TaxTMI 
TaxTMI 
2020 (4) TMI 772
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....entioned in the Company Petition, are as follows: (1) Boart & Wire Sri (hereinafter referred to as 'Petitioner/Operational Creditor') is a Company incorporated under the laws of Italy having its Registered Office at 36030, Fara Vicention (VI), via Astico, 40-Itlay, from March 2016 onwards. (2) M/s. J.F.D. India Private Limited (hereinafter referred to as 'Respondent/Corporate Debtor') is a Private Limited Company incorporated on 08.09.2015 having CIN: U29244KA2015FTC082739. Its Nominal Share Capital is Rs. 96,30,000/- (Rupees Ninety Six Lakhs and Thirty Thousand Only) and Paid-up Share Capital is Rs. 95,07,520/- (Rupees Ninety Five Lakhs Seven Thousand Five Hundred and Twenty Only). (3) It is stated that the Operational Creditor agreed to supply on credit certain raw and consumable materials such as plastic, galvanised steel cable, sintered diamond beads and any other raw material that the Corporate Debtor required for replastification of diamond wires for the benefit of the consumers who were referred to it by the Operational Creditor. The payment for the replastification services would be made by the Operational Creditor since the final ....
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....king its outstanding dues. Whilst demanding its dues, the Operational Creditor duly set-off the amounts that were payable to the Corporate Debtor from its total outstanding. In response, on 4th May, 2019, the Corporate Debtor wrote to the Operational Creditor seeking time for payment of its outstanding dues. Thereafter, on 9th May 2019, the Corporate Debtor, reiterated the fact that their financial position was such that they would not be able to pay the outstanding amounts claimed by the Operational Creditor, and even offered to consider sale of their assets to pay the Petitioner. Simultaneously, the Corporate Debtor sought some time to reconcile its accounts. Thereafter, on 20th May 2019 the Corporate Debtor made a part payment of EUR 87,107 to the Operational Creditor. On 21st May 2019, the Corporate Debtor, finally shared a reconciliation chart with the Petitioner. In this reconciliation, the Corporate Debtor admitted all due invoices of the Operational Creditor. The Corporate Debtor admitted that a sum of EUR 5,35,790.08 was due and payable to the Respondent but made no payments. (6) It is further stated that constrained by the aforesaid, on 13.06.2019, the Operationa....
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....it is aggrieved by the breach of contract by the Petitioner. In furtherance of the same, the Respondent has also initiated legal proceedings before the Tribunal of Vicenza, Italy, in accordance with the provisions of the Agreements. (3) It is also stated the Petitioner is an entity registered under the laws of Italy and continues to remain so having its registered office in Italy. The Respondent in an entity registered in India under the Companies Act, 2013 incorporated since the year 2015. The Shareholders and Director/President of the Petitioner and the Respondent floated the idea to market the Petitioner's product in India as it had customers in India and wished to explore the market and thus the Respondent was set-up solely to explore the business opportunity in the productions, assembly, trade and representation of tools in general for machine tools and processing, trade and representation relating to steel cutting tool. As such, the primary purpose of incorporation was the arrangement between the Petitioner and the Respondent's parent company in Italy-Job Finance Development Group S.P.A. In fact, at that time the parent company of the Respondent was 100% Shar....
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....9;default' in payment of such 'debt' by the Respondent. The Respondent has invoked Paragraph 16 of the Trade Agreement and article 21 of the Agency Agreement and initiated legal proceedings in Italy as the dispute herein is arising out of the contract between the parties and the Court of Vicenza enjoys the exclusive jurisdiction to adjudicate upon disputes under the contract, and filed an Appeal for injunction before the Tribunal of Vicenza bringing to the Hon'ble Tribunal's consideration the financial dispute regarding the payment of commission for agency and purchase of products, including the dispute in calculation of expenses and thereby seeking that the Tribunal direct the Petitioner to rectify the error and pay to the Respondent the amount lawfully due to it along with certain directions pertaining to the matter. The Tribunal of Vicenza has directed the Petitioner to submit the documents in support of its case in order to adjudicate on merits. This Appeal was filed on 10th July 2019 i.e. prior to the filing of this application under section 9 of the IBC and the Respondent is aware of the same. (7) It is denied as false and incorrect that the Petit....
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....and Notice clearly indicates that the case of the Petitioner is based on the trade agreement dated 10th August 2016 ('Trade Agreement'), whereas the issue in hand relate to another agreement, agency agreement dated 4th October 2016. Also, the Italian proceedings are not pre-existing, since they have been issued substantially after the receipt of the Demand Notice for payment. 6. Heard Shri Shobhit along with Shri Varun S., learned Counsels for the Petitioner and Ms. Asha S. Anand along with Ms. Sushma Mathur, learned Counsels for the Respondent. We have carefully perused the pleadings of the parties and extant provisions of the Code and the Rules made thereunder. 7. From the facts brought before us, it is seen that the Petitioner/Operational Creditor, M/s. Boart & Wire Sri, is an entity registered under the laws of Italy and continues to remain so having its registered office there. On the other hand the Respondent was set-up as an Agent of the Petitioner in India, as an arrangement between the Petitioner and the Respondent's parent company in Italy-Job Finance Development Group S.P.A. The Agreement had a termination clause that could be triggered at the instance ....
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....ditor states that the amounts due to it kept on accumulating, in response to its notice, the Respondent/Corporate Debtor stated that it needed more time to reconcile its accounts. After some reconciliation, on 20th May 2019 the Corporate Debtor made a part payment of EUR 87,107 to the Operational Creditor, but failed to pay the balance amounts of Rs. 5,73,16,772/-, after set off. On 13.06.2019, the Petitioner/Operational Creditor served upon the Respondent/Corporate Debtor a demand notice under section 8 of the I&BC, 2016. On the other hand, on 23.06.2019, in its reply, the Respondent claimed that it in turn was due to receive a sum of Euros 679,935 in the net. Thus we find that even though the Petitioner may have raised invoices in respect of the goods supplied, the amount payable to it was subject to reconciliation by the Respondent, as agreed to, as well as on adjustments of the invoices raised by the Respondent. Even though such reconciliation and adjustment may have been done later, the fact remains that the debt could have crystallised only after such reconciliation and adjustment was completed, and not before sending the Demand Notice. Before the Demand Notice there was no c....