Allowed

In the matter of Baid Narrow Fab Private Ltd. C.P. (Ib) No. 178-NCLT-AHM-2019

NCLT9 Dec 2019

Case brief

AI extract

What is this about?

The NCLT admitted an application under Section 9 of the Insolvency and Bankruptcy Code filed by an operational creditor against a corporate debtor for default in payment of alleged dues. Finding no dispute raised by the respondent who did not appear, the tribunal declared a moratorium under Section 14 and appointed an Interim Resolution Professional to initiate the corporate insolvency resolution

What did the court decide?

Admitted the application under Section 9; declared moratorium under Section 14; appointed Shri Sunil Kumar Agarwal as Interim Resolution Professional under Section 13.

In the matter of Baid Narrow Fab Private Ltd. C.P. (Ib)… — Insolvency and Bankruptcy | NCLT (2019)

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BEFORE THE ADJUDICATING AUTHORITY NATIONAL COMPANY LAW TRIBUNAL Free of CostCopy AHMEDABAD BENCH AHMEDABAD

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C.P. (l.B) No. 178/NCLT/AHM/2019

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Coram: HON'BLE Ms. MANORAMA KUMARI, MEMBER JUDICIAL

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ATTENDANCE-CUM-ORDER SHEET OF THE HEARING OF AHMEDABAD BENCH OF THE NATIONAL COMPANY LAW TRIBUNAL ON 09.12.2019

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Name of the Company: Strawing Plastics & Chemicals Pvt Ltd Vis

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Baid Narrow Fab Pvt Ltd

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Section of the Companies Act: Section 9 of the Insolvency and Bankruptcy Code

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S.NO. NAME (CAPITAL LETTERS) DESIGNATION REPRESENTATION SIGNATURE

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ORDER

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The Petitioner is represented through learned counsel

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The Order is pronounced in the open court vide separate sheet.

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,.... . .ed this the 9th day of December, 2019. , .. PC

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~ MANORAMA KUMARI (MEMBER JUDICIAL)

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CP (lBj178/9/NCLT/AFlM/2D18 .',

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BEFORE ADJUDICATING AUTHORITY (NCLT) AHMEDABAD BENCH AHMEDABAD

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C.P. No. (18) 178/9/NCLT/AHM12018

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In the matter of:

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MIs. Starwing Plastics 8t Chemicals Private Limited 501 Kaatyayni Business Centre Off Mahakali Caves Road I,J MIDC

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Nr. Marol Bus Depot Andheri (East) MUMBAI 400 093

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Petitioner Operational Creditor

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Versus

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MIs. Baid Narrow Fab Private Ltd. 2/4569, Sangrapura Main Road Dipaka Apartment Ground Floor SURAT 395 002 Gujarat State

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Respondent Corporate Debtor

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Order delivered on gth December, 2019..

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i' Coram: Hon'ble Ms. Manorama Kumari. Member (J)

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Appearance:

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Advocate Mr. Ishan Shah for respondent PCS Mr. Amrlsh Gandhi for operational creditor

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ORDER

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Mr. Praful Domadia, on behalf of the operational creditor Mis. Starwing Plastics & Chemicals Private Limited filed this Petition under Section 9 of The Insolvency and Bankruptcy Code, 2016 [hereinafter referred to as "the Code lT] read with Rule 6 of The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 [hereinafter referred to as "the Rules"] .

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Pagell12

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CP (IB) 17819/NClT/AHM/2018 .

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The applicant/operational creditor is a registered private limited company having identification No. U25203MH2013PTC244446 and having registered office at I"'IDC, Nr. Maral Bus Depot, Andheri (E), Mumbai 400 093 engaged in import and distribution of plastic and chemicals i.e. additives.. The applicant is also in the business of

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. distribution and supply of polymers, chemicals and polyester· . raw material products.

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The respondent corporate debtor is a private limited company registered on 28.10.1996 having registration No. U17110GJ1996PTC031008 having its registered office at Sangrapura Main Road, Suratl Gujarat state. Authorised share capital of the respondent company is Rs. 85,00,000/ and paid up share capital is Rs. 71,00,000/-.

