Alpa Rajeev Shah vs Kevin Ventures Llp Through Irp Rakesh ...

(Arising out of the Impugned Order dated 14.09.2023 passed by the 'Adjudicating Authority' (National Company Law Tribunal, Mumbai Bench at Mumbai in Company Petition (IB) No. 386/MB/2022]

IN THE MATTER OF: Mrs. Alpa Rajeev Shah Suspended Designated Partner of M/s Kevin Ventures LLP Residence Address: 704, Kent Garden Factory Lane, Opp. Jambli Gali Borivali - East, Mumbai - 400 092 ...Appellant

Versus

1. M/s Kevin Ventures LLP 1864, Tungareshwar House Tungareshwar Industrial Estate Opp.: Saraswati Buildings Sativali Vasai-East, Vasai, Maharashtra - 401208 Represented by Interim Resolution Professional Mr. Rakesh Relan ...Respondent No.1

2. M/s PMC YM-Pharma Private Limited 103, G.T. Road, West Rishra, Kolkata, Hooghly, West Bengal - 712248 In Operations at: Survey No.506 & 507 D. Nagaram (V), Koyalangudem (GP) Choutuppal Mandal Yaadadri - Bhuvanagiri - 508282 (TS) ...Respondent No.2

Present: For Appellant : Haridas G. Dave, Advocate

For Respondent : Mr. Animesh Khandelwal and Rashi Gupta, Advocates for R-1

Company Appeal (AT) (Insolvency) No. 1526 of 2023 1 of 9 Mr. Anil Airi, Sr. Advocate with Mr. Deepesh, Ms. Niharika Khanna, Advocates for R-2

JUDGMENT

(Hybrid Mode)

[Per: Arun Baroka, Member (Technical)]

The present appeal is filed under Section 61(1) of the Insolvency &

Bankruptcy Code, 2016 (hereinafter referred as "IBC") by Mrs. Alpa Rajeev

Shah, Suspended Designated Partner of M/s Kevin Ventures LLP, the

Corporate Debtor - CD, against the order dated 14.09.2023 passed by the

National Company Law Tribunal, Mumbai Bench at Mumbai [Adjudicating

Authority] in Company Petition (IB) No. 386/MB/2022 under Section 9 on the

petition of M/s PMC YM-Pharma Private Limited the Operational Creditor and

Respondent No.2 in this CIRP in this Appeal.

2. Counsels for both parties were heard and the records perused.

Brief facts of the Appeal

3. The present petition is filed against the CD - M/s Kevin Ventures LLP-

by the Operational Creditor M/s PMC YM-Pharma Private Limited under

Section 9 read with Rule 6 of the Insolvency & Bankruptcy Rules for a

resolution of total operational debt of Rs. 3,84,61,125/-, which included a

principal amount of Rs.2,73,09,675/- and interest of Rs.1,11,51,450/-.

Operational Creditor is a company registered with the Registrar of

Companies, West Bengal and is a subsidiary of a foreign company and into

manufacturing of various chemical products, intermediates of

pharmaceuticals bulk drugs etc. And the Corporate Debtor M/s Kevin

Ventures LLP is a registered LLP which is carrying out the wholesale trade

Company Appeal (AT) (Insolvency) No. 1526 of 2023 2 of 9 and commission trade except for motor vehicles and motorcycles. The

Corporate Debtor purchased goods from Operational Creditor against 9

purchase orders. The Operational Creditor delivered the goods, raised e-way

bills, paid GST to the Government on account of Corporate Debtor and raised

invoices on CD. The CD took delivery of the goods without any demur or

dispute. The CD also paid a sum of Rs.68,18,925/- during the period of

01.04.2017 to 31.03.2018 and Rs.33,06,900/- during 01.04.2018 to

31.01.2022, a total of Rs.1,01,25,825/- against total invoices amount of

Rs.3,74,35,500/-. An amount of Rs.27,30,967/- towards principal and

interest of Rs.1,11,51,450/- towards interest remained outstanding from the

last date of payment i.e. 18.03.2019 to 18.02.2022. A total outstanding of

Rs.3,84,61,125/- is payable to the Operational Creditor by the Corporate

Debtor. On 20/01/2021, the Operational Creditor also issued a demand

notice under IBC provisions demanding to pay the outstanding amount with

up-to-date interest. The Corporate Debtor acknowledged the notice but

neither paid the outstanding amount nor raised any pre-existing dispute. The

Corporate Debtor also confirmed the outstanding debt of Rs.2,73,09,675/- as

well as the statement of account as at 31.05.2018 and 15.10.2019, sent by

the Operational Creditor vide e-mails dated 09.06.2018 and 15.10.2019. In

these circumstances, Operational Creditor had submitted that the Corporate

Debtor was liable to pay a total sum of Rs.3,84,61,125/-, which includes

Rs.2,73,09,675/- towards principal and Rs.1,11,51,450/- towards interest.

