TaxTMI 
TaxTMI 
2025 (3) TMI 128
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....) passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench-V) in CP (IB) No. 573/MB/2023. By the impugned order, the Adjudicating Authority has admitted the Section 9 application filed Jaldhi Overseas Pvt Ltd-Operational Creditor thereby admitting the Corporate Debtor-RR Metalmakers India Ltd. into Corporate Insolvency Resolution Process. Aggrieved by the impugned order, the present appeal has been preferred by the suspended Director of the Corporate Debtor. 2. The brief facts of the case which are necessary to be noticed for deciding this appeal are as follows : The Corporate Debtor-RR Metalmakers India Ltd. which was previously known as Shree Surgovind Tradelink Ltd. had approached Jaldhi Overseas Pvt Ltd., Operational Creditor for chartering of vessel MV Aetolia for carrying cargo from Port Redi to China for delivery to BST (HK) Ltd.- ("BST" in short) under a Charter Party Agreement dated 15.03.2017. The parties had appointed Bulk Chart as their broker. The Operational Creditor performed its obligations under charter party and raised an invoice dated 18.04.2017 for USD 653,312 towards freight payable. On 25.05.2017, the Operational Creditor raised....
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....Debtor. Aggrieved by the impugned order, the present appeal has been preferred by the Appellant-Corporate Debtor. 3. Making his submissions, the Ld. Sr. Counsel for the Appellant, Shri Abhijeet Sinha stated that the Corporate Debtor had chartered the vessel through Samruddha for export of cargo to BST with the vessel agent being Globe Chart Ltd. ("Globe Chart" in short). It was contended that the Appellant-Corporate Debtor had not executed any charter party agreement with the Operational Creditor. As the entire transaction was negotiated by Samruddha with the Corporate Debtor, BST and Globe Chart, hence payments had been made by the Appellant to Samruddha/BST or to any entity under instructions of Samruddha. It was contended that the entire amount which was due towards freight had been paid by the Corporate Debtor and no operational debt was due and payable to the Respondent No. 1. Much emphasis was laid on the fact that the Operational Creditor did not send any correspondence to the Corporate Debtor between the date of invoice of 18.04.2017 till 25.02.2020 when the Section 8 Demand Notice was issued to demonstrate that they had ever seriously pursued or chased up for payment of....
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....s placed on record shows that the same was signed between the authorized signatory of the Corporate Debtor and Operational Creditor with Bulk Chart as the broker. It is the contention of the Operational Creditor that for the cargo shipped, the total invoice value of the Operational Creditor was USD 653,312 against Freight Invoice dated 18.04.2017. The Corporate Debtor had made part payment of USD 350,000 on 04.08.2017 and a balance of USD 303,312 was still outstanding and payable by the Corporate Debtor. This shows that the Corporate Debtor had been paying to the Operational Creditor directly to clear their dues. Furthermore, the Corporate Debtor had admitted their debt in their reply dated 09.03.2020 to the Section 8 Demand Notice served by the Operational Creditor. It was also pointed out that the Corporate Debtor had been taking inconsistent stands from time to time with respect to payments made in respect of the charter party. It was vehemently contended that the alleged involvement of Samruddha, BST, and Globe Chart in the transaction are irrelevant since the Charter Party Agreement was between the Corporate Debtor and Operational Creditor with no role of third parties. It was....
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....e this Tribunal to buttress their contention that the Operational Creditor had received freight payments from third party-BST, the Ld. Sr. Counsel for the Respondent strongly opposed these documents for having been placed for the first time at the appeal stage before this Tribunal when these had not been placed for consideration of the Adjudicating Authority. It was asserted that even the grounds stated by the Appellant to explain the reasons for not being able to place these documents before the Adjudicating Authority earlier were flimsy and frivolous. It was also added that the Operational Creditor had already registered an FIR disputing the authenticity of these documents placed by the Corporate Debtor. 8. We have duly considered the arguments advanced by the Learned Counsel for both the parties and perused the records carefully. 9. The short point for our consideration is whether there is any infirmity in the impugned order passed by the Adjudicating Authority in allowing the Section 9 application on the ground that operational debt which was due and payable stood established by the Operational Creditor and that a default had been committed by the Corporate Debtor in respect ....
