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2021 (9) TMI 334
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....nction Floor, R.K.B. Path, Dibrugarh-786001, Assam and is a Unit of M/s. Chandrabali Commercial India Pvt. Ltd.). 3. The Respondent Corporate Debtor (CD) Company, namely M/s. Bochapathar Tea Estate Pvt. Ltd. is also a Private Limited Company incorporated on 20.01.1947 with CIN No. U01132AS1947PTC000756 and having its Registered Office situated at P.N. Road, Dibrugarh, Assam - 786001 and the paid-up Share Capital of the Respondent (CD) Company is Rs. 44,46,000.00 (Rupees Forty Four Lacs Forty Six thousand) only. 4. The Applicant has also proposed Mr. Sandeep Khaitan, 2nd Floor, Sanmati Plaza, G.S. Road, ABC, Guwahati 781 005, Email ID: [email protected], mobile No. +918011048037 having Registration No. IBBI/IPA-001/IP-P00532/2017-2018/10957 to be appointed as IRP. 5. It is stated that the Corporate Debtor M/s. Bochapathar Tea Estate Pvt. Ltd. executed an agreement on 01.02.2017 with the Applicant Damayanti Tea Industries and availed advance of Rs. 3,34,30,000.00 (Rupees Three Crores Thirty Four Lacs Thirty thousand) only with an interest payable at 16% per annum which was accrued to Rs. 1,16,47,912.00 (Rupees One Crore Sixteen thousand Forty Seven thousand Nine hundr....
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....reement dated 01.02.2017 executed between Financial Creditor M/s. Damayanti Tea Industries and the Corporate Debtor M/s. Bochapathar Tea Estate Pvt. Ltd. - Annexure-4. (ii) Copy of the Bank Statements from 01.09.2016 to 31.08.2018 of the Financial Creditor M/s. Damayanti Tea Industries - Annexure-5. (iii) Copy of a chart of Daily Interest Calculation for the Corporate Debtor M/s. Bochapathar Tea Estate Pvt. Ltd. - Annexure-6. (iv) Copy of the Audited Accounts for the Financial Year 2016-2017 of the Corporate Debtor M/s. Bochapathar Tea Estate Pvt. Ltd. - Annexure-7. 12. The Applicant has prayed for the following relief/s: "1. To admit the application and pass an order for initiating the Corporate Insolvency Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016 ("Code"); 2. To appoint an Interim Resolution Professional in terms of Section 16 of the Code; 3. To cause a public announcement of initiation of Corporate insolvency resolution process and calling for submission of claims under Section 15 of the Code; and 4. To declare a moratorium in terms of Section 14 of the Code; 13. When the ma....
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....currence of a 'default' may admit an application under Section 7. iv. As per Section 3(12) of IBC, 'default' means non-payment of debt when the whole or any part or instalment of the amount has become due and payable and is not paid by the Corporate Debtor. As per Section 3(11) of the Code, 'debt' means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and further as per Section 3(6)(b) 'claim' means a right to remedy for breach of contract under any law for the time being in force, if such right gives right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured. v. In the present matter, the Respondent failed to repay the advanced amount in terms of green tea leaves as per the terms of the agreement dated 01.02.2017, and hence gave rise to the Petitioner's claim, which the Respondent was liable to pay and hence a 'debt'. In lieu of which the Petitioner/Financial Creditor has filed the above-noted application under Section 7 of IBC and is well within its capacity to do so as Financial Cred....
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.... weightage on the fine leaf count for the supply of green leaf for the fortnight. On the finalization of rate for the supply of green leaves as mentioned above, the Party of the Second Part, for the green tea leaves supplied during the period, with the amount so calculated, such that the amount of the party of the Second Part gets diminished by such an amount and the interest on the rest is charged accordingly." x. The rate per Kg of green tea leaves was not fixed on the date of agreement due to green tea leaves being an agricultural product are subject to rising and falling market rates and a pre-determined fixed rate at the date of agreement was not possible as the same could be in prejudice to either the Financial Creditor or Corporate Debtor on account of rise and fall in market rates of green tea leaves. Hence, an arrangement of declaring the rate of green tea leaves based on the market rate of green tea leaves for the respective fortnight declared in the area was agreed upon by both Financial Creditor and the Corporate Debtor while executing the agreement dated 01.02.2017. Clarification to para 3(e): xi. The rate of green tea leaves is declared by t....