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It Is submitted by the applicant that sometime in the month of December, 2014, M/s. Bald Industries Pvt. Ltd. approached the applicant requesting for supply of PET and polyester super bright chips. That, pursuant to the request/purchase orders, the applicant sold and supplied goods to M/s. Bald Industries Pvt. Ltd. from time to time and M/s. 8aid Industries Pvt. Ltd. utlllsed the goods without any complaint regarding quality/quantity.

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It is further submitted by the applicant that, in the beginning, M/s. Baid Industries Pvt Ltd. made certain

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~ P age 2112

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. CP (IB) 178/9/NCLT/AHM/2018 q

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payments to the applicant for the goods received, though belatedly. The last payment of Rs. 6,00,000/- was made by M/s. Baid Industries Pvt. Ltd. on 13.02.2017 towards outstanding of Rs. 4,54,807/-due as per applicant's invoice No. 000057/15-16 dated 17.08.2015 for a sum of Rs. 15,02,530/- and surplus of Rs. 1,45,193/- received from Mis. Baid Industries Pvt. Ltd. was adjusted towards invoice dated 18.08.2015 thereby leaving outstanding balance of Rs. 13,57,337/- due to the applicant.

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It is submitted by the applicant that M/s. Baid Industries Pvt. Ltd. time and again failed/neglected to make payments towards the invoices raised by the applicant, thereby leaving outstanding of Rs. 1,91,40,826/-. That, despite repeated follow-up, reminders, IVI/s. Baid Industries Pvt. Ltd. failed/neglected to pay the applicant, the outstanding amount of Rs. 1,91,40,826/-.

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It is submitted by the applicant that, through its advocate, issued notice dated 24.02.2017 ca'lIing upon the respondent to pay the outstanding amount along with interest thereon @ 21% p.a. from the respective due dates till payment. That, instead of making payment, M/s. Baid Industries Pvt. Ltd. through reply dated 21.03.2017 falsely disputed the claim raised by the applicant contending that the goods supplied were defective .

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. "'.\ ,.

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. CP (18) 178/9/NCU/AHM/2018

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It is,submitted by the applicant that, through advocate, vide letter dated 19.04.2017, the applicant had denied all the

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. contentions raised ·by the respondentand putting the correct . facts on record. That/ applicant's reply came to be returned by postal authorities with remark "incomplete address".

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It is submitted by the applicant that fresh notice dated 14.09.2017/ through advocate, was issued to the respondent at its registered office address which was duly received by Mis. Baid Industries Pvt. Ltd., but, the same was neither complied with nor replied to.

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It is SUbmitted by t e applicant that, through its advocate, once again issued fr sh notice dated 02.11.2017 enclosing therewith a resoluti n passed by the applicant authorising Its advocate to Issue demand notice at the registered office of Mis. Bald Industri s Pvt. Ltd. under the provisions of the I

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Code. Though the totice was duly receive~ by Mis. Baid Industries Pvt. Ltd., 't was not complied with. .

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It is submitted y the applicant that under such circumstances the applicant was constrained to file application under 51tion 9 of the I & B Code against Mis. Baid Industries pvt. Ltd. being CP (IB) No. I 2/9/NCLT/AHM/2018 before this Tribunal.

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P age 4112

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CP (IB) 178/9/NCLT/AHM/20i8

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The applicant had also filed Commercial Civil Suit No. 27/2018 being Commercial Civil Suit No. 27/2018 against M/s. Baid Industries Pvt. Ltd. as well as the corporate debtor who is one of the guarantors for recovery of total dues of Rs. 2,63,00,463/along with compounding interest. That, M/s. Baid Industries Pvt. Ltd. as well as the corporate debtor during pendency of the above matters, approached the applicant for settlement purpose, pursuant to which a settlement agreement dated 11.05.2018 came to be executed and as per the said settlement agreement M/s. Baid Industries Pvt. Ltd. admitted, acknowledged and confirmed that M/s. Baid Industries Pvt. Ltd. does not have any claim against the applicant and undertook to withdraw any pending proceedings against the applicant.

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It is submitted by the applicant that M/~. Baid Industries Pvt. Ltd. along with other guarantors confirmed that as on 30.06.2018 a sum of Rs. 2,63,00,463/along with compound interest @ 12% p.a. on the, above sum, from 01.07.2018 till the payment and/or realisation, is due, outstanding and payment to the present applicant.

