TaxTMI 
TaxTMI 
TaxTMI 
2017 (12) TMI 1844
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...., on demand, the Respondent- 'M/s. Sree Ramakrishna Alloys Limited' issued three cheques which have been bounced, three Criminal Complaints under Section 138 of the Negotiable Instrument Act, 1881 has been instituted against the said Respondent being Criminal Complaint No. 40156/2016, Criminal Complaint No. 18535/2016 and Criminal Complaint No. 18399/2017 pending in Patiala House Courts, New Delhi. 4. According to Appellant, the Respondent(s)- 'M/s. Sree Ramakrishna Alloys Limited' has also sold the goods pledged by the Appellant and has misappropriated the sale proceeds of the stock of pledged goods for which Criminal Complaints have also lodged by filing FIR before Station House Officer (SHO), Parawada Police Station, Visakhapatnam-CII. 5. The Appellant- 'M/s. PEC Ltd' filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "I & B Code") for initiation of 'Corporate Insolvency Resolution Process' against 'M/s. Sree Ramakrishna Alloys Limited'. The said application on notice has been admitted by impugned order dated 29th August, 2017, order of moratorium has been passed and 'Interim ....
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....Adjudicating Authority at the instance of the 'Corporate Debtor', treated the application as an application under Section 9 and by impugned order dated 29th August, 2017, admitted the application, passed order of moratorium and appointed 'Interim Resolution Professional'. 9. We have heard learned counsel for the Appellant(s) and learned counsel appearing on behalf of the Respondent(s). 10. From the record of both the appeals, we find that the agreement reached between the Appellant-'M/s. PEC Ltd.' and respective Respondent(s) are verbatim similar. For the said reason, we are referring one of the agreement, language of both the agreements being same, except the name of one of the party. 11. From relevant fact as pleaded we find that 'M/s. Sree Ramakrishna Alloys Limited' ('Corporate Debtor') by their letter dated 19th February, 2014 intimated the Appellant- 'M/s. PEC Ltd.' that the said Respondent has proposed to procure 'M.S. Billets' as per the policies of the Appellant. So, the Appellant was requested to approve and grant clearance for the purchase of 'M.S. Billets' through ILC for Rs. 4,99,97,493/- (Rupees Four C....
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....sal for domestic purchase. With Best Regards Thanking you, Yours faithfully, For SREE RAMAKRISHNA ALLOYS LIMITED Sd/- (S. RAMAKRISHNA) Managing Director" 12. It was followed by an agreement reached between the Appellant-M/s. PEC Ltd. and Respondent- 'M/s. Sree Ramakrishna Alloys Limited' on 24th February, 2014. Relevant portion of the said agreement reads as follows:- "NOW IT IS AGREED BY AND BETWEEN THE PARTIES AS UNDER:- SRAL is desirous of purchase approx. LC1292.000 MTS (+/- 2%) MS Billets @ Rs. 36,855/- PMT + 5% Taxes. (Total value to Rs. 4,99,97,493/- (+/- 2%). The material shall be delivered and stored in open space earmarked for PEC and duly fenced at SRAL's Yard Paravada, Visakhapatnam. In order to procure raw material and to fulfill their obligations under their supply contracts with different buyers of the finished goods, SRAL has requested PEC for financial assistance to....
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....at the point of loading as well as at the point of unloading. Immediately after delivery of material by supplier, SRAL will intimate PEC and it's surveyor with a copy of the invoices/DC and will immediately pledge the Material in favour of PEC and will store the Material in PEC's warehouse/Plant Premises of SRAL to the satisfaction of PEC. 10. SRAL has agreed to pledge the Material in favour of PEC and store them in Warehouse/plant premises to the satisfaction of PEC at the cost and risk of SRAL. It will be a first charge and SRAL will not put any further charge with any other person/party. For this, SRAL shall sign an Agreement of Pledge, which shall form an integral and inseparable part of this Agreement. 11. SRAL shall earmark area in their plant premises for PEC to store the pledged material/goods. The area so earmarked shall be properly fenced and shall have the facility of electricity/water and sitting arrangement for PEC's security at the cost of SRAL. Shall also reimburse to PEC electricity, water and/or any other charges for th....
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....s clause." 14. From the letter referred to above and the agreement, we find that the Appellant-M/s. PEC Ltd. has disbursed the amount to 'M/s. Sree Ramakrishna Alloys Limited' against the consideration for the time value of money. It is also clear that M/s. Sree Ramakrishna Alloys Limited by the agreement dated 24th February, 2014 has borrowed money from the Appellant-M/s. PEC Limited against the payment of interest. Thus, the Appellant-M/s. PEC Ltd. come within the meaning of 'Financial Creditor' and is eligible to file an application under Section 7 of the 'I & B Code' there being a debt and default on the part of the Respondent. 15. In so far as the other Respondent-'M/s. Sri Gangadhara Steels Limited' is concerned, similar proposal for procurement M.S. Billets as per the policies of the Appellant-'M/s. PEC Ltd.' was made by letter dated 3rd May, 2014. The language of letter dated 3rd May, 2014 is same and similar to the language used by 'M/s. Sree Ramakrishna Alloys Limited' dated 19th February, 2014. 16. It is stated that both the Respondents belong to same group of Directors, and have same business. 17. In the agreement reac....