Trends Remedies Pvt. Ltd. vs Lexus India Ltd.

Abni Ranjan Kumar Sinha, J

The present application has been filed on behalf of the Applicant/Operational Creditor ("hereinafter referred as OC") under Section 9 of the IBC for the initiation of proceeding against the Corporate Debtor ("hereinafter referred as CD") for a default of Rs. 4,85,757/-. The facts of the case are that the Operational Creditor is in the business of Pharmaceuticals Ram Material Bulk Drugs Chemicals & General Excipients. That the Operational Creditor is in the above-mentioned business since 2004. From the Financial Year 2016 to 2017, the Operational Creditor was continuously supplying raw material to the Corporate Debtor, that there was a running account between the Operational Creditor and the Corporate Debtor and the

We have heard the Ld. Counsel for the petitioner and perused the averments made in the application as well as records of the case and we find that after issuing notice, none appeared on behalf of the respondent and the proceedings was fixed for ex-parte hearing against the CD. Accordingly, the records placed before us for ex-parte hearing.

Ld. Counsel for the OC submitted that the OC has enclosed the invoices which the OC has raised in lieu of the supply of goods and the first invoice is dated 18.11.2016 which is at page No. 33 of the application and the last invoice is of 10.04.2017 which is at page No. 43 of the application. He further submitted that in pursuance of the invoices, he received the payments and the last payment was received on 24.02.2017 which is evident from bank statement at page No. 100 as well as ledger account, which is at page No. 45-50 of the paper book. He further submitted that since there is an unpaid debt of 4,85,757/- which appears in his ledger account and for the recovery of that amount he has sent Demand Notice, and same was duly delivered on the registered office as well as factory of the CD and the tracking report of the speed post is at page No. 69 of the paper book, which shows that the Demand Notice was duly served upon the CD. He further submitted that he has not received any reply of the Demand Notice and in this regard, he has filed affidavit under Section 9(3) (b) of IBC, which is at page No. 31 of the application. He further submitted that even after the issuance of the Notice, none appeared on behalf of the CD. He further submitted that although he has not proposed the name of the IRP but he undertakes to propose the name of the IRP.

In the light of the submissions raised by the parties, we have gone through the application as well as documents and we find that despite the service of notice when no one appeared on behalf of CD, the proceedings was fixed for ex-parte hearing against the CD vide order dated 17.01.2020. We further, find that in para 4 of the application, the OC has raised an amount of Rs. 4,85,757/-. We further find that the OC has raised the invoices, which are enclosed from page No. 33-50 of the application. We further find that the OC has enclosed the ledger account which is at page No. 45-50 as well as bank statement account, which are from page No. 91 to page No. 100, these documents shows that the last payment was received by the OC on 24.02.2017, whereas the present application is filed on 08.11.2019 and therefore, we are of the considered view that the present application is within time. We further find that the ledger account of the OC shows that an amount of Rs. 4,85,757/- is still outstanding against the CD and we further find that after the delivery of the Demand Notice, no reply was received from the CD. Therefore, at this juncture, we would like to refer Sections 8 & 9 of IBC and the same are quoted below:

"Section - 8.

(1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in the default to the corporate debtor in such form and manner as may be prescribed.

(2) The corporate debtor shall, within a period of ten days of the receipt of the demand notice or copy of the invoice mentioned in sub-section (1) bring to the notice of the operational creditor--

(a) existence of a dispute, 1[if any, or] record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute;

(b) the 2 [payment] of unpaid operational debt--

(i) by sending an attested copy of the record of electronic transfer of the unpaid amount from the bank, account of the corporate debtor; or

(ii) by sending an attested copy of record that the operational creditor has encashed a cheque issued by the corporate debtor.

Explanation.--For the purposes of this section, a "demand notice" means a notice served by an operational creditor to the corporate debtor demanding 3[payment] of the operational debt in respect of which the default has occurred.

Section-9

(1) After the expiry of the period often days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub-section (2) of section 8, the operational creditor may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process.

(2) The application under sub-section (1) shall be filed in such form and manner and accompanied with such fee as may be prescribed.

(3) The operational creditor shall, along with the application furnish--

(a) a copy of the invoice demanding payment or demand notice delivered by the operational creditor to the corporate debtor;

(b) an affidavit to the effect that there is no notice given by the corporate debtor relating to a dispute of the unpaid operational debt;

(c) a copy of the certificate from the financial institutions maintaining accounts of the operational creditor confirming that there is no payment of an unpaid operational debt l[by the corporate debtor, if available;]

[(d) a copy of any record with information utility confirming that there is no payment of an unpaid operational debt by the corporate debtor, if available; and

(e) any other proof confirming that there is no payment of any unpaid operational debt by the corporate debtor or such other information, as may be prescribed.]

(4) An operational creditor initiating a corporate insolvency resolution process under this section, may propose a resolution professional to act as an interim resolution professional.

(5) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order--

(i) admit the application and communicate such decision to the operational creditor and the corporate debtor if,--

(a) the application made under sub-section (2) is complete;

(b) there is no 3[payment] of the unpaid operational debt;

(c) the invoice or notice for payment to the corporate debtor has been delivered by the operational creditor;

(d) no notice of dispute has been received by the operational creditor or there is no record of dispute in the information utility; and

(e) there is no disciplinary proceeding pending against any resolution professional proposed under sub-section (4), if any.

(ii) reject the application and communicate such decision to the operational creditor and the corporate debtor, if--

(a) the application made under sub-section (2) is incomplete;

(b) there has been 4[payment] of the unpaid operational debt;

(c) the creditor has not delivered the invoice or notice for payment to the corporate debtor;

(d) notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility; or

(e) any disciplinary proceeding is pending against any proposed resolution professional:

Provided that Adjudicating Authority, shall before rejecting an application under sub-clause (a) of clause (ii) give a notice to the applicant to rectify the defect in his application within seven days of the date of receipt of such notice from the adjudicating Authority.

(6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of this section".

From the perusal of the averments made on behalf of the parties we find no dispute was raised after the receipt of the demand notice, therefore, after the expiry of ten day, the OC has right to file application under Section 9 of IBC.

We further find that neither payment has been made nor any dispute has been raised by the CD and the defaulted amount is more than Rs. 1,00,000/- is being the minimum threshold limit fixed under IBC, 2016, therefore in view of Section 9(5)(1) of IBC, we inclined to admit this application and the applicant has not proposed the name of the IRP therefore, we appoint Mr. Mr. Sougat Sinha, Registration Number-IBBI/IPA-002/IP-N00395/2017-2018/11170, e-mail id- sougat.sinha@artha-legal.com as IRP and initiate CIRP against the respondent. Accordingly, this petition is admitted. A moratorium in terms of Section 14 of the IBC, 2016 shall come into effect forthwith staying:-

effect forthwith staying: -

(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 debt or 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 Securitisation 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.

Further:

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

(4) The order of moratorium shall have effect from the date of such 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.

Since, name of IPR is not proposed, hence we appoint, Mr. Mr. Sougat Sinha, Registration Number- IBBI/IPA-002/IP-N00395/2017-2018/11170, e-mail id- sougat.sinha@artha-legal.com.

Operational Creditor is directed to deposit the fee of Rs. 2,00,000/- to meet the immediate expenses of the IRP within two weeks. The same shall be fully accountable by the IRP and shall be reimbursed by the CoC, to the Operational Creditor to be recovered as CIR costs and IRP is directed to follow the rules and regulations as per Section 15, 16, 17 & 18 of IBC.

Registry is directed to communicate the order with the IRP as well both the parties.