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....n a period of the self-same 10 days sent and 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 an operational creditor has encashed a cheque or otherwise received payment from the corporate debt [Section 8(2) (b)]. 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 trigger the insolvency process by filing an application before the adjudicating authority under Sections 9(1) and 9(2)......... ****** ***** ***** 51. It is clear, therefore, that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application under Section 9(5)(2)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the "existence" of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is p....
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....Adjudicating Authoritythe arrangement that existed between them with Samruddha, BST and Globe Chart. Even when payment of USD 350,000 was made by the Corporate Debtor to the Operational Creditor, this was done not by the Corporate Debtor on its own but because of directions from Samruddha. It is further the case of the Appellant-Corporate Debtor that against the freight invoice dated 18.04.2017 for USD 653,312 raised by the Operational Creditor, they have placed on record the proof of payment of the entire amount before the Adjudicating Authority. Hence, there was nothing which was due and payable by them to the Operational Creditor. Only when the Operational Creditor was faced with some issues relating to payment in respect of transaction with Samruddha, that they foisted their claim on the Corporate Debtor by sending a Section 8 Demand Notice. The Adjudicating Authority erroneously did not consider the proofs of payment filed before it. Instead, it wrongly viewed the reply of the Corporate Debtor dated 09.03.2020 to the Section 8 notice as admission of their liability. 15. Per contra, it is the contention of the Respondent-Operational Creditor that the total invoice value of the....
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....laced at page 225 of APB. As regards payment of USD 1,36,298.41 of 24.06.2019, when we look at the page 230 of APB, we find that the debit note indicates that it was issued by Samruddha to the Corporate Debtor for payment of said amount to the Operational Creditor by them. It is contended by the Operational Creditor that when Charter Party Agreement was between Operational Creditor and Corporate Debtor, it is the Corporate Debtor who had the obligation for payment of freight, demurrage and detention. In the absence of any communication from the Corporate Debtor to Operational Creditor informing them about assignment of freight payment to BST, no such assignment can be accepted. To the contrary, it is the contention of the Corporate Debtor that the Operational Creditor had supressed critical information about their business relationship with Samruddha besides the involvement of other parties like BST and Globe Chart in the transaction. Prima-facie, the rival contentions made by both parties clearly manifests existence of dispute which is of such nature that the same needs to be investigated by a proper forum and that it was beyond the remit and scope of Adjudicating Authority to enq....
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....ines. We have to remit foreign exchange as per Indian guidelines. After receiving all papers as per guidelines. We will arrange meeting & talk on point to be discuss & try to resolve the issue. For RR METALMAKERS INDIA LTD. (Emphasis placed) 19. In response, the Operational Creditor sent an e-mail to the Corporate Debtor in which letter the admission of debt liability towards freight and demurrage by the Corporate Debtor was emphasised and time was given to the Corporate Debtor to make payment by 27.03.2020. This letter was replied to by the Corporate Debtor on 19.03.2020 informing that their office was closed due to Covid-19 and that the issue of payment would be taken up on re-opening of office. The Operational Creditor thereafter sent a legal notice on 11.10.2022 to the Corporate Debtor which was replied to on 17.10.2022 by the Corporate Debtor which is as extracted below: To, Date: 17/10/2022 Mr. Ashwin Shanker Advocate & Arbitrator, Sub: Reply against E-Mail Dated: 11/10/2022 Dear Sir, We have received your E-Mail Dated: 11/10/2022 & we want to reply you but delay has been taken place due to our record with ED (Enforcement Directorate) & we have apply for you&....
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..... As per the discussion with department, we have given you the clear picture which we are facing. Samruddha Resources Ltd have executed so many documents in the export business and some of the documents have executed which is not as per law and against which we are facing the difficulties. The vessel owner blindly follow Samruddha Resources Ltd instruction and not practically executed the documents as per the compliances. So the difficulties are very big for us to settle so give us some documents which is available with you so we can verify the fact. As on today, your outstanding which you have mentioned is not in our record so we have to talk with Samruddha Resources Ltd & take the record which was handled by Samruddha Resources Ltd so we perfectly understood what the right and wrong commitment carried out by whom. Matter will resolve with the help of Sarmuddha Resources Ltd. For RR Metalmakers India Ltd. ( Emphasis placed ) 21. From a plain reading of the above communications, it cannot be construed in any manner that there was a categorical admission of debt and default by the Corporate Debtor. The first letter of 09.03.2020 clearly states that freight is payable subjec....