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....agrees to settle the account so created by the end of the tea-season, 2017 and after the settlement of accounts, the party, whichever is entitled to receive any amount from the other can claim the same from the other and the other party shall have to pay accordingly without any default." xvi. Hence, the Petitioner/Financial Creditor was liable to receive the outstanding amounts after settlement of accounts with the Respondent/Corporate Debtor but the Respondent/Corporate Debtor defaulted in doing the same, in lieu of which the present application under Section 7 of the Code is filed before this Hon'ble Adjudicating Authority. The Petitioner has also cited the following Judgments of the Hon'ble Supreme Court in support of its claims: 1. Innovative Industries Ltd. Vs. ICICI Bank 2. Radha Exports (India) (P) Ltd. Vs. K.P. Jayaram: (2020) 10 SCC 538 3. Pioneer Urban Land and Infrastructure Ltd. Vs. Union of India (2019) 8 SCC 416 Hence, it is respectfully prayed that this Hon'ble Adjudicating Authority may be pleased to admit the present application under Section 7 of IBC and initiate the corporate insolvency resolution process. ....
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....Court vide order dated 23.03.2018 passed in WP (C) No. 1716/2018 ordered status quo in regard to the ownership of the Tea Gardens and factory of Bochapathar Tea Estate Pvt. Ltd. (BITCO) and the said order is still in effect. Mr. Sunil Kumar Agarwalla was respondent No. 10 in W.P. (C) 1716/2018. A copy of the WP (C) 1716/2018 without annexure and a copy of the aforesaid order are attached collectively as Annexure F. (vi) The agreement dated 01.02.2017 between Bochapathar Tea Estate Pvt. Ltd. (BITCO) and Damayanti Tea Industries, on the basis of which this Petition has been filed and executed by Mr. Sunil Kumar Agarwallla on behalf of Damayanti Tea Industries. (vii) No amount is due and payable in respect of the alleged transactions pursuant to the aforesaid agreement dated 01.02.2017. (a) The purported claim in CP (IB) No. 05/2021 is based on an agreement dated 01.02.2017 between Damayanti and BTCO, a copy of which is enclosed as Annexure 'G'. It would appear from para 7 of the aforesaid agreement that it was agreed between Damayanti and BTCO that by the end of tea season, 2017, the accounts would be settled and whichever party is entitled to recei....
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....by BTCO to Damayanti has not been declared: As per para 6 of the terms and conditions mentioned in the aforesaid agreement dated 1st February, 2017 between Damayanti and BTCO, Damayanti was to declare the rates of tea on the basis of which price was to be determined. BTCO has never received any intimation or information about the rates or the price at which the tea supplied by BTCO could be or had been valued. Further, even in CP (IB) No. 05/2021 no document has been enclosed to indicate the rate at which green leaf has been valued or that what was the market rate for relevant batches of supply of green leaf. (c) Attachment of Tea Gardens by the Provident Fund Department: Due to Provident Fund default, the tea gardens of BTCO were attached by the Office of Recovery Officer, Assam Tea Employees Provident Fund Organization, Dibrugarh Zone (here in after referred as "Provident Fund Department", vide orders of attachment dated 13th December, 2017, copes whereof are collectively attached as Annexure 'H'. The Provident Fund Department appointed the aforesaid Mr. Sunil Kumar Agarwalla as "Receiver" to manage all the gardens of BTCO, vide the appointment letters dated 29th....
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.... from petitioner side for proportionate representation. Pursuant to the said direction Mr. Ranjan Mukherjee has been appointed as an Independent Director and Shanta Prasad Chakraborty has been appointed as a director. (g) Efforts of revival of BTCO by the changed management: After the appointment of Independent Director, there was a strong effort to revive BTCO and its financial position. However, since earlier management had given all control of BTCO to Mr. Sunil Kumar Agarwalla. The entire financial information is retained by Mr. Sunil Kumar Agarwalla and he is not sharing the financial information with the Board of Directors, despite repeated requests. Mr. Sunil Kumar Agarwalla has not prepared the Annual Accounts of BTCO. It would be pertinent to mention that due to non-sharing of financial information by Mr. Sunil Kumar Agarwalla, the present management is not able to prepare the accounts. Annual financial statements of BTCO have neither been prepared nor audited for the financial years ended 31/03/2018, 31/03/2019 and 31/03/2020. (h) False and misleading submission: (a) False claim regarding the amount of loan: The applicant in CP(IB) No. 05/2021 has repeate....
