M/s. Siddharth Polymers vs Jagdish Tyres Private Limited

Chandra Bhan Singh, Member (Technical)

This  Company  Petition  is  filed  by  M/s.  Siddharth  Polymers, (hereinafter called "Operational Creditor") seeking to set in motion the Corporate Insolvency Resolution Process (CIRP) against Jagdish Tyres Private Limited. (hereinafter called "Corporate Debtor") alleging that the Corporate Debtor committed default in making payment to the Operational Creditor in view of the invoices raised by them upon the Corporate Debtor, by invoking the provisions of Section 9 of Insolvency and Bankruptcy Code (hereinafter called the "Code") read with Rule 6 of Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016.

Brief facts of the case are that the Operational Creditor has provided certain goods i.e. Tyre Retreading Materials (including Pre-cured Tread Rubber, Tread Rubber and Bonding Gum product to the corporate debtor from time to time under an agreement from 23.01.2016 to 19.08.2016 for which he has raised the invoices for an outstanding amount of Rs. 23,14,058/-(Principal Amount) and Rs. 5,55,373/- towards Interest payable @ 12% on account of nonpayment in time. Thus, the applicant claims a total sum of Rs. 28,69,431/- in the above company petition.

The submissions of the Operational Creditor are as follow :

i. The Corporate Debtor company was incorporated on 24.02.2015. A Corporate Debtor is primarily engaged in the business of Tyre Re-trading. The Corporate Debtor during primary nature of transaction placed various orders to the Appliant for the supply of tyre re-trading materials (including pre-cured tread rubber, tread rubber and bonding gum.)

ii. The Operational Creditor is primarily in the business of supply of tyre re-trading material (including pre-cured tread rubber, tread rubber and bonding gum). The Operational Creditor has supplied the goods to Corporate Debtor on the basis of ordersraised by the Corporate Debtor during the period from 23.01.2016 to 19.08.2021)

iii. During the period from 23.01.2016 to 19.08.2016, the Corporate Debtor has raised 30 orders for the supply of procured tread rubber, tread rubber and bonding gum and other tyre re-trading materials. The said orders are totally amounting to Rs. 23,058,89/- (including pre-cured tread rubber, tread rubber and bonding gum). The Operational Creditor raised respective Invoices corresponding to the Orders placed by the Corporate Debtor. The supply was based on the Orders raised by Corporate Debtor and the Invoices raised by the Operational Creditor. The said tyre re-treading materials were supplied through a transport system including tempos, trucks and lorries. AT the time of handling over the delivery of the said materials, the said transport services provider would issue a Lorry/ Transport Receipts of the said material to the Corporate Debtor. This particular receipt would indicate the quantity of the material supplied which directly correspond to the orders raised by the Corporate Debtor and Invoices issued by the Operational Creditor. The Operational Creditor is in possession of all the Lorry/Transport Receipts issued by the transport provider corresponding to the respective Orders placed by the Corporate Debtor during the period starting from 23.01.2016 to 19.08.2016. The said Invoices and Lorry/Transport Receipts are annexed to this application for the purpose of reference.

iv. During January to October 2016, there were series of communications between partner of Operational Creditor, Mr. Sunil Kumar Temburni and the Director of Corporate Debtor, Mr. Jagdish Sasane through internet communication application named WhatsApp and SMS messages through Cellular Service. In additional there were series of Communications through Email. In the said communications, at several instances, Mr. Jagdish Sasane has clearly admitted the debt of Corporate Debtor towards the Operational Creditor and has made promises to repay the same at the earliest. The relevant communications are annexed to this application for ready reference.

v. Since 16.10.2016 there was no actual repayment form Corporate Debtor and the debt amount kept piling up, the Partner of Operational Creditor, Mr. Sunil Kumar Temburni vide his email dated 16.10.2016, listed out the details of invoices and the respective amount due in a tabular format and communicated the same to the Corporate Debtor. Mr. Temburni had requested to clear the said payment of Rs. 23,14,058,89/- at the earliest. Mr. Jagdish Sasane on the same date replied to the email by stating that he is forwarding the said details to his Finance Department immediately without any delay. Further, on the same day, by another email, Mr. Jagdish Sasane had assured that he will try his level best to clear the pending payment. Apart form this particular email correspondence, there are various other emails from Mr. Sunil Kumar Temburni to Mr. Jagdish Sasane requesting release of payment. The same are annexed to the application for ready reference.