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....K) LTD ("BST") and the Vessel Agent was Globe Chart Ltd ("Globe Chart"). 4. After receiving your mail regarding the alleged claim, we have collected some data from our bank as well as Globe Chart. We understand that you have received the payment in respect of the alleged claim from Globe Chart for US$145388 on 03/08/2017. 5. In relation to the same Samruddha have confirmed that Bothra Shipping Services Pvt. Ltd ("Bothra") have paid US$107604.01 & US$28694.40 to you. Apart from the above we have remitted US$3,50,000 ondated: 03/08/2017 to you and you have given us credit for US$ 21625.31, dated:18/04/2017 against their bills. 6. In the circumstances aforesaid nothing is due and payable by us to you in relation to your alleged time barred claim. We state that the alleged claim contained in the Demand Notice is frivolous claim and the same is being foisted on the company despite knowing that the fact that in the entire transaction several parties were involved. Admittedly, the entire transaction was facilitated by Globe Chart. However, the Demand Notice does not contain a single reference to the same and this shows your dishonesty and falsity. 7. You have suppressed the materi....
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....es regarding the operational debt in terms of the statutory construct of the IBC. In the present case too, the freight charges having not been admitted by the Corporate Debtor, it is not a case wherein debt and default has been unequivocally established which is essential for entertaining a Section 9 application. 24. This brings us to the issue of demurrages. It is the contention of the Corporate Debtor that the Operational Creditor was not able to show service of debit note upon the Corporate Debtor of USD 242,772.19 dated 27.12.2017 towards demurrage. On the timing of the Debit Note, it was pointed out that while the freight invoice of the Operational Creditor was dated 18.04.2017, the debit note was dated 27.12.2017 without any explanation as to why the debit note was raised eight months after the date of invoice. It was also asserted at length by the Ld. Sr. Counsel for the Appellant that demurrage cannot be treated as liability as it did not fall in the category of operational debt under Section 5(21) of IBC. Moreover, in the present case, demurrage had not crystallised between the Corporate Debtor and the Operational Creditor and was in the form of unliquidated damages. Unle....
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....confirmed after arranging a meeting with the Operational Creditor. 27. When we carefully look at the communication dated 09.03.2020 sent by the Corporate Debtor to the Operational Creditor, we find that the Corporate Debtor did not confirm the claim of Demurrage charges of USD 242,772.19. This is amply borne out from a plain reading of the communication of 09.03.2020 wherein it has been submitted as follows: "We and Broker have not confirmed the demurrage. In this regard, please arrange meeting & settle the issue...." 28. From the above statement it is clear that the Corporate Debtor had not admitted the liability to pay demurrages. It is therefore, clear that payment on account of demurrage was disputed by the Corporate Debtor. Under such circumstances, we are not inclined to agree that there was any admission of liability on the part of the Corporate Debtor on payment of demurrage and hence this defence taken by the Corporate Debtor cannot be disregarded as vexatious or feeble in nature. In the present factual matrix, the defence raised by the Corporate Debtor therefore cannot be held to be moonshine, spurious, hypothetical or illusory. 29. We also find that the Corporate De....
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....saction was negotiated by you with Samruddha and BST and we were not in concerned with the same. 10. The Demand Notice is premeditated with a view to now foist the purported claim on the company. The company is not going into the specifics and details of your dubious claims under the Demand Notice as the same is time barred. We reserve our rights to place the aforesaid facts and documents in support thereof before the Hon'ble NCLT in the event of you proceeding against the company. 11. We once again dispute and denies that the company is liable for the alleged claim under the Demand Notice. The company has responded to the Demand Notice in the past also and there is pre-existing dispute between the parties. Admittedly, from the correspondence exchanged between the parties, it is evident that there is pre-existing dispute between the parties and the Demand Notice is devoid of merits." 30. From the above set of correspondences exchanged between the parties, it is clear that the Corporate Debtor had not agreed to the debt and wanted to discuss the matter to settle the issue. In the best-case scenario, the Corporate Debtor had only tentatively agreed to look into the matter of....