TaxTMI 
TaxTMI 
TaxTMI 
2018 (4) TMI 1848
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....ated that CD is registered with the Registrar of Companies (ROC) of NCT of Delhi and Haryana and the date of incorporation is stated to be 6.8.1985 and having a nominal share capital of Rs. 25,00,00,000/- and that paid up share capital is of Rs. 21,93,72,280/-. In relation to the proposed Interim Resolution Professional, no name has been proposed by OC in the application. Coming to the total amount of debt given under Part-IV of the application, it is stated to be Rs. 6,98,03,036/- and that the date from which the debt fell due is stated to be 27.8.2016 and the transaction giving rise to the claim or the debt is stated by OC to be that of supply of power to CD and that the amount in default has been computed as provided in Annexure-V to the typed set of the application. 3. Under Part-V of the application it is stated that the claim is backed by Power Supply Agreement (PSA) dated 24.7.2016 as entered into between OC and CD and arising out of the said agreement, invoices have also been raised on 27.08.2016, 01.09.2016 and 1.10.2016 as against the CD by OC in relation to the transaction between OC and CD as contemplated under the above PSA. In order to back the claim of Rs. 6,9....
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....nd Commercial Appellate Division, Aurangabad, Maharashtra. Since on oath, OC has suppressed material facts and hence is guilty of suppressio veri suggestio falsi" and for the said reason alone this application of OC is required to be dismissed. It is further averred that CD was established in 1989 and is one of the leading alloy steel plants in the Western parts of India and the products manufactured by CD are the major raw material for automobile engineering and forging industries and that the products Of CD are also exported and are ISO 9001-2000 compliant. It is further stated by CD that several leading industrial houses throughout India use the products manufactured by CD and it has got enough wherewithal to sustain the operations of CD and is a solvent company enjoying sufficient sanction limits from its bankers. In relation to the transaction it is averred by CD that based on the assurances of OC and as OC approached the CD for supply of power and as OC had guaranteed that it had all the necessary compliances of generation of captive power, as required under the provisions of Electricity Rules, 2005 and based on the said assurances, CD was led to believe that OC had all the c....
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....part of OC and since OC has breached the terms of PSA by non-supply of power, PSA was terminated from 20.10.2016 to which effect a letter dated 20.10-2016 was issued by CD to OC. In View of the non-supply Of power in breach of contractual obligation and also due to non-fulfilment of CPP status, CD was forced to look for another supplier of power and in relation to the same for the month of November, 2016 was forced to approach MSEDCL to consider the application of M/S Adani Power even though a subsequent request was made by the OC to CD for rescheduling of power for the month of December, 2016, despite all the correspondence exchanged between the parties and termination letter as referred supra; however OC did not mention about the stoppage and about the CPP status and taking into consideration the above and in the circumstances was forced to purchase power at higher rate than the rate as agreed to between OC and CD and was also forced to incur huge cost. In the meanwhile, MSEDCL it is stated had addressed a letter dated 5.7.2017 to OC with a copy marked to CD questioning in relation to CPP status for the financial years 2015-16 and 2016-17 having not been fulfilled of the users an....
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....ly a moon shine or illusory on the part of CD and that the application of the OC is hence sustainable under IBC,2016. 9. The parties were also allowed to file in addition to oral submissions, written submission too which has also been availed by the respective parties and written submissions are on record of both OC and CD. At the time of oral submissions, Ld. Counsel appearing for both the parties reiterated their respective stand as taken in the pleadings filed before this Tribunal and relied upon annexures filed by them. I-d. Counsel appearing for OC stressed on the point that there has been no breach on the part of OC and that under the terms of the PSA as entered into between the parties failure to make payment in relation to invoices raised give rise to an event of default under clause 3.1 of PSA and in the circumstances OC taking into consideration clause 8.2 of PSA is not duty bound to continue to perform its part of the bargain and OC has discretion to stop power supply as it cannot be forced to supply power without receiving payments in relation to the invoices raised for the earlier months and jn the circumstances it was fully justified in stopping the power....
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....seeking for damages, the Petition is liable to be dismissed. 11. This Tribunal has carefully considered the rival pleas as put forward by the contesting parties by way of elaborate pleadings and documents as well as written submissions filed by the respective parties and oral submissions where the Ld. Counsels have sought to espouse the cause of the parties for whom they are representing with precedents and case laws not only from the Courts of India but as well as that of United Kingdom. However, in deciding the cases under IBC,2016, even though the enactment is of recent origin this Tribunal is primarily guided by the lucid exposition of law in relation to IBC,2016 as expounded by the Hon'ble Supreme Court which has virtually settled the aspect which this Tribunal is required to consider at the time of hearing a Petition by a Financial Creditor under Section 7 and by an Operational Creditor under Section 9, both under IBC,2016t for the purpose of admission of the Petition or its rejection. 12. While M/S Innoventive Industries Ltd. v. ICICI Bank & Another, Civil Appeal Nos. 8337-8338, the decision of the Apex Court deals with pre-dominantly in relation to a Petition filed by....
