TaxTMI 
TaxTMI 
TaxTMI 
2017 (10) TMI 516
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....ications have been filed under Section 9 of IBC, 2016, by persons who claim to be its Operational Creditors on the basis that each of them have supplied goods for value and the payment of consideration in relation to the same are in default. 2. All the four applications, even though as stated earlier, relate to the initiation of CIRP of the Corporate Debtor, the maintainability and merits of the applications as filed by the Operational Creditors are taken first in order to ascertain as to whether the applications are sustainable in light of the provisions of IBC, 2016, in preference to that filed by the Corporate Debtor itself. 3. It is to be noted that IBC, 2016 even though contains a waterfall in respect of liquidation process, however in relation to initiation of CIRP by more than one category of applicant (i.e) Financial Creditor, Operational Creditor or Corporate Debtor and as to which one of the application is required to be taken first or preference given, has not been specified, for its disposal. However, NCLT being named as an Adjudicating Authority under IBC, 2016 and being a Court of Equity and this Tribunal in the absence of a petition filed by any Financial Creditor ....
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....39;. However, despite service of notice, it is claimed that no payment was made by the Corporate Debtor nor any notice of dispute was served within the mandatory period of 10 days as contained in the provisions of IBC, 2016. In view of the same, the operational creditor claims the above petition in CA No. (IB)-160 (PB)/2017 has been filed before this Tribunal seeking for the initiation of CIRP against the Corporate Debtor. CA No. (IB)-180(ND)/2017: 6(a) This application is filed by another Operational Creditor against the Corporate Debtor and the Operational debt claimed as stated in the prescribed Form-5 as given in AAA Rules, 2016 is in a sum of Rs. 26,56,747/-. It is stated that based on Purchase Order, EETL No./PO/1017/1041 dated 23.12.2013 for the supply of technological structure fabrication and more specifically mentioned thereof, for a consideration of Rs. 1,94,00,000/- and subsequently, amended by revised Purchase Orders dated 03.2.2013, 24.5.2014 and 16.6.2014, wherein the value of goods to be supplied was ultimately reduced to Rs. 80,83,000/- from Rs. 1,94,00,000/-. (b) In view of placing of the purchase order and subsequent amendments and in terms of the same, the ....
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....ing under the invoices raised, the Operational Creditor claims that prior to filing of the application, a demand notice under section 8 in Form-3 as prescribed under the AAA Rule 2016 dated 15.5.2017 was sent and the said notice had also been delivered on 19.5.2017 to the Corporate Debtor and that a reply was received by the Operational Creditor on 15.6.2017 issued from and on the part of the Corporate Debtor. (d) In view of the non-payment of the amount in default, nor any pending dispute cited by the Corporate Debtor constituting a 'dispute', the Operational Creditor it is stated has been constrained to file the above application seeking for the CIRP as against the Corporate Debtor. C.P. (IB)-130(PB)/2017: 8(a) In relation to the above petition, it is seen that even prior to the date of filing of the 3 petitions earlier dealt with, this petition has been filed on 26.5.2017 by the Corporate Debtor itself seeking for the initiation of CIRP. The application as detailed above, has been filed as already stated by virtue of Section 10 of IBC, 2016 read with AAA Rules, 2016. The application has been preferred under Form-6 of AAA Rules, 2016. Part-I of the prescribed format g....
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....of CIRP after notice was ordered to be sent to the Financial Creditors as listed by the Corporate Debtor in its application as a lead banker and on behalf of the consortium of lenders, predominantly on the ground of fraud alleged to have been perpetrated by the promoters of the Corporate Debtor to the detriment of the corporate debtor and the financial creditors as well, being the lenders who have advanced huge sums to the Corporate Debtor. 9. Delving further on the aspect of virtually simultaneous applications being preferred by the creditors as well as the Corporate Debtor which has been touched upon in the paragraphs 3 & 4 supra, it becomes incumbent on the part of the Tribunal to justify its preference to the applications filed by the Operational Creditors first rather than the application preferred by the Corporate Debtor, even though, both, if admitted, will lead to the same result that of an appointment of IRP to take over the management and affairs of the Corporate Debtor in order to resolve the insolvency or in the case of its failure to its inevitable liquidation. But it is also required to be considered by this Tribunal as to which of the IRP will be perceived to sub-se....
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....oaching this Tribunal under Section 10 of IBC, 2016 in naming a Insolvency Professional (IRP) in the application itself as otherwise the application is considered to be not complete. Further by virtue of Section 16 of IBC, 2016, if an IRP has been named, then this Tribunal is required to name the said person proposed by the Financial Creditor or the Corporate Debtor as the case may be as IRP under the provisions of IBC, 2016. However, in relation to an Operational Creditor, while approaching this Tribunal under Sections 8 & 9 of IBC, 2016, there is no such compulsion and, thus, it is left to the discretion of the Operational Creditor to either name or not to name an IRP in the application. In the absence of any IRP being named, Section 16 of IBC, 2016 enjoins this Tribunal to make a reference to Insolvency & Bankruptcy Board of India (IBBI) for the recommendation of an IRP and IBBI is required to recommend the name of an IRP to this Tribunal against whom, no disciplinary proceedings are pending. The above situation arises only if the petition is admitted by this Tribunal and the act of naming the IRP recommended by the Operational Creditor is left to the Adjudicating Authority. Fur....