Basis above, the Adjudicating Authority has concluded that there is a debt

payable by the Corporate Debtor and it has defaulted to pay and as there is

Company Appeal (AT) (Insolvency) No. 1526 of 2023 3 of 9 no pre-existing dispute raised by the Corporate Debtor, hence this a fit case

for admitting Corporate Debtor into CIRP.

4. The Appellant claims that the petition is seriously time barred. Further,

the Appellant claims that the Director of Respondent No.2 who has filed the

Company Petition under Section 9 of the Insolvency and Bankruptcy Code,

2016 ("IBC") under oath, that he was personally aware of the facts of the

matter, had joined the Company as a Director on 24.06.2019 i.e. more than

16 months after the alleged purchase order and tax invoices. Appellant also

claims that the Adjudicating Authority has admitted under Section 9

proceeding on the basis of only statement of account dated 31.05.2018 and

15.10.2019. Appellant also claims to have contradicted the alleged demand

notice issued on 18.02.2022.

5. Appellant also submits that there is a pre-existing dispute as he had

raised the issue of damaged goods supplied by Respondent No. 2 PMC YM-

Pharma Private Limited. Appellant also claims that due to faulty packing it

has suffered losses. Appellant also claims that it had received a letter from

M/s Dhanlaxmi Warehousing Company stating that the LRs produced by the

Respondent No. 2 are false, as they have not received any material from

Respondent No. 2 or collected any material on behalf of Respondent No.1

against the said notices and delivery challans of Respondent No. 2.

6. The Appellant has also submitted that the screen shots of GST which

are produced by the Operational Creditor can be tampered by reversal or

could be changed by Respondent No.2 any time after issuance. Appellant

further claims that the documents submitted by Operational Creditor

Company Appeal (AT) (Insolvency) No. 1526 of 2023 4 of 9 pertaining to the invoices, e-way bills, delivery challans and lorry receipts are

self-contradictory and in some cases the vehicle numbers were also found to

be fictitious.

7. Appellant's case is mainly hinging around the fact that adjudicating

Authority has not considered the disputes raised by Respondent No.1.

Further it claims that there is a mismatch of invoices in both the documents

Section 9 Petition and demand notice submitted by Respondent No.2.

Appellant claims that the Adjudicating Authority has failed to ascertain and

determine the debt and default as defined within the Code. It also raised the

question of initiation of CIRP and it could be raised only if the CD was

bankrupt and insolvent and not otherwise.

Findings and Conclusions

8. After hearing the counsels of both sides and perusing all the documents

on the claim of the Appellant that the petition is seriously time barred, we

find that the matter has been examined by the AA in detail and given its

findings. The OC had on 18.02.2022 issued Section 8 notice alongwith the

invoices which are relevant for the demand notice. Petition before the AA also

contains confirmation of accounts, which is dated 15.10.2019 and is for the

period from 01.04.2018 to 31.03.2018, where in the closing balance payable

to the Operational Creditor is acknowledged as Rs.2,73,09,675/, which is

signed by the authorised signatory of the Corporate Debtor Mr. Rajeev Shah.

This confirmation of account for the period from 01.04.2017 to 31.05.2018 is

available on record. On the basis of the above the Adjudicating Authority has

after analysing all the above facts come to a conclusion that there is a debt

exceeding Rs.1 Crore, which had become due and which has not been paid.

Company Appeal (AT) (Insolvency) No. 1526 of 2023 5 of 9 The grounds for time barred claims cannot be accepted as the petition was

filed on 10.03.2022 and the date of confirmation of accounts by the CD is

15.10. 2019 and this is part of record and therefore within limitation period

and is not time barred.

9. Furthermore, claims of the Appellant that the OC who has filed the

Company Petition under Section 9 of the Insolvency and Bankruptcy Code,

2016 ("IBC") under oath, that he was personally aware of the facts of the

matter, had joined the Company as a Director on 24.06.2019 i.e. more than

16 months after the alleged purchase order and tax invoices. This is a

specious argument as he is a authorised representative and the grounds are

not supporting the Appeal.

