Nbu Packaging & Printing Works Private Limited vs Mihijam Vanaspati Limited

Harish Chander Suri, J

This petition i.e. CP (IB) No. 851/KB/2018 under Section 9 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, has been filed by NBU Packaging & Printing Works Private Limited, hereinafter referred to as the "Operational Creditor" against Mihijam Vanaspati Limited, a Corporate entity having its Office in Kolkata, hereinafter referred to as the "Corporate Debtor".

It is submitted that the Operational Creditor has authorised Mr. Kailash Prasad Agarwal, its Director vide Board Resolution dated 2nd January, 2018. The Applicant further submits that the total amount outstanding and payable by the Corporate Debtor to the Operational Creditor is Rs. 8,22,406/- (Rupees Eight Lacs Twenty Two Thousand Four Hundred and Six Only) which is inclusive of Rs. 4,36,792/- (Rupees Four Lacs Thirty Six Thousand Seven Hundred Ninety Two Only) as the outstanding debt and Rs. 3,85,614/- (Rupees Three Lacs Eighty Five Thousand Six Hundred and Fourteen Only) as interest till 30th April, 2018.

It is further submitted that the debt has become due on 29th June, 2017, i.e. the date on which the Corporate Debtor made last payment through pay order. It is submitted that the Operational Creditor had been supplying corrugated paper boxes against invoices/tax paid bills aggregating to Rs. 6,07,306/- against which a total sum of Rs. 1,75,000/- only had been paid from time to time with the last payment on 29th June, 2019.

It is further submitted that as per the Industry practice, the Corporate Debtor is liable to pay interest for delays in settlement of bills which comes to Rs. 3,85,614/- which amount is due and payable by the Corporate Debtor. The Operational Creditor had issued notice as required under Section 8 of the Insolvency & Bankruptcy Code for filing an application under Section 9 of the Code on 25th May, 2018 which was duly received by the Corporate Debtor. The Operational Creditor has annexed with the petition copies of all the relevant invoices relied upon for proving its case. The Operational Creditor also enclosed a copy of the confirmation of account dated 1st March, 2014 received by the Corporate Debtor which was duly acknowledged. It is submitted that the Corporate Debtor has received all the goods as per the invoices and acknowledged the same.

The Operational Creditor has also filed an affidavit under Section 9(3)(b) of the IBC to the effect that no notice has been received from the Corporate Debtor relating to a dispute of the unpaid Operational Debt before or after issuing notice of demand under Section 8 of the Code and that there is no dispute with regard to the debt of the Corporate Debtor.

The Corporate Debtor has filed its reply and submitted that the statutory notice dated 7th August, 2017 issued by the Operational Creditor was issued without any authority and as such the instant proceedings are not maintainable. It is submitted that the Resolution authorizing the Director Mr. Kailash Prasad Agarwal was passed by the Board of Directors only on 2nd January, 2018 whereas the statutory notice has been re-issued on 7th August, 2017. The Corporate Debtor has tried to convince the Bench that the statutory notice had been issued by the Authorized Representative without any authority in that regard. The Corporate Debtor has also sought to create a dispute that the goods supplied were of inferior quality and not as per the orders placed and in spite of all the requests having been made to the Operational Creditor they were not replaced, sub-standard goods were supplied and that is why the payments were withheld.

It is further submitted that the Corporate Debtor has a stock of rejected goods lying at its Godown which is valued at Rs. 4,15,000/-. However, to avoid prolonging litigation, the Corporate Debtor had paid a sum of Rs. 4,32,719/- on 23rd January, 2019 towards principal amount.

It is further submitted that the operational creditor has never raised the invoices and sent the same to the corporate debtor for payment. The operational creditor for the first time has annexed the invoices with the present proceedings without presenting the same for payments to the Corporate Debtor and that, had the said invoices been presented to the Corporate Debtor for payment, the same would have been settled within the time. The Operational Creditor, according to the Corporate Debtor, is not entitled to interest as claimed by them on the ground that there is no agreement for interest between the parties and that since the invoice were never presented for payments to the Operational Creditor, the payments could not be made.

It is submitted by the Corporate Debtor that in spite of the payment of the principal amount to the Operational Creditor during the pendency of the present proceedings, the Operational Creditor is claiming interest, litigation costs and other charges to which the Operational Creditor is not entitled to under the law.

It is further disputed by the Corporate Debtor that the letter dated 28th March, 2014 and the confirmation of accounts dated 1st April, 2014 annexed to the application were prepared on the basis of the goods supplied by the Operational Creditor although the invoices were never issued.

We have gone through the records placed before us by both the parties and have heard the Ld. Counsels for the parties at length. The Applicant has not been able to convince the Bench with regard to the payment of interest because the applicant has placed on record the invoices in duplicate, one issued by the Computer which is described as tax invoice and the other written in hand repeating the same information. The One written in hand also depicts "duplicate for Seller" written at the top on the right hand side. Similarly all the invoices placed on record have been filed in duplicate. One issued by the Computer and the other issued by hand. The invoices issued in hand specifically write "interest @ 18% p.a. will be charged if payment is not made within due time whereas the invoices issued by computer do not mention any such term of interest payment.

The Operational Creditor has not been able to prove any agreement oral or in writing to prove the payment of interest. We are not convinced by any argument of the operational creditor good enough to be believed or sufficient to initiate CIRP in respect of the Corporate debtor.

The Company Petition CP (IB) No. 851/KB/2018 is therefore dismissed. However, no order as to cost.

Registry is hereby directed under section 9(5)(ii) of the I & B Code, 2016 to communicate the order to the Operational Creditor and the Corporate Debtor by Speed Post as well as through E-mail.

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