TaxTMI 
TaxTMI 
2022 (5) TMI 755
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....ditor is a private limited company, incorporated under the provisions of Companies Act, 2013, duly registered with Registrar of Companies, Telangana State with CIN U51909TG2018FTC123518 and having registered office at 3rd Floor, Megana Towers, Ayyappa Society Road, Madhapur, Hyderabad, Telangana State. The applicant company is in the business of supplying paper products to customers and distributors in India. 3. The corporate debtor is a company limited by shares, incorporated under the provisions of Companies Act, 1956 on 20.12.2012, duly registered with Registrar of Companies, Ahmedabad, Gujarat State with CIN: L51396GJ2012PLC073061 and having registered office at 505-508, 10/11, Beside Mardia Plaza, C.G. Road, Ahmedabad, Gujarat State. Authorised share capital of the corporate debtor is Rs. 65,00,00,000/- and paid up share capital of the company is Rs. 61,20,00,000/-. 4. It is submitted by the applicant that in the mid 2018 the corporate debtor approached the applicant for paper supply and distribution in India. After taking into consideration the undertakings, representations and warranties provided by the corporate debtor, a non-exclusive distribution agreement dated 01.....
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....gations of the corporate debtor with respect to the supply of products made by the applicant have been clearly defined and laid down in detail, in the Distribution Agreement as well as the HSS agreements. 7. According to the applicant, the details of shipments and amounts paid by the corporate debtor are as follows: SI No Number of shipments Amount Paid 1 14 Shipments ( Lot 1) 10 advance payment as stipulated in each pro forma order and failure to pay 90% remaining amounts 2 1 Shipments ( three containers ) Lot 2 100% amounts paid with delay 3 2 Shipments (Lot 3) 100% amounts paid with delay Total 17 shipments 8. Pursuant to the relevant sales confirmations, the products were imported and duly delivered at the destination ports of Mundra and Nhava Sheva on various dates from October 2019 to January 2020. Only 10% of the invoice value were received by the applicant as advance towards the invoices raised for the shipments, instead of the full value of the invoices, as agreed upon. The corporate debtor failed to make payments on due dates as mentioned in the invoices raised by the operational creditor. Despite multiple r....
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....s duties, clearing charges, demurrage, IHC, IGST etc. are payable directly to the customs and clearing and forwarding agencies (clause 4 of each HSS agreement); 11. Being aggrieved by the failure to perform the terms of contract by the corporate debtor, the applicant was compelled to locate another third party buyer viz. Hero Multi-Pap Private Limited (Hero MPPL) to purchase the products of the applicant for lot-1 shipments which were already available at CFS, Mundra and Nhava Sheva Ports, and sold the goods at a lesser value, thereby causing the applicant to incur reputational loss in the market and financial loss arising from the demurrage/detention costs. 12. The applicant filed application under Section 9 of the IB Code. As per Part IV Form 5 an amount of Rs. 5,58,81,454.73 (Rupees five crores fifty-eight lacs eighty-one thousand four hundred fifty-four and paise seventy-three only), is due and payable to the applicant by the corporate debtor. 13. Corporate Debtor filed affidavit in reply inter alia stating that: * The applicant and corporate debtor conducted business amounting to Rs. 106 crores and the amount payable towards the applicant has been settled til....
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....e made by Hero MPPL, the applicant issued requisite documents; * Clearance process was the responsibility of Hero MPPL. Bills of lading was printed and finalised at the time of shipment of goods in the foreign country, but, before the clearance and taking delivery of goods, shipments were sold to Hero MPPL, therefore, remaining process of clearance would have been completed by Hero MPPL; * The applicant withheld the undisputed amount of Rs. 19,96,855/- (10% of the total amount of consideration) paid as advance; * The applicant on its own had decided to sell the materials to Hero MPPL; * The averments made by the applicant with regard to the deal with Hero MPPL are contradictory; * The amount claimed by the applicant purports to be in respect of demurrage charges, estimated demurrage charges, interest and legal cost and not in respect of provisions of goods or services, therefore, the applicant does not fall under the definition of operational debt; 14. The applicant filed rejoinder inter alia stating that: * The diversion/selling of products to a third party buyer i.e. Hero MPPL has been done for the sole reason that the corp....
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.... by the applicant; * The claim does not fall under the definition of operational debt under Section 5(21) of the Code, 2016; * It is evident that there exists a pre-existing dispute which requires detailed adjudication; * The application filed by the applicant is in contravention of Section 10A of the Code, 2016; * No invoice pertaining to cost incurred in payment of detention and demurrage charges of lot - 2 and lot-3 shipments and no proof of amount set off from auction of lot - 2 and lot - 3 shipments; * There is no agreement with respect to payment of interest; * The claim is not crystalised. Insufficient proof evidencing the claim; 16. The registered office of the corporate debtor is situated in Ahmedabad, Gujarat State and, therefore, this Tribunal has jurisdiction to entertain and try this application. 17. As per part IV, form 5 date of default occurred on different dates starting from 14.11.2019 to 28.11.2019, prior to March, 2020 as per the table annexed to the application and the application is filed on 12.02.2021. Therefore, the application is within limitation and not barred by law. 18. Heard submissions and....