Allowed

In the matter of Shivshakti Barrels Private Limited Cp (Ib) No. 717-9-NCLT-AHM-2019

NCLT10 Mar 2021

Case brief

AI extract

What is this about?

NCLT Ahmedabad admitted an application for CIRP filed by a foreign insurance corporation against an Indian corporate debtor. The tribunal rejected defenses regarding standing due to foreign incorporation and assignee status, rejected the time-bar claim due to valid acknowledgments, and appointed an IRP.

What did the court decide?

Application admitted; Moratorium declared; Mr. Hitesh Ratilal Abhani appointed as Interim Resolution Professional; Registry directed to communicate order.

In the matter of Shivshakti Barrels Private Limited Cp… — Insolvency and Bankruptcy | NCLT (2021)

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BEFORE THE ADJUDICATING AUTHORIW NATIONAL COMPANY LAW TRIBUNAL AHMEDABAD-BENCH COURT 1

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cP^(lBl No. 7lilglNctT/AHM/2019

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CoTam: MADAN BHALCHANDRA GOSAVI, MEMBER (JUDICIAL} VTRENDRA KUMAR GUPTA, MEMBER (TECHNICAI)

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ATTENDANCE-CUi,I-ORDER SHEET OF THE HEARING BEFORE THE AHMEDABAD BENCH OF THE NATIONAL COMPANY I-AW TRIBUNAL ON 10.03.2021

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Name of the Company:

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Korea trade lnsurance Corporation (KSURE) vls

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Shivshakti Barrels Pvt Ltd

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Section:

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9 of the lnsolvencv& Bankruotcv Code. 2015

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ORDER

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The case is fixed for pronouncement oforder.

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The order is pronounced in open court vide separate sheet.

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tsJ69.z '/ (VIRENDRA.KUMAR GUPTA) MEMBER(TECHNrcAL)

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(MADAN B. GOSAVD MEMBER (JUDICIAL)

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Dated this the lOth day of March, 2021.

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BEFORE THE ADJUDICATING AUTHORITY NATIONAL COMPANY LAW TRIBUNAL AIIMEDABAD BENCH COURT-I

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cP (IBl No.7 t7 / 9 / NCLT I AIII|II I 2oL9

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(Application for initiation of Corporate Insolvency Resolution process under Section 9 of the Insolveniy & Bankruptcy Code, 2016)

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In the matter of:

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M/s Korea Trade Insurance Corporation CIN No. 102-82-06816 14, Jongno, Jongno-gu, ll1-729, Seoul, South Korea

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Address for Serving in India at; Unit No. 605, 6th Floor, Global Foyer Building, Sector- 43, Gurugram- l22OO9 Haryana

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..Operational Creditor

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Versus

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M/s. Shivshakti Barrels Private Limited (crN No. U293O9GJ2OOOPTCO38 1771 Having an address at: Opposite Gujarat Metal Cast Village- Dunia Halol Godhra Road Halol, Gujarat- 389350, India

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...Corporate Debtor

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Order reserved on O2.O3.2O21 Date of Pronouncenrent ofOrder 1O.B,2O2l

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Coram: MADAN B. GOSAVI, MEMBER(JI VIRENDRA KUMAR GUPTA, MEMBER lT)

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cP lt9]| 7 77 I 9 / NCLT /AH M/20 19

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Appearance:

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Ld. Counsel Mr. Harshrajsingh Vaghela appeared for the operational creditor.

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Ld. Counsel Mr. Arpit Singhvi appeared for the corporate Debtor.

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ORDER , [PeT^{VIRENDRA KUMARGUPTA, MEMBER(TII}

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The present application is filed under Section 9 of the Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as^..IB Code,) by Operational Creditor M/s Korea Trade Insurance Corporation to initiate the Corporate Insolvency Resolution Process against Corporate Debtor M/s Shivshakti Barrels Rrt. Ltd for the default amount of USD 345,130/- and in Indian rupees of Rs. 2,47,46,959.90/- including interest

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The operationa-l creditor submitted that the debt was assigned by M/ Kolon Global Corporation to the application vide assignment letter dated 22..O9.2016, the applicant being the insurer had paid the entire amount to the M/s Kilon Global Corporation.