vi. In addition, there is a recorded telephonic conversation where Mr. Temburni has requested payment towards operational debt. However, Mr. Jagdish Sasane despite clearly admitting liability has blatantly refused to clear the said payment and further stated that Mr. Temburni is free to do anything at his wishes. Further Mr. Sasane has even stated he would instruct his staff to not receive any further calls of Mr. Temburni and use abusive language if need be. An extract of the said telecommunication has been transcribed by the Applicant and annexed to the application for ready reference. The Applicant also undertakes to supply original voice recording to this Hon'ble Tribunal as and when required.

The submissions of the Corporate Debtor are as follows:

i. The company had replied to the notice issued in Form 3 by Siddharth Polymers. The said reply was sent by Post on 1 October 2018. However, the said reply was returned back by the Postal Department citing the reason "LEFT AD". The said packet containing reply with the remark "LEFT AD" is with the Authorized Representative of the Company and is unopened. Hence, it is denied that the company had not replied to the notice issued by the Siddharth Polymers. The Company had replied to the notice within time.

ii. At the outset the Company denied all the contentions and allegations of the Applicant. The averments made in the same petition are untrue. The company denies that

Siddharth Polymers is its Creditor much less the Operational Creditor.

iii. The petitioner in Colomn No. 1 of the Form 5 on page 6 clearly mentions the fact that the Firm Siddharth Polymers (Purported Operational Creditor) is SHUT DOWN. Therefore, the Company submits that the current petition is filed by Mr. Sunil Temburni is without authority and therefore deserve dismissal on this ground alone.

iv. The company denies that it owes any money to Siddharth Polymers or to Mr. Sunil Temburni. In fact, it has paid the entire amount due and payable to Siddharth Polymers way back in the year 2017. The details whereof are mentioned here below.

Date

of

Mode  of

NEFT Ref.

Amount

payment

payment

Rs.

06.04.2016

Online

NEFT/UTIBH16097006386

256983

26.04.2016

Online

NEFT/AXIC161178914660

150000

28.04.2016

Online

NEFT/AXIC161199334440

100000

11.05.2016

Online

NEFT/AXIC161322346310

200000

17.05.2016

Online

NEFT/AXIC161383217516

200000

21.05.2016

Online

NEFT/AXIC161423959990

100000

23.05.2016

Online

NEFT/AXIC161444080017

100000

02.06.2016

Online

NEFT/AXIC160546203875

200000

04.06.2016

Online

NEFT/AXIC161566754434

100000

08.06.2016

Online

NEFT/AXIC161607484142

100000

02.07.2016

Online

IMPS/P2A/618418920519/60004844002

150000

MAHB0001124

07.07.2016

Online

NEFT/AXIC161892898601

150000

10.08.2016

Online

IMPS/P2A/622308088638/68000973586

20000

MAHB0001124

01.09.2016

Online

NEFTBOM/UIBHI16245023157

150000

14.11.2016

Cash

BY CASH

360000

21.12.2016

Online

NEFT/N356160221484200

67100

06.01.2017

Online

---------------------------

100000

Total

2504083

v. As mentioned above, the company had already paid Siddharth Polymers an amount of Rs. 25,04,083/-. Thereafter, no payment of whatsoever nature had accrued and therefore nothing remains payable. In fact, The Company states that the above amounts included the sales tax which the company paid to Siddharth Polymers with a trust that Siddharth Polymers will perform its obligations to pay the sales tax to the appropriate authority. However, Siddharth Polymers is defaulter of amount of Rs. 4,08,966/-, which it should have been paid to the sale tax department. Therefore, this amount the Company was required to pay to the sales tax department.

