M/S NUVOCO Vistas Corporation Ltd. vs M/S SOHO Infrastructure Pvt. Ltd.

The present application is filed under section 9 of Insolvency and Bankruptcy Code, 2016 (for brevity 'Code, 2016') read with Rule 6 of the

Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 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 Soho Infrastructure 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 Kuria Complex, LBS

Marg, Kuria (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 on 15.11.2006 under the provisions of the Companies Act, 1956, having CIN

U45200DL2006PTC155515 as per Master Data.

The company is having its registered office at B-22, Ground Floor, Village- Gazipur, New Delhi-110024.

In the instant case the Applicant was supplying ready mix concrete to corporate debtor at their various project sites. The said supplies were made

on the basis of purchase orders issued by corporate debtor for which various invoices are raised and issued to the corporate debtor.

It is stated that there was understanding between Lafarge India Limited and Soho Infrastructure Private Limited whereby Lafarge India Limited

was asked and and placed various purchase orders in January 2016 and June 2016 to supply RMC at various project sites of the corporate debtor inter

alia at Patna (Bihar) amongst other in terms of purchase orders given by corporate debtor.

The Applicant claims that the payment became due from the date of the invoices dated from 04.12.2015 to 30.10.2016 at Annexure VI. Further,

Applicant has stated that in discharge of the liability, Corporate Debtor had issued cheque no. 444569 dated 31.03.2017 for the amount of Rs.

11,70,000/- which was when presented for encashment in the bank by applicant was returned unpaid due to insufficiency of funds. Corporate Debtor

has stated that the issue of said cheque was given as security against the goods supplied by Applicant.

The Applicant has submitted that the total amount of debt due and payable by the corporate debtor to Applicant is Rs. 11,91,308.55/- along with

the interest at the rate of 24.

The corporate debtor has in its reply stated that Applicant has no locus standi to file this application as the specifically denied the fact that Nuvoco

Vistas Corporation Limited ever operational creditor to the Corporate Debtor. However, Applicant submitted the Certificate of Incorporation, showing

that Nuvoco Vistas Corporation Limited was formerly named as Lafarge India Limited, dated 10.03.2017 pursuant to Rule 29 of the Companies

(Incorporation) Rules, 2014. Hence, the Lafarge India Private Limited, Lafarge India Limited and Nuvoco Vistas Corporation Limited is one and the

same entity.

The corporate debtor has further stated that the aforementioned cheque bearing no. 444569 for the amount of Rs. 11,70,000/- was issued in the

favor of Lafarge India Limited against the supply of Ready Mix Cement as surety and was not to be presented at the Bank as per the instructions

given and requested the staff of Lafarge India limited dated 18.06.2016. Further, corporate debtor has stated that the requisite payment has been

directly paid to the Lafarge India Limited as reflected from the statement of accounts maintained by corporate debtor in ordinary course of business

but the same could be substantially proved, on the contrary in the reply in the reply of Corporate Debtor itself there is an admission of the debt as

stated therein ""We hereby to say that we made a cheque containing no. 444569 of PNB for amount of Rs. 11,70,000 in favour of Lafarge India limited

against the supply of RMC, further we have to say that the above said cheque should not have to present at bank, instead of this cheque we will make

the payment of the same through RTGS within 30 days this letter was received by one of the staffs of Lafarge India limited bearing his signature

signed on 18.06.2016

The Applicant has submitted the legal notice under section 138 of Negotiable Instrument Act, 1882 for the dishonor of cheque bearing no. 444569.

The corporate debtor has denied existence of any liability towards the Applicant in reply to said legal notice.

In relation to the plea of Corporate Debtor in relation to 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 we are 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.

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 may be treated as an

admission of the existence of debt due and payable to the applicant by the Corporate Debtor.

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, 1881 are independent 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 in order to avoid the debt, which is claimed by the 'Operational Creditor' as due from the 'Corporate Debtor' and in making payment of

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

the 'Corporate Debtor' that there is a preexisting 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 V. 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. 11,91,308.55/- as claimed by the

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

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

that Rs. 11,91,308.55/- from Corporate Debtor has not been received from corporate debtor between 23.06.2016 to12.02.2018

The Applicant has filed an affidavit dated 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. Further it has been

confirmed that no dispute is raised by the corporate debtor in relation to the unpaid operational debt in notice under section 8 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 04.02.2015 and therefore

present application is not barred by the law of limitation.

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

IDanupma@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.