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It is submitted by the applicant that under the settlement

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agreement dated 11.05.2018, M/s. Baid Industries Pvt. ltd. was to pay an amount of Rs. 3,51,02,340/- to the applicant and had issued and handed over 60 (sixty) post dated cheques each amounting to Rs. 5;85,039/- to the

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P age 5 112

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CP (IB) 178/9/NCLT/AHM/2018

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applicant with undertaking that all the cheques on their respective dates will be cleared.

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It is submitted by the applicant that the applicant and Mis. Baid Industries Pvt. Ltd. as well as the corporate debtor along with other guarantors jOintly filed an application under order XXIII Rule 3 with section 151 of the CPC before the Hon'b/e Judge l Commercial Court, Vadodara in the Common Civil Suit No. 27/2018 thereby placing on record the settlement agreement dated 11.05.2018 1 wherein, the Hon'ble Judge, vide order dated 12.05.2018 decided the joint application filed by the present applicant and Mis. Baid Industries Pvt. Ltd. as well as the corporate debtor along with the other guarantors and further directed both the parties to abide by the terms and conditions mentioned in the settlement agreement dated 11.05.2018. That, as per the settlement agreement dated 11.05.2018 and order dated 12.05.2018 of the Commercial Court, Vadodara, the applicant withdrew the· application being CP· (IB) No. 2/9/NCLT/AHM/2018 filed before this Tribunal.

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. . 16. It is submitted by the applicant thatr thereafter, as per the settlement agreement dated 11.05.2018, when the first post-dated cheque of Rs. 5/85,039/- dated 20.07;2018 being the first instalment towards payment of total amount of Rs. 3/51,02,340/- was presented, It was dishonoured as per stop payment instruction given by Mis. Baid IndUstries

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P age 6112

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CP (IB) 178/9/NCLT/AHM/2018· 'b

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Pvt. Ltd. violating the terms and conditions of settlement agreement dated 11.05.2018. That, the applicant vide legal notice dated 26.07.2018 brought to the notice of M/s. Baid Industries Pvt. Ltd. that the terms and' conditions of the settlement agreement dated 11.05.2018 has been violated.

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It is submitted by the applicant that the applicant vide demand notice dated 22.01.20i9 under Section 8 of the provisions of the IB Code, once again called upon M/s. Baid Industries Pvt. Ltd. to make payment of Rs. 3,51,02,340.00 (Rupees three crores fifty-one lacs two thousand three hundred forty only) however, M/s. Baid Industries Pvt. Ltd. failed to clear the outstanding debt.

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It is further submitted by the applicant that, under these circumstances, the applicant was constrained to file section 9 application under the IB Code against M/s. Said Industries Pvt. Ltd. being CP (IB) 478/2018 before this bench.

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It is further submitted that the applicant vide demand notice issued under the provisions of the Code called upon the instant corporate debtor, being one ofthe guarantors under the settlement agreement dated 11.05.2018 to make payment of Rs. 3,51,02,340/-, however, the corporate debtor failed to comply with the said demand notice, hence the present application.

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P age 7 I 12

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. ; ..

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CP ,IB)"178/9/NClT/AHMi2018 .

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In support of Its claim, the petitioner has submitted copy of

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the following documents along with the application.

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~ No.	. Particulars. ' ._.	IPageN°l
01	Form1'10.5	i6
02	S~rtingaffidavit	' 7-18
03	Additional affidavit ._	19
04	Board resolution dated 12.11.2018	20 -.
05 06	Order dated 12.05.2018 passed by ·the Hon'ble Judge, Commercial Courtl Vadodarain thejointapplication filed bytheapplicant and the corporate debtorInCivil Suit No. 27of 2018 along with copyofthe settlement agreement	22-35
: ;	Workingforcomputationo(amountand dates ofdefault -= . . .	36-48
~7	A statementofbank account where deposits are madeorcredits received normally by the operational creditor inres~ectofthedebt	49-110
08	Bank certificate	111-113
09	iLegal notice dated 26.07.2018 issued by the aPQlicant	114-115
10	Demand notice under form 3ofthe Code jdated 12.01.2019 issued by theapplicantto the cor~oratedebtor . . .	116-120 .J
11	Affidavitofservice ~~~~~--	! -

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Findings:

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Heard the learned counsel appearing on behalf of the applicant. On perusal of the record it is found that for the first time the matter was notified on 13.03.2019. Since then, the matter was notified for hearing on different dates, but the respondent never appeared either in person or through advocate before the bench nor submitted any reply despite notice Issued by the applicant as well as the Registry .. The Adjudicatiog Authority passed an order on 23.07.2019 for paper publication. Since service Is complete, the matter has been' heard in absence of the corporate debtor.

