TaxTMI 
TaxTMI 
2026 (1) TMI 1355
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.... 2. The Appellant submitted that the Respondent, through its Director Mr. Ramakant Pilani, approached the Appellant in 2004 for grant of export facilities for industrial lubricants to foreign buyers in Latin America, Europe, North America, Middle East, and South East Asian countries, leading to discussions and meetings, culminating in the Respondent's letters dated 28.02.2004, 06.07.2004, 14.04.2005, and 17.06.2005 requesting processing, sanction, and exposure limits up to Rs. 4,00,00,000/- for export bills as per specified terms. 3. The Appellant submitted that, following the Respondent's letter dated 07.10.2005 confirming procurement of various export orders and market availability, the Appellant accepted the proposal vide letter No. STC/GBL/2005 dated 21.10.2005, which the Respondent acknowledged vide letter dated 18.11.2005, leading to execution of an Agreement dated 06.02.2006 extending the benefit of post-shipment credit facility (CLIS) from Exim Bank to the Respondent. 4. The Appellant stated that Mr. Ramakant Pilani executed an unconditional and irrevocable personal guarantee dated 02.02.2006, notarized on the same date, guaranteeing payment to the Appellant....
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....ol T-100 in favour of Raj Petro Speciality Pvt. Ltd., with interest-free earnest money deposit and purchase order dated 20.06.2007; Appellant instructed Bank of India to open LC No. 00571LCDA070119 dated 22.06.2007 for Rs. 34,90,906/- (with +/-5% tolerance) at 60 days from invoice; (ii) Respondent's acknowledgement of receipt vide letter dated 09.07.2007, forwarding original lorry receipts to Mr. Bendre, Chief Manager Finance; (iii) further request dated 24.07.2007 for LC for 115 MT Toluene in favour of RIL, with earnest money and purchase order dated 10.07.2007; and (iv) request dated 24.09.2007 for LC for 80 KLS JNK process oil 485 in favour of M/s Jeyenkay Petrogels, with earnest money and purchase order dated 20.09.2007. 12. The Appellant submitted that apart from these, the Respondent placed purchase orders for materials procured from the Indian market under various agreements; however, a cheque dated 17.08.2010 for Rs. 1,55,00,000/- from HDFC Bank was dishonoured upon presentation to SBI, leading to proceedings under Section 138 of the NI Act without compliance despite statutory notice; additionally, post-dated cheques issued towards liability for procurement and suppl....
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....sent adherence to the sanctioned scheme, the Adjudicating Authority erred in directing belated payment of 25% principal instead of mandating CIRP under the Code. 19. Concluding his arguments, the Appellant requested this Appellate Tribunal to set aside the Impugned Order and allow the present appeal. 20. Per contra, the Respondent denied all averments made by the Appellant as misleading and baseless. 21. The Respondent submitted that it filed preliminary objections on 05.10.2021 to the appeal's maintainability, including on limitation grounds, leading to dismissal by this Appellate Tribunal on 20.04.2023. The Respondent contended that the Supreme Court order dated 02.04.2025 restored the appeal for merits hearing, prompting supplementary objections on 08.07.2025, which the Appellant failed to rebut despite directions. 22. The Respondent submitted that Appellant itself prayed for 25% principal payment in its Adjudicating Authority rejoinder, which the Adjudicating Authority recorded in para 5 of the impugned order and enforced as reasonable under the BIFR scheme. The Respondent contended no "person aggrieved" exists under Section 61 of the Code, as rights were enforc....
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....1 via demand notice (20.03.2018) barring Option 2; and thereby, the Appellant is entitled only to lump-sum 25% paid sans crystallization/pre-interest and now can't claim option B. 27. The Respondent submitted that the Appellant accepted payment per impugned order invoking estoppel by election per Cauvery Coffee Traders v. Horner Resources and Cannot approbate (accept benefit) and reprobate (challenge order). The Respondent assailed conduct of the Appellant for such belated protest (20.03.2020 post-payment) and 18-month delayed appeal reflecting mala fides, blowing hot and cold acts which are impermissible. 28. The Respondent denied export liabilities (06.02.2006 agreement): as the Appellant failed to furnish buyer guarantees (Technocraft) for New India Assurance credit insurance (premium paid by Respondent), causing its own loss; disputed via 31.03.2018 reply. The Respondent stated that for Domestic trade (19.01.2004 tripartite): Clause 12 vested disposal authority in Appellant (CWC godown), not Respondent and therefore; losses were caused due to the Appellant's inaction. The Appellant denied liability of C-Forms. 29. Concluding, all his arguments, the Respondent reque....
