2020 (3) TMI 919

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....f Maharashtra. Therefore, this Bench has jurisdiction to deal with this petition. 3. The present petition was filed on 16.10.2018 before this Adjudicating Authority on the ground that the Corporate Debtor failed to make payment of a sum of Rs. 32,96,390/- (Rupees thirty-two lakh ninety-six thousand three hundred and ninety only) as principal and Rs. 11,20,772/- (Rupees eleven lakh twenty thousand seven hundred and seventy-two only) as interest as on 31.03.2017 till 31.08.2018. The Operational Creditor claims that it is entitled to further interest on Rs. 32,96,390/- from 01.09.2018 till payment. 4. The case of the Operational Creditor is as follows: - (a) The Operational Creditor is engaged in the activity of manufacturing, selling and supplying Ready Mix Concrete (RMC). The Corporate Debtor placed an order for supply of RMC, the Operational Creditor supplied the same and raised various invoices thereon [Para 1 of Part IV at page 13 of the Petition]; (b) The Operational Creditor raised the following invoices: (1) Invoice No.00001 dated 08.04.2016 for Rs. 1,10,600/-; (2) Invoice No.00011 dated 14.4.2016 for Rs. 6,21,363/-; (3) Invoi....

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....due and payable by the said Sarneshwar Infra Private Limited and a sum of Rs. 1,26,000/- is due and payable for goods sold and delivered by the Corporate Debtor to Sarneshwar Infra Private Limited and Technotrade Impex India Private Limited. 8. The Corporate Debtor further affirms in its reply that Mr. Natwarlal Purohit represented to the Corporate Debtor that he was in absolute control of management of the three entities, viz.,Sarneshwar Infra Private Limited, Technotrade Impex India Private Limited and NN Enterprises, and that the business carried out by the said entities are inter-connected. Therefore, when the Corporate Debtor requested Mr. Natwarlal Purohit to clear the outstanding amount of Rs. 25,75,226/-, he requested the Corporate Debtor to purchase the materials from the Operational Creditor equivalent to the amount which was due and payable to the Corporate Debtor. 9. The Corporate Debtor states that it was represented by virtue of this agreement that there would a net effect of "Nil" balance in the accounts of Sarneshwar Infra Private Limited, Technotrade Impex India Private Limited and NN Enterprises. The Corporate Debtor disputes the reliance placed on the email....

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....s and reply [para 6 at p.113 of the Reply]; (c) The Corporate Debtor states that under the semblance of rectifying "typographical errors" in notice dated 06.09.2018, the Operational Creditor has materially changed the notice dated 20.09.2018. He further states that the changes are with the intention to conceal from this Tribunal the relevant documents inter alia showing dispute between the parties [para 9 at page 114 of the Reply]; (d) The Corporate Debtor is engaged in the business of civil contractors and construction, and the company is undertaking several construction and infrastructure projects pertaining Government, Semi-Government and private individuals. The Corporate Debtor states that the company is handling projects worth Rs. 810 crore approximately and has around 600 employees. The Corporate Debtor is in very good and sound financial position [para 10 at pp.114-115 of the Reply]. (e) Mr Natwarlal Purohit, one of the partners of the Operational Creditor at the time of the transactions in question, was also a director of the two companies, viz., Sarneshwar Infra Private Limited and Technotrade Impex Private Limited. The Corporate Debtor had supp....

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....(h) Despite the consistent stand taken by the Corporate Debtor regarding set off/adjustment of accounts between the three entities, the Operational Creditor has falsely denied the nexus between the three entities and sworn a false affidavit at pp.25-26 of the Petition that "nothing material has been concealed." [para 11.8 at p.119 of the Reply]; (i) The Operational Creditor is not a registered partnership firm, and therefore, in terms of section 69 of the Indian Partnership Act, 1932, the present company petition is not maintainable [para 25 at p.123 of the Reply]. (j) In the guise of correcting "typographical errors," the Operational Creditor has materially altered the second Demand Notice issued on 20.09.2018, one day after receipt of the reply dated 18.09.2018 (which was received by the Operational Creditor on 19.09.2018). It is obvious from the second Demand Notice that the contents of the reply to the first Demand Notice have been factored in and material improvements to the position of the Operational Creditor have been made therein. Further, there is wilful and material suppression of facts and documents [para 36 at p.126 of the Reply]. 14. We have heard....

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....und that it would only apply to suits. It was held in that case as follows:- "The present case, being "an application under section 7, would fall only within the residuary Article 137." 20. This view was further reiterated by the Hon'ble Supreme Court in Sagar Sharma v. Phoenix ARC (P.) Ltd. [2019] 110 taxmann.com 50/156 SCL 707 (SC) wherein the Court noted that applications under the IBC are petitions. 21. We, therefore, hold that the provisions of section 69(2) of the Indian Partnership Act, 1932, applies to "suits" and therefore, cannot apply to "proceedings" under the IBC. 22. We now come to the issue as to whether the Operational Creditor suppressed material information, as alleged by the Corporate Debtor. 23. Learned Counsel for the Corporate Debtor relied on the judgment of the Hon'ble Supreme Court in SP Chengalvaraya Naidu v. Jagannath [1994] 1 SCC 1 to support his contention that the petition ought not to be admitted since the Operational Creditor has not approached this Tribunal with clean hands. In particular, he relied on the following extracts, - "5. ... The courts of law are meant for imparting justice between the parties. One wh....

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...., the Learned Counsel for the Corporate Debtor has submitted that there were long-standing business relations between the Corporate Debtor and the Operational Creditor, Sarneshwar Infra Private Limited and Technotrade Impex India Private Limited. When the goods in question were supplied by the Operational Creditor to the Corporate Debtor, Mr Afghan Babu Khan, the authorised signatory of the Operational Creditor-Partnership firm, was a director in Sarneshwar Infra Private Limited. The Registered Office of Sarneshwar Infra Private Limited is the same as that of the Operational Creditor. 26. The crux of the matter is that there was a dispute between the partners of the Operational Creditor, who were also directors in Sarneshwar Infra Private Limited and Technotrade Impex Private Limited. The Operational Creditor as well as Sarneshwar Infra Private Limited and Technotrade Impex Private Limited had business dealings with the Corporate Debtor. 27. We notice that the second Demand Notice dated 20.09.2018 issued by the Operational Creditor has been materially changed and it is not merely to correct "typographical errors." In particular, paras 8, 9 and 10 at pp.92-94 of the Petition h....