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CP (lB) 178j9jNCLTjAHMj2018 \ o

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While examining an application under Section 9 of the Act, will have to determine the following: _ 1";

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(i) Whether there is an "operational debt" as defined exceeding Rs, 1.00 lac (See Section 4 of the Act)

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(ii) Whether the documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid;

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and

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(iii) Whether there is existence of '8 dispute between the parties or the record of the' pendency of a suit or arbitration proceeding filed oe'fore the receipt of the demand notice of the unpaid operational debt in relation to such dispute?

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If any of the aforesaid conditions is lacklng r the application would have to be rejected.

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Thus r under the facts and circumstances and as discussed above r in the light of the Hon'ble Supreme Court Judgement and the provisions thereof as enshrined in Insolvency & Bankruptcy Code, this adjudicating authority is of the considered view that operational debt is due to the Applicant. Thatr service is complete and no dispute has been raised by the respondent. That r Applicant is an Operational Creditor within the meaning of sUb-section (5)

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1 J

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CP (IB) 178/9/NClT/AHM/2018

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of Section 20 of the Code. From the aforesaid material on record, petitioner is able to establish that there exists debt as well as occurrence of default.

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That, the Application filed by the Applicant is complete in all respects.

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The applicant/operational creditor has not proposed the name of Interim Resolution Professional. Therefore l this Adjudicating Authority hereby appoint Shri Sunil Kumar Agarwal, Tower 6/603 Devnandan Helghtsl Near Poddar School, New e.G. Road, Chandkheda, Ahmedabad 382 424 ([email protected]) having registration No. IBBIjIPA 001/IP-P01390/2018-19/12178 to act as an interim resolution professional under Section 13(l)(c) of the Code.

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From the· above stated discussion and on the basis of material available on record it is a fit case to initiate Insolvency Resolution Process by admitting the Application under Section 9(5)(1) of the Code.

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The petition is, therefore, admitted and the moratorium is declared for prohibiting all of the following in terms of sub section (1) of Section 14 of the Code:

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(I) the Institution of suits or continuation of pending suits or proceedings against the corporate debtor including

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CP (lB)178/9/NCLT/AHM/2018

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execution of a-i1y judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;

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(iI) transferring, encumbering, alienating or disposing of by the corporate debtor any of its asse1ts or any legal right or beneficial interest therein;

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(iii) any action to foreclose, recover or enforce any security interestcreated by the corporate debtor in respect of its property including any action under the Securitisatlon and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);

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(Iv) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.

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It is further directed' that the supply of goods and essential services to the Corporate Debtor, if continuing, shall not be terminated or suspended or Interrupted during moratorium period. The provisions of sub-section (1) shall, however, not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator.

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The order of moratorium shall have effect from the date of receipt of authenticated copy of this order till the completion of the corporate insolvency resolution process or until this

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P age 11 112

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· ·CP (1B):lJ8/9/NCLT/AHM/2018

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Bench approves the resolution plan under sub-section (1) of Section 31 or passes an order for liquidation of corporate debtor under Section 33 as the case may be.

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This Petition stands disposed of accordingly with no order as to costs,

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31~ Communicate a copy of this order to the Applicant, Financial Creditor, Corporate Debtor and to the Interim Insolvency Resolution Professional,

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Registry is directed to inform the office of the Registrar of Companies that the respondent company is under corporate Insolvency resolution process and! therefore, no proceedings for striking off name of the respondent company be initiated arising out of non-compliances of Sections 159 to 162 & 220 etc. of the Companies Act, 2013 as it would be detrimental to the process of liquidation and sale of assets to realise the amount for all the stakeholders.

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nair

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~ Ms. j\I1anorama Kumari Adjudicating Authority Member (Judicial)

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In the matter of Baid Narrow Fab Private Ltd. C.P. (Ib) No. 178-NCLT-AHM-2019

Case brief

What is this about?

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In the matter of Baid Narrow Fab Private Ltd. C.P. (Ib) No. 178-NCLT-AHM-2019

Case brief

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