TaxTMI 
TaxTMI 
TaxTMI 
2017 (7) TMI 505
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.... The application was filed after the operational creditor sent a notice alongwith the invoices demanding the payment of the defaulted amount to the Corporate Debtor statedly in Form No.3, as prescribed in Rule 5(1) of the Rules by a registered post AD and through courier The demand notice dated 14.02.2017 for both the sales contracts is at Annexure-11. Two invoices are dated 21.12.2015 and the third invoice dated 31.12.2015, which are at Annexure-4. The other documents relied upon by applicant are three bills of exchange; one dated 05.01.2016; second dated 06.01.2016 and third Bill of Exchange dated 18.01.2016 at Annexure-6. The demand notice was sent through Mr. Kanwalvir Singh Kang, Advocate. 3. The Corporate Debtor sent reply dated 22.02.2017 Annexure A-12 to the demand notice statedly raising the dispute. 4. In terms of sub-rule 2 of Rule 6, the applicant was required to despatch forthwith a copy of the application filed with the Adjudicating Authority by registered post or speed post to the registered office of the company. Though the appearance on behalf of the respondent-corporate debtor was made by Mr.Anand Chibbar, Senior Advocate with Mr. Tarun Lehal, Advocate on 08.05.....
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....he goods with total price for a sum of USD 1,407,622.07 relating to contract No.HIPL (S)- UGML/2015/004, dated 02.12.2015. The payment terms as per the invoices is 150 days from the Bill of Lading Date and this term was also there in the sales contract. The others are the invoices dated 21.12.2015 and 31.12.2015 at pages 43 and 44 of the paper book respectively, mentioning therein the amount of the goods being supplied with the same terms of payment within 150 days from the date of Bill of Lading. 9. It is further stated that on 27.07.2015 receivables purchase agreement was executed between the original supplier and the applicant- operational creditor. By virtue of this Agreement, the applicant-operational creditor purchased the original supplier's rights, title and interest against the respondent-corporate debtor. To support this contention, the applicant has also relied upon the Bills of Exchange, which are negotiable instruments in respect of three supplies and these are Annexure 6 signed by the authorised signatory of the operational creditor and the respondent-corporate debtor. In first such document, the date of Bill of Lading (BIL) is dated 19.12.2015; the second dated ....
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....le to the power of attorney Annexure 2, Out of the three persons, in whose favour the power of attorney was executed, is Pankaj Sachdeva, the authorised representative of the operational creditor in the instant application. This power of attorney is dated 14.12.2016 issued under the signatures of the Executive Director and Secretary of the applicant Bank under its Common Seal. 14. The respondent-corporate debtor filed objections to this application by way of affidavit of Mr.Mukesh Jaisani, the authorised signatory of the respondent-corporate debtor. However, the documents like the sales contracts, invoices, bills of exchange, the statutory notice issued under sections 433 and 434 of the Companies Act, 1956, the demand notice under the Code and reply thereto are all admitted facts because even with the objections copies of these documents have been attached by the respondent. 15. According to the respondent, various complaints as regards the goods supplied were received, but not limited to the quality thereof by the end user. In view of the said complaints, various meetings were held with the officers of the supplier and subsequently raising the dispute. Reliance mainly is placed ....
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....r this agreement to a financial Institution." It is thus contended that in view of the above specific clause, the rights and obligations arising out of the sales contracts cannot be transferred by either of the parties without consent of the other 20. Another contention raised in the objection filed by the respondent is that the purported claim of the applicant was insured with the insurance company Euler Hermes and pursuant thereto the petitioner has received the entire amount claimed under this petition from the insurer. In view of the aforesaid fact, the petitioner would not have the locus-standi to file this petition. Therefore, it can be said that the petitioner has not come before the Adjudicating Authority with clean hands. 21. it is further stated that the copy of the application along with the paper book was received in the registered office of the respondent-corporate debtor, almost about 1 ½ month after the filing of the case in the Registry. The said registered envelop was received on 11.05.2017 and there being non- compliance to the mandatory requirement of clause 2 of sub-rule 1 of Rule 6 of the Rules, the instant petition should be rejected. The aforesaid o....
