industrial or labor in which the

company may be concerned or interested whether as plaintiffs, defendants, petitioners, appellants, respondents, opponents or in any other capacity

whatsoever or otherwise howsoever and in all matters in otherwise concerning the business affairs and properties of the company in all actions, suits,

appeals, petitions and other proceedings under all acts or enactments of the parliament of India or of any state legislature and other local bodies"" and

further provides that ""Mr. Arun Shukla shall have the authority to appoint from time-to-time or generally such persons or persons as he may think fit

as his substitute or substitutes to do, execute and perform all or any such matters and things as aforesaid and at pleasure to remove any such

substitute or substitutes and to appoint any other or others in his or their place"" among other. As per the authority given Mr. Arun Shukla has further

delegated the authority to Mr. Deepak Kumar, System Admin of the company, to file the present application by the Letter of Authority dated

22.08.2017 at Annexure 1.

The Applicant is engaged in business of manufacturer and/or sale of cements, ready mix concrete and aggregates.

The corporate debtor is private company incorporated under the provisions of the Companies Act, 1956 on 08.01.2008 having CIN

U45400DL2008PTC172397 as per Master Data.

The company is having its registered office at A-233, Shivalik, New Delhi-110017.

It is stated that there was understanding between Nuvoco Vistas Corporation Limited and Mihir Buildcom Private Limited whereby applicant was

asked to supply Ready Mix Concrete (RMC) at various project site of corporate debtor. The said supplies were made from February 2016 to March

2016 on the basis of purchase orders issued by corporate debtor against which various invoices are raised by the Applicant. Further it is stated that the

payment became due after 30 days from the date of invoices raised by the applicant and the debt is due from respective due date of each invoice.

The applicant has stated they have delivered the ready-mix concrete (RMX) to various project sites inter alia at Mihir Buildcom, Greater Noida,

amongst others. During the said continuous business transaction, the applicant is liable to pay an outstanding amount of Rs. 27,65,647/- along with the

interest at the rate of 24%.

The applicant has stated that in discharge of the liability Corporate Debtor had issued the following five cheques of HDFC Bank, Anand Lok, New

Delhi Branch:

a. Cheque no. 000515 dated 31.08.2016 for Rs. 5,00,000/-

b. Cheque no. 000516 dated 18.09.2016 for Rs. 4,00,000/-

c. Cheque no. 000517 dated 30.09.2016 for Rs. 5,00,000/-

d. Cheque no. 000519 dated 26.08.2016 for Rs. 4,00,000/-

e. Cheque no. 000518 dated 15.10.2016 for Rs. 9,67,126/-

However, when these cheques were presented in bank for encashment, the same were returned unpaid by the bank with the remark ""funds

insufficient"". The applicant has initiated the proceeding under section 138 of Negotiable Instrument, 1881 for dishonor of abovementioned cheques

before the Court of Magistrate.

The Applicant has submitted that the total amount of debt due and payable by the corporate debtor to applicant is Rs. 27,65,647/- along with the

interest at the rate of 24%.

The Applicant claims that the payment became due from 30 days from the date of the invoices dated from 29.02.2016 to 21.11.2016. Further,

Applicant has stated that in discharge of said liability Corporate Debtor had issued cheque bearing no. 000515, 000516, 000517, 000519 and 000518 for

the amount of Rs. 27,65,647/-which was returned by the bank due to insufficiency of funds. However, corporate debtor has stated that the issue of

said cheques practices by the applicant on corporate debtor either to make fresh payment as per the invoices raised or issue fresh cheques qua

invoices because of which corporate debtor issued the aforementioned cheques. Further, corporate debtor has insisted that in any event the cheque

were issued as in security against the goods supplied by Applicant aforementioned cheques were not to be presented unless the accounts is

reconciled.

The corporate debtor has further stated that the aforementioned cheque bearing no. 000515, 000516, 000517, 000519 and 000518 for the amount

of Rs. 27,65,647/- only is made in the favor of Applicant against the supply of Ready Mix Cement was not to be presented at the Bank as the

corporate debtor had informed the Applicant during March-April, 2016 that the advance cheques amounting to Rs. 27,95,000/- was required to be

returned back in as much as due to certain accounting discrepancies as reflected qua invoices and the same was required to be re-calculated and

raised afresh. Further, the Corporate Debtor has submitted that the applicant overlooked the request of Corporate Debtor and submitted the said

cheques for encashment.

The Corporate Debtor has stated that he is willing to settle the accounts with the applicant subject to reconciliation of discrepancies qua three

invoices bearing no. RI/IN/4234/2016/000550, RI/IN/4234/2016/000551 and RI/IN/4234/2016/000552 all dated 29.02.2016 raised by applicant for sum

of Rs. 2,55,000/- was found to be excess in three invoices and which the Corporate Debtor had informed to the applicant during the issuance of the

aforementioned invoices. During the arguments the learned Counsel for applicant further argued that the said invoices are fabricated as the original

invoice received by applicant bears signature of the recipient on behalf of Corporate Debtor for the first time as shown and relied upon are without

any recipient signatures and it is clearly seen that said invoices relied by Corporate Debtor are nothing but created fake document which should not be

taken into consideration.