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....nder the provisions of Section 9(3)(c) of IBC, 2016. For easy reference, the said section 9 of IBC is reproduced in full: "Sec. 9. (1) After the expiry of the period of ten 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 unp....
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....porate Debtor as defined under the provisions of Section 3(8) of IBC, 2016 has been received. The compliance of the statutory mandate has also been reiterated by Hon'ble NCLAT in a number of its decisions including the one passed in Smart Timing Steel Ltd. v. National Steel & Agro Industries Ltd. in Company Appeal (AT) (Insovency) No. 28 of 2017 dated 19.05.2017. Coming to the instant cases on hand, in relation to the production of Certificate from the Bankers, the following position emerge: 14. CP (IB)-181 (ND)/2017 : (a) Based on the submissions of the applicant/Operational Creditor in the above application that the banker, namely, HDFC Bank Limited, in which the Operational Creditor is maintaining the account has refused to give it a Certificate in compliance with the provisions of Section 9(3)(c) of IBC, 2016, the Hon'ble Principal Bench has ordered vide Order dated 2nd August, 2017 as under : "Learned Counsel for the petitioner states that in pursuance of the provisions of Section 9(3) (c) of the IBC, 2016, a request for issuance of Certificate has been made to the Financial Institution namely, HDFC Bank ltd, Stephen House, 4, BBD Bag (East), Kolkatta-700 001 on ....
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....itor has not complied with the provisions of Section 9(3)(c) of the IBC, 2016. The above attitude of HDFC Bank in issuing a certificate of its own choice rather than complying with the statutory as well as judicial mandate is strongly deprecated and calls for an explanation on its part to this Tribunal which will be dealt with in the concluding portion of this order. 15. CP(IB)-180 (ND)/2017 (a) Now coming to application in CP(IB)-180 (ND)/2017, it is specifically admitted in the affidavit dated 12th July, 2017 filed by the Deponent therein, being a Director of the Operational Creditor that the Operational Creditor has not been able to obtain a Certificate from the Financial institution/Banker, maintaining the Bank account of the Operational Creditor confirming that there is no payment of unpaid Operational debt by the Corporate Debtor and as such the Operational Creditor has obtained only a Certificate from the Chartered Accountant who maintains the books of accounts of the Operational Creditor and that in lieu of Bank statement, the same may be taken as Certificate in compliance with Section 9(3)(c) of IBC 2016. 16. However, both in the case of CP(IB)-180(ND)/2017 as well as ....
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.... and (iii) It has failed to disclose the pendency of the dispute before the West Bengal State Micro Small Enterprises, Facilitation Council and in view of the suppression of the same, the application should be dismissed as the concealment of facts Qua between the parties. (d) In relation to objection (ii) in paragraph (c) as above, the applicant submits that there is an inconsistency in the pleadings of the Corporate Debtor in as much as on the one hand, it is contended that no goods had been supplied, but on the other hand, it is stated that the quality of material was of inferior quality. Thus, it is claimed by the Operational Creditor that inconsistent pleadings of the Corporate Debtor in itself exposes the fallacy of the stand taken by the Corporate Debtor and also establishes that in fact, goods have been supplied to the Corporate Debtor and it cannot be denied by the Corporate Debtor. (e) In relation to the existing dispute of which an issue is sought to be projected as in objection (iii) paragraph (c) as above, namely in relation to the proceedings as filed before the Facilitation Council, it is submitted by the Operational Creditor that the same has been withdrawn pri....
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....ditors who are before this Tribunal on notice, namely SBI having along with the other members of the consortium of bankers more than 75% of the voting percentage in the Committee of Creditors as contemplated under Section 22 of IBC, 2016 as well as the Operational Creditors who though does not have any significant voting due to the presence of the Financial Creditors in the Committee of Creditors and which is required to okay the appointment of an Insolvency Professional, of course subject to confirmation by IBBI and this Tribunal, to carry the CIRP to its logical conclusion as contemplated under IBC, 2016. However, in view of triggering the CIRP before this Tribunal by Operational Creditor their voices are also taken into consideration. However, the application of the Corporate Debtor only reinforces the decision of this Tribunal in initiating the CIRP as contemplated under IBC, 2016. 19. Based on the above discussions while dismissing C.P. No. (IB)-180(ND)/2017 and CP. No. (IB)-181(ND)/2017 this Tribunal admits C.P No. (IB)-160(PB)/2017 and the necessary consequences of moratorium as provided under Section 14 of IBC, 2016 will follow in relation to the Corporate Debtor. 20. How....
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....ance as provided for, failing which this Tribunal under Section 9(5) of IBC, 2016, is required to reject the application. Further, in view of the fixed time frame fixed for disposal also which casts an onus on this Tribunal to decide expeditiously and under the circumstances, the Certificate from the banker as contemplated enables this Tribunal to be prime-facie satisfied that the amount of debt remains unpaid to the account of the Operational Creditor as the bills/invoices would have been primarily negotiated through the banker of the operational creditor in the first place and hence the banker of the operational creditor would be in the most privileged position to ascertain whether the proceeds have been successfully negotiated and credited to the account of the Operational Creditor, namely its constituent from the customer of the Operational Creditor (i.e.) the Corporate Debtor . Thus, viewing from any angle, the certificate from the Banker becomes imperative as contemplated under the provisions of IBC, 2016 and the bankers cannot, in any way wish away the responsibility of issuing the Certificate in terms of the provisions of Section 9(3)(c) of IBC, 2016 as otherwise serious co....