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The operational creditor supplied the goods to the corporate debtor as per the specification given by the corporate debtor, and the operational creditor rajsed two invoices dated 02.12.2015 ald 14.12.2015 for the tota-1 amount of USD 410,130/- The corporate debtor has admitted the debt vide letter dated 14.01.2016 and ,lPage

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cP(t8) 717l9/NCLT / AHM/ 2079

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assured to make the due payment till 31.12.2016. The corporate debtor revised the date for making the payment of the due amount tili Oct- Nov 2016 through an email dated 07.05.2016. But, the corporate debtor had not paid the due amount as on said agreed date.

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The operationa-l creditor submitted that both transactions were insured by the applicant company i.e. Korean Trade Insurance Corporation. The applicant reimbursed the loss to the M/s Kolon Global Corporation. The debt was assigned to the applicart by M/s Kolon Global Corporation vide assignment letter dated 22.09.2016. This fact was informed by the applicant to the corporate debtor vide email dated 07.11.2016. The applicant had also requested the corporate debtor for making the payment of outstanding amount.

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The operational creditor sent a demand notice on 12.04.2017 asking for the payment of USD 4LO,|3O/-. The corporate debtor vide its letter dated 06.06.2077 once again admitted the debt and assured that the due debt shall be paid in a phased manner. On the objection by the applicant on the aforesaid payment plan, the corporate debtor vide letter dated 20.06.2017, proposed a new payment plan to the applicant vide letter dated 20.06.2017 that

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V,t

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cP(ts) 717 /9/NCLT IAH M/2019

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aI1 the due amount shall be paid by September 30, 2Ol9 to the operational creditor. The operational creditor agreed with this revised payment plan and informed the same to the corporate debtor vide letter dated 20.07.2017 and also instructed the corporate debtor for adherence on this payment plan failing which interest shall be charged @18o/o per annum on due amount. The same was also acknowledged by the corporate debtor ttrrough a letter dated 21.O7.2017.

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The operational creditor submitted that the corporate debtor made the total payment of USD 65,000/- till September 2018. The corporate debtor sent an email on 08.09.2020 after making the payment of USD 5,000/- to the applicant. However, as per the records the corporate debtor failed to make the payment thereafter even after regular follow-up by the operational creditor.

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7 . The operational creditor sent a demand notice to the corporate debtor under section 8 of Insolvency and Bankruptcy Code, 2016 read with rule 5 (1) of IBBI (Application to the Adjudicating Authority) Rules, 2016 in form 3 for the payment of the remaining amount of USD 345,130/- on 28.05.2019. The corporate debtor replied to the said demand notice on 07 .O7 .2OL9

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cP(tB) 717 /9/NCtr /AHM/2019

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	andagainadmitedthedue amount.But, thecorporatedebtor
	miserably failed tomakethepaymentofthe dueamounttilldate.
8.	Thereafter,theoperationalcreditorfrled presentapplicationon
	28.O9.2019for initiationoftheCorporate Insolvency Resolution
	Process.Thecorporatedebtorlileditsreplytothepresent
	applicationandsubmittedthatthepresent applicationisnot
	maintainable astheapplicationisnot filed by theoperational
	creditor. The operationalcreditor hassuppliedthegoodstothe
	corporatedebtor andtl:epresent applicationisfrledbya third-
	person,therefore,thereisnorelationofcreditoranddebtor
	betweentheapplicaltand corporatedebtor.
I.	Thecorporate debtorfurthersubmittedthat theassignmentof
	debtbytheoperationalcreditor tothe applicantwasnotinformed
	tothecorporate debtorandconsent ofthecorporatedebtorwas
	nottakenbythe operational creditorforsuch assignmentof debt.
10.	Thecorporatedebtor statedthatthedebtistime-barred asthe
	invoices were raisedinAugust 2015 and the present application
	wasfiledinAugust 2019aftermorethanthree years.Itisalso
	statedby thecorporatedebtorwithrespecttoacknowledgment
	madebythecorporate debtorthatsuchdeadandtime-barred
	debtcant berevivedby theallegedacknowledgmentor 5lPage

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cP(l B) 717l9/NCLr/AHM/2019

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repayment. Therefore the present application is liable to be

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dismissed on this ground.

