TaxTMI 
TaxTMI 
TaxTMI 
2019 (11) TMI 772
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..... No.GM/GTT/ELEGANCE/184/17-18 dated 17.01.2018. 2. Brief facts of the case, as mentioned in the Company Petition, are as follows: (1) M/s. Ponneri Steel Industries ('Petitioner/Operational Creditor') is engaged inter alia in the business of sale of TMT Bars and having its office at GNT Road, Peravallur Village, Chinampedu Post, Thiruvallur District, Ponneri-6012016 and also at No.5/11, Branson Garden Street Kellys, Kilpauk, Chennai-600010. (2) M/s. Gulam Mustafa Enterprises Private Limited ('Respondent/Corporate Debtor') is a Private Limited Company incorporated on 14.04.1982, under the provisions of Companies Act, 1956 with CIN: U70100KA1982PTC004720 and having its registered office at No.06, G.M. Pearl 1st Stage, 1st Phase, BTM Layout, and Bangalore - 560068. Its authorised is Rs. 10,00,000/-(Rupees Ten Lakhs Only) and the Paid-up Share Capital is Rs. 1,40,500/- (Rupees One Lakh Forty Thousand Five Hundred Only). (3) The Operational Creditor is engaged, inter alia in the business of sale TMT Bars and the Corporate Debtor requiring Elegance and GTT tower, has issued purchase order bearing No.GM/GTT/ELEGANCE/184/17-18 dated 17.01.2018, with Operational Creditor subject to t....
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....s not tenable so as to invoke the provision of the Code. The intention of the Code is not for the purpose of recovery of any debt. The issuance of demand notice and thereafter filing Petition before this Tribunal under the Code is against the intent of the Code. The main objective of the Code is to streamline the insolvency process but not debt recovery. The actions of the Petitioner are not in conformity with the objective or intention of the Code. The initiation of proceedings under the Code is not rational, keeping in view the interest of the Respondent. The Code should only be aimed at revival of insolvent/bankrupt Company but not to use its provisions as a recovery mechanism. The Respondent reserves its right to proceed against the petitioner. (3) The Respondent stated that it is not an insolvent Company and thus invoking the provisions of the Code to initiate the CIRP shall adversely affect the interests of the Respondent who is not an insolvent entity in any manner whatsoever. The Respondent has many employees, shareholders, creditors, customers, business clients, and other stakeholders, whose interest would be at stake upon initiation of CIRP. (4) It is alleged that the....
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....18, they are in continuous correspondence with the Respondent. However the Petitioner failed to take appropriate legal action and thus issued Demand notice dated 29.09.2018, in Form 3, under the Code by inter alia demanding to pay an outstanding amount of Rs. 28,69,533/- as on 30.06.2018. Therefore the Application is filed in accordance with law and the debt and default is proved beyond doubt and there is no dispute raised by the Respondent and thus Petition is eligible to be admitted by initiating CIRP against the Corporate Debtor. 6. Shri Bojanna K.J, learned Counsel for the Respondent, on the other hand, while reiterating various averments made in the statement of objections, as briefly stated supra, has further submitted that in order to maintain good commercial relationship among business circle, has not claimed damages for inferior quality of material supplied by petitioner and thus requested to replace it. However, the for the reasons best known to the Petitioner, instead of maintaining good commercial relationships, as expected by the Respondent, has invoked the provisions of Code to harass and tannish its goodwill in the market. Since the Petitioner promised to replace de....
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....the claim of the Petitioner is liable to be dismissed for the reasons as stated above. 8. The Purchase Order No.GM/GTT/ELEGANCE/184/17-18 dated 17.01.2018, issued by the Respondent, contains the following terms and conditions :- (1) "Please mention our purchase Order No. on all delivery challan/Bills to ensure timely payment. (2) Payment is effective by 60 days PDC. (3) 50% Advance Against the Invoice Dispatch made by the Invoice Value. (4) Interest at Rate 18% is payable beyond 70 days. (5) Without purchase order no material should be supplied at any site. (6) Delivery of material supplied should be strictly as per delivery schedule mentioned on Purchase Order. (7) Delivery at sites accepted between 9.30 am to 5.30 pm on all working days except Sundays. (8) Actual quantity received and accepted at site exclusive of breakage is taken into consideration. (9) On delivery Challan/Bill, Purchase Order No., Quantity, make, size and name should be mentioned. (10) When purchase Order is issued in set, delivery of material should be in full set only. (11) If material supplies is of inferior quality then site engineers/supervisor has got every right to reject the mate....
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....al in question was of required standard. When the Respondent failed to pay the alleged outstanding claim, the Petitioner too failed to take any appropriate legal action within reasonable time. In the first instance, after supplying the material in question, the Petitioner should try to get the certification of the quality of material so as to make any claim. However, after issuing emails, the Respondent finally issued statutory demand notice under the Code, dated 29.09.2018, by demanding to pay outstanding amount within 10 days. The instant Company Petition is filed only on 18.12.2018, after lapse of more than 2 months. Therefore, the Petitioner has failed to initiate appropriate legal action to recover the alleged outstanding amount within a reasonable time from the date of supply of the material and also within the reasonable time from the issue of the said demand notice. 11. The instant Company Petition is filed to invoke provisions of the Code in a very casual manner against the Corporate Debtor. The instant Application/Petitioner is filed by the Petitioner under Rule 6 of the I&B(AAA) Rules, 2016, and under part III of application, it is stated as under: PART-III PARTICULAR....