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....d 3rd October, 2017 to 18th January, 2018 amounting to an aggregate sum of Rs. 97,00,000 is outside the aforesaid agreement dated 1st February, 2017. The aforesaid sum of Rs. 97,00,000 cannot be considered as loan and has not time value of money in the absence of any agreement between BTCO and Damayanti. The said sum has been transferred to the bank account of BTCO without the consent or approval of BTCO or the Board of Directors of BTCO. Further, interest @ 16% per annum cannot be charged on the aforesaid sum of Rs. 97,00,000 as the same is not covered by the aforesaid agreement dated 1st February, 2017. It would also be pertinent to mention that as the entire control of all operations including financial operations of BTCO are with the aforesaid Mr. Sunil Kumar Agarwalla, we don't even know as to how much money has been paid to Damayanti or any other unit of Chandrabali Commercial (I) Pvt. Ltd. or to any other person. Further, there is no information available with BTCO or Board of Directors of BTCO as to what quantity of green tea leaves has been transferred from BTCO to Damayanti since 27th September, 2017, that is the due date on which the entire management and control wen....
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....ectives with which the IBC, 2016 has been enacted. In the facts and circumstances as narrated above CP (IB) No. 05/20-21 deserves to be dismissed with cost as non-maintainable and as such I pray for dismissal of CP (IB) No. 05/2021 with cost. (v) Each averment in CP (IB) No. 05/2021, unless expressly admitted and unless appear from the authentic record is denied and disputed as if the same has been specifically traversed, denied and disputed. (vi) For the facts and circumstances, as narrated above, CP (IB) No. 05/2021 is liable to be dismissed with cost and the applicant is liable to be and be punished pursuant to the provisions of Sections 65 and 75 of IBC, 2016. 16. In the Rejoinder dated 22.3.2021 on behalf of the Applicant/FC it has been submitted that the averments made in Para 6(b) are wholly wrong, misconceived, untenable and denied to its entirety, except to what is a matter of record, for the following reasons: i. The Power of Attorney executed by Mr. Sunil Kumar Aggarwal with the Corporate Debtor was in his own personal capacity whereas the agreement dated 01.02.2017 was executed between the Corporate Debtor and the Financial Creditor i.e. Da....
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....6.12.2017 were made in terms of then prevalent market rates which was not disputed by Corporate Debtor even once while making the said repayments. 31. It is submitted that the averments made in Para 9 are wrong, irrelevant and denied, except to what is a matter of record, as the default in payment of provident fund dues and default in payment of debt due by the Corporate Debtor are very distinct proceedings. It is further submitted that provident fund dues do not constitute to be an asset of the Corporate Debtor and hence, are irrelevant in the present case. The attachment of tea gardens by Assam Tea Employees Provident Fund Organization, Dibrugarh Zone do not provide immunity to Corporate Debtor from repayment of debt due. The default in payment of debt is the sole liability of Corporate Debtor and the same does not subside even if the tea gardens have been attached by the Provident Fund Department. 32. It is submitted that the averments made in Para 10 are wrong, misconceived and denied as the present application has been filed solely due to default of the Corporate Debtor in payment of due debt and no other reason. The Corporate Debtor has failed to provide any....
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.... not give the right to nonpayment of debt due to Financial Creditor. 35. It is submitted that the averments made in Para 13 are wrong, irrelevant and denied for want of knowledge. It is further submitted that the irrelevant averments of the Corporate Debtor are clearly not in line with the actions of the Corporate Debtor with respect to the default of debt and subject matter of present application. 36. It is submitted that the averments made in Para 14, except to what is a matter of record, are wrong and wholly denied for the following reasons: i. The total amount of financial assistance i.e. Rs. 3,34,30,000.00 was advanced to the Corporate Debtor has been duly calculated as per the terms of agreement dated 01.02.2017 and the same is evident from the Bank Statements annexed under Annexure-5 of the Application (Page 39 to 116) and the calculation of interest accrued upon financial assistance has been annexed under Annexure 6 of the Application [Page No. 117 to 158]. ii. The Corporate Debtor has not provided any evidence as to refute the calculation of debt by the Financial Creditor instead tried to misguide the Hon'ble Adjudicating Authority w....