Considering, the pleadings of both parties. The defense of the 'Corporate Debtor' to stave off the Insolvency Resolution Process as sought to be

unleashed by the Applicant, primarily rests on the ground of a pre-existing dispute prior to the filing of the application and in the circumstances the

application should be dismissed as not maintainable. In view of the above contention, it is necessary to ascertain the definition of 'dispute'. In relation to

Code, 2016, dispute has been defined in Section 5(6) as follows:

dispute"" includes a suit or arbitration proceedings relating toâ€"(a) the existence of the amount of debt; (b) the quality of goods or service; or (c) the

breach of a representation or warranty.

As per the reply filed by the Corporate Debtor, it is concluded that the dispute raised by the corporate debtor does not fall within the definition of

dispute as reproduced above, and the plea of dispute is nothing but moonshine defense created by Corporate Debtor against the applicant without any

merit. In the said reply neither the supply of goods nor amount owed to the applicant is denied substantially.

Further, the Corporate Debtor has not denied the debt due and payable to the applicant in reply filed by them and the same can be treated as an

admission of the existence of debt due and payable to the applicant by the Corporate Debtor which is of more than Rs. 1 Lakh.

In relation to the plea of criminal proceedings pending against the Corporate Debtor as initiated by the Applicant for dishonor of cheques under

section 138 Negotiable Instrument Act, 1881 is an independent remedy of the present application is for the corporate insolvency of the Corporate

Debtor under section 8 and 9 of the Code, 2016. There is strict onus is placed on the 'Corporate Debtor' while raising the plea of dispute and that it

must be genuine and bona fide and not sham in order to avoid the debt, which is claimed by the 'Operational Creditor' as due from the 'Corporate

Debtor'. However, in the instant case there is no merit in the contention of the 'Corporate Debtor' and hence unable to accede to the claim of the

'Corporate Debtor' that there is a pre-existing dispute as between the 'Operational Creditor' and the 'Corporate Debtor' as contemplated under the

provisions of Code, 2016.

The Applicant has issued a Demand Notice under section 8 of the Code, 2016 dated 06.09.2017 in Form 3 to Corporate Debtor which was duly

received at Annexure IV. Further it has been stated that no reply is filed by the corporate debtor in relation to the unpaid operational debt in notice

under section 8 of the Code, 2016.

Further, the corporate debtor has neither paid the money nor raised any dispute towards the liability of Rs. 27,95,000/- as claimed by the Applicant

in notice under section 8 of Code, 2016 at Annexure-IV.

The Bank maintaining account of the appellant, Yes Bank Limited, has confirmed vide its certificate under 9(3)(c) of the Code dated 27.02.2018

that Rs. 27,65,647/- from Corporate Debtor has not been received from corporate debtor between 04.04.2016 to12.02.2018

The Applicant has filed an affidavit dated 09.03.2018 affirming that in respect of the amount claimed or any part thereof, the Applicant has not

received nor had any person, on its behalf had received in any manner the amount due to them under section 9(3)(b) of the Code, 2016.

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

The amount of default exceeds Rs. 1,00,000/- as per the requirement under section 4 of the Code, 2016. Hence, this application is within the

purview of section 9 of the Code, 2016.

The default in payment of operational debt first became due from the date of the invoices raised by the Applicant that is 30.10.2016 and the debt is

not time barred.

In the given facts and circumstances, the present application is complete and the Applicant is entitled to claim its dues, establishing the default in

payment of the operational debt beyond doubt, and fulfillment of requirements under section 9(5) of the Code. Hence, the present application is

admitted.

Applicant has not named the Insolvency Resolution Professional, this Tribunal based on the list furnished by Insolvency and Bankruptcy Board of

India appoints Mrs. Anupama Agarwal, having registration number IBBI/IPA-001/IP-P00338/2017-18/ 10606 and E-Mail ID

anupma@indialiaison.com, 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 Corporate Debtor 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.

As a consequence of the application being admitted in terms of Section 9(5) of IBC, 2016 moratorium as envisaged under the provisions of Section

14(1) and as extracted hereunder shall follow in relation to the Corporate Debtor prohibiting all of the following:

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 of 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 right 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;

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.

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

(2) 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.

(3) The provisions of sub-section (1) shall not apply to-

a. such transaction as may be notified by the Central Government in consultation with any financial sector regulator.

b. a surety in contract of guarantee to a Corporate Debtor.

The order of moratorium shall have effect from the date of this order till the completion of the corporate insolvency resolution process, 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 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.

Based on the above terms and conditions, 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.