Devmata Exim Pvt. Ltd vs Kavitha Surana, Rp Of Veerganapathi ...

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI Company Appeal(AT)(Insolvency) No. 526 of 2019 IN THE MATTER OF: Devmata Exim Pvt. Ltd. ...Appellant Vs Ms. Kavitha Surana, ....Respondent RP of Shri Veerganapathi Steels Pvt. Ltd. Present: For Appellant: Mr. Aashish Jain Lunia, and Mr. R. Soundara Rajan, Advocates

For Respondent: Mr. Goutham Shivshankar, Mr. Shantanu Singh, Advocates

ORDER

06.09.2019 In the Corporate Insolvency Resolution Process initiated

against M/s Veerganapathi Steels Pvt. Ltd., the Resolution Professional filed

Misc. Application against the Appellant- Devmata Exim Pvt. Ltd. through its

Direction Mr. Vimal Nayan Bothra with following prayer:

"i. To pass order to receive the amount Rs.

10,36,91,319/- (Rupees Ten Crores, Thirty Six Lakhs,

Ninety One Thousand, Three Hundred and Nineteen only)

which is pending from the Respondent to the Corporate

Debtor - Shrei Veerganapathi Steels Pvt. Ltd.

ii. Pass such other necessary orders to enable the

Resolution Professional to carry on the Corporate

Insolvency Resolution Process in a smooth manner."

Company Appeal(AT)(Insolvency) No. 526 of 2019 Page 1 of 4

2. The Adjudicating Authority, taking into consideration the List of Debtors

available with the Corporate Debtor, financial report provided by the statutory

auditor of the Company, the bills & invoices and the entries of the last three

years that the Respondent M/s Devmata Exim Pvt. Ltd, one of the debtor of the

Corporate Debtor had purchased the materials from the Corporate Debtor during

regular course of business held that the outstanding balance as on 31.03.2018

stands at Rs. 10,36,91,319/- which is receivable from M/s Devmata Exim Pvt.

Ltd.

3. The case of the Appellant before the Adjudicating Authority was that a

Purchase Order dated 05.09.2016 was issued by the Appellant to the Corporate

Debtor for supply of steel. The Purchase Order prescribed the terms of payment.

According to Appellant, as per one of the condition of the Purchase Order, if the

supply is not made in time, payment will not be released. Referring to Clause -

4 of the Purchase Order, learned Counsel for the Appellant took plea that due to

non-execution of complete order and variances of quality & quantity in fact

certain amount to be debited from the account of Shri Veerganapathi Steels Pvt.

Ltd. (Corporate Debtor).

4. On behalf of the Appellant it was also submitted that immediately after

receipt of the part consignment, Corporate Debtor was informed by letter dated

27.09.2016 that the materials received were not as per the specification

mentioned in the Purchase Order with request to lift and take back the materials

delivered and replace the goods by standard material as per the specification.

Reliance has been placed on subsequent correspondence between the Corporate

Company Appeal(AT)(Insolvency) No. 526 of 2019 Page 2 of 4 Debtor and the Appellant to suggest that no amount is payable in terms of the

agreement.

5. The Adjudicating Authority noticed that the goods which were supplied by

the Corporate Debtor were accepted by the Appellant and subsequently the

goods, which were alleged to be sub-standard, were also sold by the Appellant

and collected the amount on sale. Taking into consideration the aforesaid fact,

the Adjudicating Authority held that the Respondent was liable to pay a sum of

Rs. 10,36,91,319/- to the Corporate Debtor and thereby directed the Appellant

to pay the amount within two weeks and on failure to pay 12% interest per

annum for delayed payment.

6. This Appellate Tribunal, while issuing notice to Respondent on 16.05.2019

for determination of issue as to whether the Resolution Professional can pray for

recovery of any amount of Corporate Debtor, and by interim order, directed the

Appellant to keep the amount in a separate Escrow Account.

7. On 05.08.2019, the learned Counsel for the Liquidator appeared and

submitted that in spite of interim order passed by this Appellate Tribunal, the

Appellant has not deposited the amount in a separate Escrow Account. It is also

informed that against the interim order dated 16.05.2019 passed by this

Tribunal, the Appellant moved before the Hon'ble Supreme Court but the Hon'ble

Supreme Court rejected the Special Leave to Appeal.

8. Apart from the fact that the Appellant has not complied with the interim

direction of this Appellate Tribunal by depositing the amount in a separate

Escrow Account, we find that the Adjudicating Authority has already heard the

Company Appeal(AT)(Insolvency) No. 526 of 2019 Page 3 of 4 matter, recorded the submissions made by both the parties and taking into

consideration, the terms of the agreement has held that the Appellant is liable

to pay a sum of Rs. 10,36,91,319/- as the Appellant had received and accepted

the goods and not returned the same to the Corporate Debtor and sold the goods

and realized the cost.

9. Having heard the parties, as we find that the Appellant has sold the goods

supplied by Corporate Debtor, the ground taken by the Appellant that the goods

were sub-standard, cannot be accepted.

From the reason aforesaid, in absence of any merit and as the Appellant

has not complied with the interim direction of this Appellate Tribunal, no relief

can be granted. The Appeal is dismissed. No cost.

[Justice S.J. Mukhopadhaya] Chairperson

[Justice A.I.S. Cheema] Member (Judicial)

(Kanthi Narahari) Member(Technical) Akc/Sk

Company Appeal(AT)(Insolvency) No. 526 of 2019 Page 4 of 4