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....e may be (Section 8(1)). Within a period of 10 days of the receipt of such demand notice or copy of invoice, the corporate debtor must bring to the notice of the operational creditor the existence of a dispute and/or the record of the pendency of a suit or arbitration proceeding filed before the receipt of such notice or invoice in relation to such dispute (Section 8(2)(a)). What is important is that the existence of the dispute and/or the suit pr arbitration proceeding must be pre-existing - i.e. it must exist before the receipt of the demand notice or invoice, as the case may be. In case the unpaid operational debt has been repaid, the corporate debtor shall within a period of the selfsame 10 days send an attested copy of the record of the electronic transfer of the unpaid amount from the bank account of the corporate debtor or send an attested copy of the record that the operational creditor has encashed a cheque or otherwise received payment from the corporate debtor (Section it is only if, after the expiry of the period of the said 10 days, the operational creditor does not either receive payment from the corporate debtor or notice of dispute, that the operational creditor may....
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....ot been completed within the period of 7 days granted by the proviso (Section It may also reject the application where there has been repayment of the operational debt (Section 9(5)(ii)(b)), or the creditor has not delivered the invoice or notice for payment to the corporate debtor (Section 9(5)(ii)(c)). It may also reject the application if the notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility (Section 9(5)(ii)(d)). Section 9(5)(ii)(d) refers to the notice of an existing dispute that has so been received, as it must be read with Section 8(2)(a). Also, if any disciplinary proceeding is pending against any proposed resolution professional, the application may be rejected (Section 9(5)(ii)(e)). 25. Therefore, the adjudicating authority, when examining an application under Section 9 of the Act will have to determine: (i) Whether there is an "operational debt*' as defined exceeding Rs. 1 lakh? (See Section 4 of the Act) (ii) Whether the documentary evidence furnished With the application shows that the aforesaid debt is due and payable and has not yet been paid? and (iii) Whether there is existence of a disp....
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....the Corporate Debtor, results in the rejection of the application seeking to initiate CIRP by the adjudicating authority. Thus a Corporate Debtor in order to get away from the clutches of IBC, 2016 is required to demonstrate that there is a dispute which is preexisting as between it and the OC in relation to the transaction out of which the claim had arisen and default is said to have been committed and that only due to the same (i.e.) pre-existing dispute, the amount remains, if at all, unpaid. To the question as to the extent or standard or degree to which the CD is required to demonstrate a pre-existing dispute, and which is not a mere moonshine or illusory to stave off the process of initiation of CIRP, the Hon'ble Supreme Court, after a detailed consideration of the earlier winding up dispensation under Companies Act, 1956, wherein a bona fide dispute in existence between a Petitioner and a debtor Company was required to be established to stave off the process of winding up against the Company as compared to the present one under IBC,2016. Thus, in comparison to the demonstration of a bona fide dispute being a high bench mark set under 1956 Act, , under IBC,2016 the stand....
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....ned Counsel for CD contends that a false affidavit has been filed by the deponent on behalf of OC under Section 9(3)(b) of IBC,2016 filed as annexure to the typed set which js reproduced hereunder for ready reference as to ascertain whether the disclosure of notice of dispute as mandated has been stated:- Affidavit in compliance with Section 9 of the Insolvency and Banlsuptcv Code, 2016 (p.69-70) I, Sunil Kumar Singh, S/o Mr.Hari Shanker Singh aged 43, Director of M/S OPGS Power Gujarat Limited having its office at No.6, Sardar Patel Road Guindy Chennai-600032, Tamil Nadu, do hereby solemnly affirm and sincerely state on oath as follows: 1. I'm the authorized signatory(Director) of the operational creditor and I am authorized to swear the affidavit on its behalf, I am also fully conversant with the facts and circumstances of the case. 2. I submit that operational creditor was established in the year 2007 and it deals ....
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....olvency and Bankruptcy Code, 2016. Hence the present petition is being made. In view of the above, I pray the Hon'ble Bench to admit the Insolvency and Bankruptcy petition filed against the Corporate Debtor. FOR OPGS POWER GUJARAT PRIVATE LIMITED 6.11.2017 SUNIL KUMAR SINGH Director DIN:05174226" 18. Learned Counsel for the CD vehemently assails the above statements of the deponent in the above affidavit filed by the Director of OC, more particularly paragraph 7 in relation to the statement that no notice of any dispute had been received from CD by OCR but however on the other hand it is submitted that OC had thought it fit to enclose the same along with the Petition as an Annexure at page 76 onwards with the typed set of documents listed as Serial No. 13 in the index page. It is the contention of the Learned Counsel for CD that on this ground alone, notice of the Petition in the first place, taking into consideration Section 9(5) (ii)(d) should not have been given to CD to defend the action herein and in any case ought to be rejected outright and costs should be imposed. 19. Further, it is also pointed out by Ld. Counsel for CD that there has been an deliberate....
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....early shows that even though the notice of default has been received by OC prior to the filing of this Petition and which incidentally has also been annexed as mentioned in the earlier part of the order, there seems to be a covert attempt on the part of the Petitioner at least at the stage of moving this Petition to not to state anything in Affidavit filed under Section 9(3)(b) of IBC, 2016 with a view not to have the Petition rejected outright taking into consideration Section 9(5)(ii)(d) of IBC, 2016. The affidavit thereby filed has stifled the truth in effect of the notice of dispute as sent by the CD and which had precluded the Tribunal from exercising its powers under Section 9(5)(ii)(d) of IBC, 2016 for rejection Of the Petition if thought fit and which subsequently had lead to issue of notice to CD and the attendant hearings of this Petition by this Tribunal. The attitude of the Petitioner in this regard stands strongly deprecated in invoking the provisions of IBC,2016 despite being aware that there is a dispute in existence and in any case that a notice of dispute is required to be brought to the notice of this Tribunal by filing an affidavit disclosing facts as required un....