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The corporate debtor has stated the applicant does not fali under the definition of the person as given under section 3(23) of IB Code. As admittedly the applicant is a company arrd as per definition of the company under section 2 (2Ol of the Companies Act, 2013 wherein it is stated that "company" means a companA incorporated under this Act or under ang preuious Compang Latu; h.ence, the present application does not fall under the definition of the person. Therefore, the present application is liable to be dismissed on this ground. The Corporate debtor took the plea that Mr. Abhishek Aggarwal is not authorized to initiate this proceedings by the board of the applicant company.

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The corporate debtor has also submitted and denied for making the payment of interest @ L8% per annum as demanded by the applicant on the ground that there is no agreement for interest on outstanding amount.

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The operationa-l creditor filed the rejoinder to the repiy and submitted that the corporate debtor has admitted the debt however, for misleading this Adjudicating Authority has raised a few grounds. The IB code recognizes the right of ar assignee to

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cPlB) 7L7 /9/NcLr /AHM/2019

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file and maintain an application in respect of outstanding dues. Therefore, the defense raised by the corporate debtor in respect of that assignment does not constitute the operational debt is baseless.

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L4. The operationa-l creditor further submitted and rebutted the contention of the corporate debtor in the respect that the present application is time-barred on the ground that the corporate debtor, again and again, acknowledgment of the due amount.

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Heard both counsels of operational as well as corporate debtor and perused the record. It appears that the contentions raised by the corporate debtor that there is no relation of operational creditor and debtor between the applicant and corporate debtor are baseless. Though the goods were not supplied by the applicant but, the debt was assigned by the operational creditor vide assignment letter dated 22.09.2016 to the applicant, and the same was informed to the corporate debtor by the operational creditor through an e-mail dated 07.11.2016. Therefore, the assignment of operational debt is not required to be informed to the corporate debtor nor any consent of the coporate debtor is required as per the provisions of IB Code.

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The contentions of the corporate debtor in respect tJlat the present petition is time-barred and not maintainable are also not valid. On perusal of the invoices, it appears that two invoices vvere raised by the operational creditor on 04.08.2015 and 15.07.2015 and the due date of both the invoices was on O2.L2.2O15 and 14.12.2015 respectively. However, a number of times, the corporate debtor through its letters acknowledged the debts. The debt can be said as dead debt only if the said debt is not acknowledged within the original period of limitation i.e. 3 years from the date of default. In this case, the corporate debtor has vide letter dated l4.OL.2Ol6, 06.06.2017, 20.06.2017, arrd 21.07.2017 acknowledged the debt which complies with the terms of section 18 of the Limitation Act, 1963. More so, the corporate debtor has paid the amount of USD 5000/- and sent an email on 08.09.2018 and acknowledged the due amount. Thus plea made by the corporate debtor is rejected.

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As far as the plea of the Corporate Debtor that the applicant is not eligible to file this application for the reason that it does not fa]l within the definition of "Person" as well as "Compan/ as mentioned in Section 2(2Ol of the Companies Act, 2013, we hold that such plea is without any merit for the reason that Section 3(23)(9) of IB Code provides any 8lPage

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cP(tB) 717l9/NCLT I AHMI 2079

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entity established under a statute and it also includes a person resident outside India. The def:.nition of the "person,, as per this clause itself includes a company, hence, a company established under any statute outside India would also be considered as a person eligible to fi1e this application under Section 9 of IBC, 2016. Section 2(251 of the IB code also provides a "person resident outside India, means a person other than a person resident in India having read both the provisions i.e. section 3 (23) and 3 (25) remains no doubt that foreign entity can frle an application under section 9 of IB Code. This view is supported by the judgment of The Honble NCLT, Mumbai Bench in C.P (IB) No. 3735 of 2018 in the matter of M/s Foreuer Gtory Trading Limited Vents M/ s Global Potaersource (ndia) Limited. Apart from this, Section 2{a2l of the Companies Act, 2013 also defines a foreign company and considering that defrnition as well, the applicant is eligible to file this application.

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The contention raised by the corporate debtor in respect that the board of operational creditor has not authorized Mr. Abhisekh Aggarwal to initiate the proceedings under the insolvency and Bankruptcy Code is wrong and baseless. On perusal of the power

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cP lBl 7 17 / 9 / NCLT IAHM/2019

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of attorney dated 14.11.2018, Mr. Abhisekh Aggarwal was

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authorized by the Chairman and President Mr. Kang, B1.ung Tae of the applicant company to initiate the appropriate legal proceedings including liquidation on behalf of the applicant company.