vi. Without prejudice to the above objections and disputes, the company states that the notice issued by the petitioner mentions the date of 16 September 2018, however the company received the said notice on 22 September 2018. As per Sec. 8 (2) of the Insolvency and Bankruptcy Code, 2016 the limitation shall start from the date of receipt. The company replied to the said notice and posted the same on 1 October 2018. The packet containing the reply was returned back by the postal department citing the reason "LEFT AD".

vii. The petition is signed by one Mr. Sunil Temburni as the managing partner of the Siddharth Polymers. However, no authority or document evidencing authority is attached to the petition. Hence, the company humbly submits that the notice in form 3 is sent and form 5 filed is without authority, therefore is illegal, null and void.

viii The petitioner claims that Siddharth Polymers is operational creditor of the company. It is denied that Siddharth Polymers is a creditor much less operational creditor of the Company. As it is detailed in abovementioned table at Para 5 that all the amounts due and payable has been paid in full.

ix. Siddharth Polymers claims interest @12% p.a. without prejudice to the contentions raised I this reply the company denies any liability to Siddharth Polymers including interest for following reasons.

a. The said claim of interest is made without any agreement, arrangement or any contract. Moreover, none of the invoices attached to the said notice nor any document contains any agreement for interest.

b. Entire amount due and payable is already paid as detailed in abovementioned table at Para 5, Hence as there is no outstanding payable by the company hence the petitioner cannot claim any interest.

x. The Notice issued by the Petitioner and the petition clearly mentioned that due to mounting operational date due to nonpayment from the corporate, from the corporate, the operational creditor had to shut down his partnership firm i.e. Siddharth Polymers. This makes it clear that as on the date of notice and also as on the date of filing the petition, the partnership firm Siddharth Polymers who claims to be operational creditor of the company, is shut down and therefore not in existence. Hence, the company submits that Mr. Sunil Temburni had issued the said notice and filed the current petition without authority and with malafide intentions.

xi. The petitioner had failed to mention the dates of default in the petition and in the notice. The claims made in the notice and the petition are denied and therefore disputed. Moreover, the notice in form 3 issued by the petitioner is defective, illegal and therefore null and void.

xii. In the light of what is stated herein above that the application moved by the petitioner may please be rejected.

FINDINGS

The above Company Petition has been filed by M/s Siddharth Polymers, Operational Creditor against Jagdish Tyres Private Limited, Corporate Debtor/respondent against total claim of Rs. 28,69,431/- out of which Principal amount is of Rs. 23,13,058 and Rs. 55,53,730/- it's by way of interest calculated @ 12% per annum. The Bench notes that the claim amount is towards Tyre reiterating materials which has been supplied by the Operational Creditor to the Corporate Debtor between the period 23.01.2016 to 19.08.2016.

The invoices raised during 23.01.2016 to 19.08.2016 is also supported by Tempo/lobby receipt of delivery. It is not dispute between the parties that materials have not been supplied. The Bench notes that the only contention of the Corporate Debtor is that he has paid a total amount of Rs. 25,04,083/-during the period commencing from 06.04.2016 to 06.01.2017.

The Bench notes the interest claimed @ 12 % is not admissible as there is no agreement between the parties regarding payment of any interest in the event of default in payment. Similarly, even the invoices did not mention any payment of interest in the event of delay of payment. Therefore, the total claim for non-payment subsequently comes to Rs. 23,14,058/-.

It is clear to this Bench and as admitted by the petitioner that the total amount of Rs. 20,20,44,083/- has been paid by the Corporate Debtor to the Operational Creditor between the period commencing from 06.04.2016 to 06.01.2017. This fact can be corroborated from the statement of account for that period produced by the Corporate Debtor as maintained with Axis Bank. Besides this, the Bench notes and as pleaded by the respondent that the Corporate Debtor has paid of Rs. 3,66,000/- in cash also. Be that it may, it is very clear that the petitioner has not come out with clean hand before the bench and by all account almost all the debt has been repaid by the corporate debtor to the petitioner.

In view of the above, this Bench dismisses the Company Petition bearing no. 4315 of 2018.