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....s of the Corporate Debtor. ii. The averment made by the Corporate Debtor that the quantity of the green tea leaves has been suppressed by the Financial Creditor is of no consequence as it has been sufficiently shown by the Financial Creditor that an outstanding debt of Rs. 2,67,05,726.00 had become due and payable and the Corporate Debtor has defaulted in making payments towards the same. iii. The averment made by the Corporate Debtor that the rate of green tea leaves has been pre-determined at Rs. 20/kg as per Annexure II of the agreement dated 01.02.2017 [Page No. 37] is wholly wrong and misconceived. It is pertinent to note that Annexure II of the agreement provides for "Expected" quantities of green tea leaves to be supplied by the Corporate Debtor as repayments towards the loan advanced by the Financial Creditor. The term "expected" itself connotes that the quantity of green leaves was to be determined as per the prevalent market rates. The detailed market rate and dated at which repayments were made by the Corporate Debtor has been provided in Annexure R-1 of this rejoinder. Even if the above averment is taken to be true, the Corporate Debtor has still defau....
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....urther that the Corporate Debtor has acknowledged the debt due to the Financial Creditor under various annexures of the reply and this rejoinder in the present matter. 21. The Corporate Debtor has falsely mentioned that no rate of green tea leave was declared by the Financial Creditor and further stated that it does not know at what rates the repayments made prior to defaults were assessed by the Financial Creditor. The averments are plainly absurd and with no evidence to support the same. 22. The matter was taken up lastly on 22.02.2021, 23.03.2021, 19.04.2021 and 03.05.2021. ORDER 23. Heard both the sides at length, perused the documents, written submissions and affidavits of both the sides. In our considered view, this Application needs to be rejected on the following grounds: This Application has been filed on the strength of the execution of an agreement dated 01.02.2017 between Damayanti Tea Industries (a Unit of M/s. Chandrabali Commercial India Pvt. Ltd.), the party of the First Part and M/s. Bochapathar Tea Estate Pvt. Ltd., the party of the Second Part. As per this agreement, the Party of the First Part will pay a sum of Rs. 2,35,00,000/- (as per Anne....
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....o not there. The Applicant has submitted the Bank Statements of its own Bank Account maintained with the Axis Bank wherein it is shown the disbursement of the advance amount to the CD date-wise but payment received from the CD is not at all reflected in the said account. The only declaration given by the Applicant in the Application filed is that the CD has paid Rs. 1,83,72,105.80 (Rupees One crore Eighty Three lacs Seventy Two thousand One hundred Five and paise Eighty only). The other provision available in the said agreement is that the account of the Second Party-Respondent is in the hands of the First Party-Petitioner and the Petitioner itself has the authority to debit the Account of the CD, once the proceeds of the leaves sold is credited. Hence, everything right from generally fixing the rate per kg of green tea leaves till the debit of the account is retained with the Applicant. In addition to that, it is submitted by the Applicant that it has given further advance after September, 2017 when the CD is reportedly defaulting and the entire management of the CD was with Mr. Sunil Kumar Aggarwalla. It is not clear the purpose and intention of the Petitioner to give fu....
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....en tea leaves against the advance received. No rate of tea leaves per kg. is fixed at the time of agreement and it would be decided only in future. There is no derivative provision also. The Company giving advance generally declares the rate of green tea leaves to be supplied to it, based on market rate and credit the amount into the Respondent's account. Account of the Respondent is maintained by the Petitioner Company and it is also having authority to debit the account of the CD towards the advance made by it when the sale proceeds is credited in to the account of the Respondent. 25.2. The appropriate Authority may take cognizance of prevailing of this type of Agreement and take suitable measures so these type of Agreements with such terms and conditions are not in operations and the needy Tea Estates Companies availing advance from others for supply of Green Tea Leaves are prohibited from the Debt Trap, Exploitation, Imminent Closure, Hostile Takeover and Liquidation, When Advances/loans are available from the established Financial Institutions/Banks with transparent, fair terms & conditions, insurance coverage and reasonable/lower rate of interest to the Tea Estates/Tea....