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The present application is defect-free and complies with the relevant provisions of the IB Code and Rules formed thereunder. The name of Resolution Professional is not mandatorily to be recommended by the operational creditor in the instant application, and the operational creditor has also not recommended the Resolution Professional to appoint as an IRP. In view of the above observations, we allow tJle present applications with the following directions;

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ORDER

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I. The instant application is admitted and the moratorium is

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declared for prohibiting all of the following in terms of Section

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14(1) ofthe Code.

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(a) the institution of suits or continuation of pending suits or proceedings against tle corporate debtor including exeqttion of any judgment, decree, or order in anA court of latu, tibuna\ arbitration panel, or other autlbritA;

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(b) transferring, encumbeing, alienating or disposing of bg,the corporate debtor ang of its assets or ang Iegal ight or beneficial interest therein;

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	(c)anyaction toforeclose,recouerorenforceang secuityinterestcreated bgthecorporatedebtor in respectofitspropertg including angaction under theSecuitisationandReconstntctionofFinancial AssetsandEnforcementofSecttritgInterestAct, 2002;
	(d)therecoueryofangpropertgbgan ownerorlessor wheresuchpropertgisoccupiedbgorinthe possessionofthecorporate debtor.
II.	The orderofmoratorium shallhave effectfrom thedate ofthis
	ordertilithecompletionoftheCorporate InsolvencyResolution
	Processor untilthisAdjudicatingAuthorityapprovesthe
	Resolution Planundersub-section(1)ofSection31 orpasses
	anorderforliquidationofCorporateDebtorCompanyunder
	Section 33 oftheInsolvency&BankruptcyCode,2016,as the
	casemaybe.
ilt.	The operationalcreditorhasnotrecommendedanyResolution
	Professiona-ltoappoint asanIRP, hence,we hereby appoint
	Mr. Hitesh RatilalAbhanihavingregistrationNo.IBBI/IpA-
	ooLI tP-PO2o6aI2020-202LI t323L, email Id,
	[email protected] as anIRPunderSection13(1)(c)of
	theCode.
v.	The IRPshall performa-llfunctionsascontemplated,'inter-alia,
	bySections17,18,20&21oftheCode.Itisfurthermade clear
	thatallpersonnelconnectedwiththeCorporateDebtor,its
	Promoter,or any otherpersonassociatedwithmanagement of
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the Corporate Debtor are under a legal obligation under Section 19 of the IB Code extend every assistance and cooperation to t-lee Interim Resolution Professional. Where any personnel of the Corporate Debtor, its Promoter, or any other person required to assist or co-operate with IRp, do not assist or Co-operate, IRP is at liberty to make the appropriate application to this Adjudicating Authority with a prayer for passing an appropriate order.

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This Adjudicating Authority directs the IRP to make a public announcement for initiation of Corporate Insolvency Resolution Process (CIRP) and call for submission of claims under Section 15 as required by Section 13(1) (b) of the Code. u. It is further directed that the supply of goods/service to the Corporate Debtor Company continuing, shall not be terminated or suspended, or intermpted during the moratorium period.

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VII. The IRP shall be r:nder duty-bound to protect and preserve the value of the property of the Corporate Debtor Company' and manage the operations of the Corporate Debtor Company as a going concern as a part of an obligation imposed by Section 20 of the Insolvency & Bankruptcy Code, 20 16. The Operatiorfal Creditor is directed to pay an advance of Rs.

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cP(rB) 717l9/Nclr I AHM / 207e

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25,000/-(Rupees Twenty five thousand Only/-) to the IRp within two weeks from the date of receipt of this order for the purpose of smootfr conduct of Corporate Insolvency Resolution Frocess (CIRP) and IRP to Iile proof of receipt of such amount to this Adjudicating Authority along with First Progress Report.

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x. The Registry is directed to communicate a copy of this order to the Operational Creditor, Corporate Debtor, and the Interim Resolution Professional and the concerned Registrar of Compalies, after completion of necessary formalities, within seven working days and upload the same on the website immediately after pronouncement of the order.

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x. Accordingly, CP(IB) No. 7 t7 I 9 I NCLT I A}IM.I 2ot9 1S allowed

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ad disposed of.

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V (Virendra'Kumar Guptal Member lTechnical)

Member (Judicialf

to be True Copy of