TaxTMI 
TaxTMI 
2019 (3) TMI 1523
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....alculated at the interest rate ranging from 12% to 21% per annum up till 14th September, 2018. 2. This Operational Creditor is one of the group Companies of Sojitz Group Companies, this group is a large Japanese general trading corporation engaged in a wide range of business globally, including buying, selling, importing, exporting, manufacturing and selling products as well as providing services. In 2015, one of its group companies namely, Sojitz Corporation (SJC) began exploring opportunities for business collaboration and joint investment with the Corporate Debtor. In furtherance of it, SJC entered into a non-binding Memorandum-Strategic Alliance (SBAA) dated 23.06.2016 with the Corporate Debtor for a limited period of one year and this expired in June, 2017. It was for exploration of opportunities and collaboration for trading and joint investment. Besides this, SJC and the Corporate Debtor also entered into two Confidentiality Agreements dated 27.03.2015 and 07.04.2016 (collectively called as "SJC Memoranda"), to protect any confidential/proprietary information disclosed among them. 3. Why this background is mentioned here is because the Corporate Debtor tried to interpo....
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.... Letter of Credit being provided to APMDAC for supply of Barite Lumps, basing on the Purchase Order given by the Corporate Debtor, the Operational Creditor from time to time invoiced the supplies received by the Corporate Debtor against the remittance of money from the Corporate Debtor. This claim transaction is altogether separate and independent transaction proceeded on the separate Letter of Credit given by the Operational Creditor. In this process, some commission would come to the Operational Creditor that is reflected in the e-mail correspondence between the Operational Creditor and the Corporate Debtor from July 11, 2017 to July 13, 2017 [Annexure-II(E)]. 6. As per this claim transaction, the Corporate Debtor on 14.07.2017 raised Purchase Order for supply of 38,000 MTs 'A' Grade Barite Lumps with 4.27 specific gravity costing around Rs. 24,89,53,333. In pursuance thereof, the Operational Creditor raised tax invoices from 27.07.2017 to 31.08.2017. 7. Soon thereafter in the month of December, 2017, when the Operational Creditor on 19.12.2017 put it to the Corporate Debtor that they had not yet received the payment, on the same day, the Corporate Debtor reciprocat....
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....per the Corporate Debtor, resorted to taking advantage of the Corporate Debtor's established facilities in Saudi Arabia. So to help out SJC, the Corporate Debtor had supplied Barites directly to AI Alia on assurances given by Sojitz for trade financing of this transaction. Accordingly, three shipments weighing 38,000 MTs were released by the Corporate Debtor to AI Alia from July, 2016 to October, 2016. With this defence, the Corporate Debtor, for the first time has attempted set out dispute challenging the very nature of the transaction itself. By saying so, the Corporate Debtor Counsel has sought for dismissal of this Company Petition on the ground that this claim is hit by non-existence of debt. 13. On perusal of these facts placed by either side, it is evident that it is a transaction that has happened in between the Operational Creditor and the Corporate Debtor in the months of July and August, 2017. Before entering into this transaction, there is a clear cut correspondence between the Operational Creditor and the Corporate Debtor making it clear that it is a transaction for supply of 38,000 MTs of Barite Lumps from APMDC on the monies supplied by the Operational Credito....
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....efore the 60 day from the date Sojits make payment of LC Bills. (Total period of this cycle is 90days + 60 days) * Charges and expenses relating to opening of LC are for account of OREN. OREN needs this LC to be opened in this week itself. Hence we need concurrence of Sojitz as quickly as possible to prepare necessary documents for LC opening. The approximate quantity of Barites to be procured is 38000 MT. Looking forward. Thanks & regards R. Soundararajan Director" 16. It is also imperative to look into the reply that has come from the Operational Creditor which is as follows: "From: karita.hiroki [mailto:[email protected]] Sent: Tuesday, July 11, 2017 7:05 AM To: RS RAJAM Cc: aritomo.shinji; 'Irfan'; [email protected]; [email protected]; [email protected];[email protected] Subject: RE: Finance arrangement for Barite procurements Dear Mr. Rajan, Thank you for your suggestion. Let me make sure some points. (1) We understand that normal payment term between you and APMDC is 100% payment in advance (Mr. Irfan also mentio....
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....of the Operational Creditor. On summing up this letter, it is ascertainable that Letter of Credit in respect to this transaction has come from the Operational Creditor to APMDC, therefore it is discernable that it is an independent and separate transaction with fresh arrangement by ensuring 38,000 MTs Barites was assigned to the Operational Creditor, and thereafter within 90 days from the day the material was delivered to the Corporate Debtor, the money was remitted to the account of APMDC from the LC account. After the Operational Creditor having furnished all this material reflecting the Operational Creditor paying money to APMDC for assignment of the material, thereafter the Corporate Debtor lifting that material on behalf of the Operational Creditor by placing purchase order upon the creditor, it can easily be said that material was routed to the Corporate Debtor through the Operational Creditor because the right of sale of 38,000MTs of barites has been conferred upon the operational creditor so as to draw out LC limit from the Operational Creditor. 19. As to the understanding between the Operational Creditor and the Corporate Debtor, this Corporate Debtor placed Purchase Or....
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.... between them and the Operational Creditor defaulted paying the money after LC was released by the Operational Creditor and after material (barites) was taken out from APMDC on money being paid by the Operational Creditor. The debtor benefited at the cost of the Operational Creditor money, after receipt of such benefit, the corporate debtor defaulted paying to the Operational Creditor. 21. Therefore, we are of view that what all agreements the Corporate Debtor entered into with group companies and correspondence in respect to other transactions will no way cast any doubt over the existence of debt or default. In view thereof, the material subsequently set out by this Corporate Debtor pales into insignificance as against the proof of existence of debt and default against the Corporate Debtor established by the Operational Creditor. 22. On looking at the address of the Interim Resolution Professional Mr. Subhash Kumar Kundra located at Delhi, we are of the view that when the corporate debtor is located at Chennai, it is quite obvious that Financial Creditors of this company must be located at Chennai, in this background it is always in fitness if local professional is appointed....