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....avits, petitions, objections, to file execution applications, to undertake proceedings, appeals, review, revisions, writ petitions and to furnish evidence and to make statements and to file all sorts of applications and to prosecute all legal proceedings, memorandums of appeal, petitions, and to do all other legal matters in all the Courts/Tribunals including the Board for Industrial and Financial Reconstruction (BIFR) and the Appellate Authority for Industrial and Financial Reconstruction (AAIFR), from the lowest to the highest, concerning any matter in respect of the said outstanding amount and the said petitions/appeals in respect of the Debtors; (c) to engage advocate(s) and technical counsels for the conduct of the proceedings for recovery against the debtor; (d) To settle, compromise, compound or withdraw the said petition, suits, appeals, reviews, revisions, petitions with respect to the Debtor, upon obtaining a written consent from the Company; and" 26. Learned senior counsel for the respondent vehemently contended that this power of attorney does not give any specific authority to the named attorney holders to file the petition under the Code. Learned senior counsel r....
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....petition for winding up, has been omitted as per the amendment to these sections incorporated in the 11th Schedule of the Code. So, the only remedy to a creditor against a company is to take steps for winding up of the company, for which the appropriate recourse is provided under sections 7 and 9 of the Code exclusively in respect of the financial and operational creditors respectively. So, the authority in favour of Pankaj Sachdeva, which is recent in time, authorising him to file the winding up petition etc. would fully cover the authority to file the insolvency resolution process under the Code. 29. In " DF Deutsche Forfait AG v. Uttam Galva Steel Ltd. [2017] 80 (NCLT-Mum.), it has similarly been observed that nature of insolvency proceedings under the IB Code cannot be seen as something different from the winding up proceedings and the petition thus was found to be instituted through a duly constituted attorney. In view of the above, the issue is held in favour of the petitioner and against the respondent ISSUE NO.2. Whether the petitioner is entitled to file this petition as an assignee of the original supplier? 30. Learned senior counsel for the petitioner relies upon ....
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....respondent and the above term pertains to the past transactions between them only which cannot have any effect or bearing on the receivables purchase agreement between the Bank and the original supplier. 34. The receivables purchase agreement dated 27.07.2015 not only pertains to the specific contract dated 08.05.2015 between the original supplier and the respondent, but also to any other contact between a 'Debtor' and the original supplier, which is approved by the Bank in writing. The term 'Debtor' has been defined in the document dated 27.07.2015 as three different customers including the respondent. 35. Import of this term in the receivable purchase agreement dated 27.07.2015 is very wide so that the parties thereto are not required to enter into fresh agreements for including any subsequent contracts. It is apparently for this reason that clause (b) was added as a general term in the document Annexure-5 to include other transactions also, which the Bank agrees to adopt. 36. To support the petitioner's contention, learned senior counsel also refers to the bills of exchange, copies of which have been filed by both the parties on record. All the bills of ex....
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....e on 24.05.2017, but the learned senior counsel for the respondent objected to the filing of the said document at that stage being the requirement to be furnished along with the application itself and thus cannot be considered a defect, which could be rectified by taking recourse to the provisio to sub- section 5 of Section 9 of the Code. 40. It is pertinent to mention that the Bank Certificate Annexure A-13 filed with CA No.66 of 2017 is dated 15.05.2017 issued by the petitioner, which is stated to be a Bank. It is stated in the certificate that the payment under all these three transactions has not been deposited and the amount owing to Macquarie by respondent to the tune of USD 6,321,337.11 along with interest is outstanding and no payments have been received from the respondent. It was contended by learned counsel for the petitioner that this certificate was received by email. The certificate has been filed on record with the affidavit of Mr.Kanwalvir Singh Kang, Advocate for the petitioner. I am of the considered view that no authenticity can be attached to this document in the absence of any provision of law or rules permitting such an unauthentic document to be relied upon.....
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....f the "Financial Institutions" will suffer to recover the debt as due from the "Corporate Debtor" of India. It was also contended that the appellant being a foreign based "Operational Creditor", the 'Adjudicating Authority' was required to interpret the provisions of the Code in such a manner that Section 9 would have taken in its fold all the Operational Creditors', who are entitled to recover the debt defaulted by the Corporate Debtors' of India. The Hon'ble Appellate Tribunal held that the above argument that foreign companies having no office in India or no account in India with any "Financial Institutions" will suffer in recovering the debt from the Corporate Debtor, cannot be accepted as apart from the Code, there are other provisions of recovery like suit, which car be preferred by any person. 44. However, the learned senior counsel for petitioner would refer to the instructions appended to Form No.5 of the Rules under which the application by the operational creditor is filed. The requirement as per Annexure III of the instructions is that the applicant has to attach copy of the relevant accounts from the banks financial institutions maintaining the acc....