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....03.2011 in BIFR sanctioned order) has gone to the Hon'ble Supreme Court of India in SLP No. 12096 of 2016, arising out of Impugned Judgement dated 04.12.2015 in WP (C) No. 9320 of 2015 passed by the Hon'ble Delhi High Court. The Hon'ble Supreme Court of India vide its order dated 10.04.2018 heard the parties and refused to interfere in the impugned judgement and therefore, SLP was rejected by the Apex Court. 40. We further take into consideration Note No. 34 i.e., contingent liability and legal cases attached to the notes to financial statements for the period ended on 31.03.218 of the Corporate Debtor, where the claims of the Appellant in respect of export bill were treated by the Corporate Debtor as contingent claims and the Corporate Debtor reflected such claims of the Appellant at Rs. 24.98 Crores as on 31.03.2018. 41. We note that the Writ Petition (C) No. 9320/ 2015 was filed by the Corporate Debtor before the Hon'ble Delhi High Court, seeking direction under Article 226 and 227 of the Constitution for seeking of sanction BIFR scheme as contained in case no. 42 of 2009, which was under consideration of BIFR. We note that the Corporate Debtor contended before the Hon'ble....
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....per BIFR scheme during such phase, the Appellant was not entitled to raise its objections. 46. The main bone of contention between the Appellant and the Respondent is w.r.t. to treatment of dues of the Appellant. We note that as per the sanctioned BIFR scheme, the Unsecured Creditor had two options which are reproduced as under :- Option No. 1: The unsecured creditors would be paid 25% of the principal amount due in five equal annual instalments. Option No. 2: The unsecured creditors would not accept the scaled down value of their dues and wait till the scheme of rehabilitation of the company has worked itself out / seven years 47. In this connection, we would like to reproduce the exact provisions of the sanctioned BIFR order dated 04.02.2025 as contained in Para 11.11 which reads as under :- "The unsecured creditors would be paid at 25% of the principal dues in five equal annual installment with an option not to accept the scaled down value of their dues and wait till the scheme of rehabilitation of the company has worked itself out/Seven years. M/s Pennar Paterson also will be treated at par with other unsecured creditors. Unsecured creditors als....
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....should have been paid by 04.12.2020, whereas the payment was made to him after the passing of the Impugned Order dated 13.02.2020. 55. We note that the Appellant's argument is that BIFR order failed w.r.t. his payments as he was not paid on the basis of five equally annual instalments as per clause 11.11 of the BIFR sanctioned scheme dated 04.12.2015. As such, he cannot be compelled to accept the same. When he filed his petition u/s 9 of the code and the Adjudicating Authority has no jurisdiction to order the Appellant to accept BIFR payment as such belated time. The Appellant argued that the Adjudicating Authority is not empowered the equity jurisdiction. The Adjudicating Authority is only to determine existence of debt, default, absence of existence of pre-existing dispute and should have admitted the petition of the Appellant under section 9 of the Code. 56. At this stage, we would like to examine the rational used by the Adjudicating Authority while passing such directions. 57. The rational of the Adjudicating Authority is practically contained in para 8 to 10 of the impugned order which reads as under :- "8. Ongoing through the letter cited above, this Bench ....
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....debt and default and no pre-existing dispute were confirmed then the Adjudicating Authority ought to have admitted Section 9 petition of the Appellant. 60. Forthwith, on the treatment of Appellant as contingent liability in the books of Corporate Debtor, we put a direct and pointed query to the Respondent as to how and under what circumstances the dues payable towards Appellant was shown under contingent. The Respondent merely answered that the same is reflected in the financial statement. The Respondent could not satisfy us as how the claims of the Appellant was contingent liability. 61. We would like to indicate that the Respondent also argued that the debt itself was not payable. If the argument of the Respondent is to be accepted, we wonder how the Adjudicating Authority could have directed the Respondent to make a payment of Rs. 2,18,88,421/- which could have been ordered only when debt was payable. 62. One of the another arguments of the Respondent before us was that since debt of the Appellant was contingent, the same was required to be crystallised before debt could have become due and such crystallisation could have been done by competent court of law. The Respond....