10. The Adjudicating Authority has also gone into the submission of the

Corporate Debtor on the letter obtained from M/s Dhanlaxmi Warehousing

Company wherein, is has been mentioned that on those dates of invoices

raised by the Operational Creditor, no material was received by them. AA has

returned its finding that the dates mentioned therein are the dates of invoices

and not the dates of delivery. Furthermore, he has returned finding that this

a third-party document obtained by Corporate Debtor. We do not find any

error with this finding.

11. The Operational Creditor has also placed on record the concerned e-

way bills which authenticate the dispatch of material. Further the Operational

Creditor has produced the print outs taken from the website of GST

department to further corroborate that the Corporate Debtor has availed the

ITC of IGST on the supply of material. This is a clear admission on the part

Company Appeal (AT) (Insolvency) No. 1526 of 2023 6 of 9 of Corporate Debtor of the receipt of material. Thus, the contention of the

Corporate Debtor that no goods were received by them is not found to be

acceptable. Appellant's claim that the screen shots of GST which are

produced by the Operational Creditor can be tampered by reversal or could

be changed by Respondent No.2 any time after issuance are mere conjectures

and do not support his case when other corroborating evidence is available.

12. Appellant also submits that there is a pre-existing dispute as he had

raised the issue of damaged goods supplied by the OC. Appellant also claims

that due to faulty packing it has suffered losses. The Corporate Debtor claims

to have raised many issues with respect to the complaints over telephone as

well as in person and basis that claims existence of pre-existing dispute. But

no documentary evidence has been produced with respect to that so that we

cannot accept it as an argument. On the other hand, the statement of account

has been authenticated by its representative without any demur, which

proves the debt.

13. The Adjudicating Authority has also found contradictions in the

statements of the Corporate Debtor. Corporate Debtor denies that

confirmation of accounts by Mr. Rajeev Shah and submits that this is not the

signatures of any designated partners of the Corporate Debtor or the

authorised signatory of the Corporate Debtor. Adjudicating Authority notes

that the additional affidavit filed by the Corporate Debtor before it also have

the signature of the same Mr. Rajeev Shah with the same seal of the Corporate

Debtor as authorised signatory on every page including as deponent.

Company Appeal (AT) (Insolvency) No. 1526 of 2023 7 of 9 Therefore, the submission of the Corporate Debtor is found to be misleading

and away from the facts.

14. Appellant's claims that it had an arrangement with Operational

Creditor by which the alleged invoices were drawn without actually executing

the trade transaction and/or movement of the goods covered under the

invoices - cannot stand the scrutiny as it is found to be contradictory. In other

parts of the petition as well as in this appeal, it has given various details with

respect to the disputes particularly, when he claims that goods dispatched

were not properly packed. Therefore, it can be safely concluded that the

grounds taken by the Corporate Debtor that it was an arrangement and no

such goods were being exchanged cannot be relied upon.

15. Undeniably the purchase orders have been placed by the Corporate

Debtor and the goods have been supplied by the Petitioner. Invoices have been

raised by the Petitioner, part payment have also made by the Corporate

Debtor and there is also a confirmation of balance in the shape of statement

of accounts, which is duly acknowledged and signed by the authorised

signatory of the Corporate Debtor. Further, there is evidence to prove the

supply of the material to the Corporate Debtor and it has also availed ITC of

GST on the goods received by it. Based on these facts, the Adjudicating

Authority has come to a conclusion, that all the issues raised by the Corporate

Debtor have been duly noted and findings have been returned on all the

issues raised in the Corporate Debtor, basis the documentary evidence

available with it. After hearing both the parties the Adjudicating Authority has

come to a conclusion that the petition is admissible and accordingly it has

Company Appeal (AT) (Insolvency) No. 1526 of 2023 8 of 9 passed the Section 9 proceedings for CIRP against the Corporate Debtor

namely, M/s Kevin Ventures LLP.

16. The Adjudicating Authority has on the basis of all the documents come

to a conclusion that CIRP proceedings should be initiated against the

Corporate Debtor under Section 9 of the Code, and for the above-mentioned

reasons, we do not find any error in the findings. We accordingly dismiss the

Company Appeal (AT) (Insolvency) No. 1526 of 2023 & I.A. No. 5489 of 2023.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical) 4th January, 2024

pks

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