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....the Court shall determine whether the person was a juvenile or not, the same having neither been raised nor decided. 48. To further support this contention, the learned senior counsel also relied upon State of UP v. Synthetics and Chemicals Ltd. [1991] 4 SCC 139. It was observed in that case that a decision passes sub silentio, when the particular point of law involved in the decision is not perceived by the Court or present to its mind. By referring to another decision in "Municipal Corpn. of Delhi v. Gurnam Kaur" [1989] 1 SCC 101, it was held that the precedents sub-silentio and without argument are of no moment. A decision, which is not expressed and is not founded on reasons nor it proceeds on consideration of issue, cannot be deemed to be a law declared to have a binding effect as is contemplated by Article 141 of the Constitution of India. 49. In the present case, however, there was a specific issue raised before the Hon'ble Appellate Tribunal with regard to the compliance of various clauses of sub-section (3) of Section 9 of the Code and the same was held to be mandatory. Therefore, the principle of law laid down on the mandatory nature of Section 9(3) cannot be said t....
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....d complaints from its customers and due to these quality problems, UGSL suffered heavy monetary losses apart from having significant negative impact on the company's brand name and market positioning. In addition, UGSL has not been able to process the material in time and supply the same to its customers, which is accentuating their further losses apart from unsold inventory piling up at their end, thereby constraining their working capital, which could have been utilised for their profitable operations. 53. The learned senior counsel for the respondent further submits that the aforesaid complaint was forwarded to Hamera International, the original supplier, vide letter dated 16.05.2016 Annexure R-10 Further in the reply to the legal notice dated 15.09.2016 sent by the petitioner under Sections 433 and 434 of the Companies Act, 1956, the respondent reiterated that the client of the respondent received various complaints from buyers and end users. It was further stated in the reply dated 05.10.2016, that this fact has already been communicated by the client of the respondent to the original supplier on various occasions telephonically and in the meeting held between them. This ....
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....is visit to Singapore. 56. Thereafter the petitioner Bank again sent email dated 10.06.2016 addressed to Mr.Handa and Mr.Dipak, who visited the Bank to discuss the issue. It is indicated in this email that the representatives of the respondent explained the current business environment in Steel Industry in India in general and Uttam in particular. Copy of this mail is also addressed to Mr. Miglani. So, till then, there was no depute about the defect in quality, it is not the version of the respondent that it sent any further response to the email of the petitioner dated 10.06.2016. It is the pertinent to mention that the allegation of the exchange of these emails has not been disputed or challenged in the objection petition of the respondent. 57. The learned senior counsel for the petitioner would further submit that in the reply dated 05.10.2016 Annexure -10 sent by the respondent, there was no indication that the quality related issue was earlier raised in writing. In the said letter, it was only said that the matter was discussed telephonically as well as in the meeting held between them. But now for the first time in reply to the demand notice, the respondent has alleged that....
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....there is a dispute raised by the corporate debtor. Further by merely giving a dispute a colour of genuine dispute or illusory, raised for the first time while replying to the notice under Section 8 cannot be a tool to reject an application under Section 9 of the Code, if the operational creditor otherwise satisfies the Adjudicating Authority that there is a debt and there is a default on the part of the corporate debtor. It was further held that the onus to prove that there is no default or debt or that there is a dispute pending consideration before a Court of law or Adjudicating Authority, shifts from the creditor to debtor and operational creditor to corporate debtor. 60. The learned senior counsel for respondent, however, contended that the dispute about the quality having already been raised, the instant petition may be rejected. The learned senior counsel for the respondent further submitted that the respondent has even filed a civil suit in the High Court of Bombay, impleading the original supplier as well as the petitioner as the defendants, raising the dispute about quality of the goods. Copy of the plaint in the said civil suit is Annexure R-15. The plaint in the said ci....