Mahadev Trading Company vs Supreet Chemicals Private Limited

M/S MAHADEV TRADING COMPANY, Through Its Proprietor Mr. Hiteshbhai Rasiklal Upadhyay, Having Registered Office At: GF-11, Alien Complex, Nizampura Road, Vadodara - 390002 ...Appellant

Versus

M/S SUPREET CHEMICALS PVT. LTD. Bearing CIN No. U24231GJ1992PTC017944, Having Registered Office At: A1/5402, Fourth Phase, GIDC Vapi, Gujarat T-Balsad, Gujarat - 396195 ...Respondent

Present: For Appellant: Mr. Aditya Shukla, Proxy Counsel for Mr. Atul Sharma, Adv. For Respondents: Mr. Narendra Jain, Adv.

JUDGMENT

Per: Justice Rakesh Kumar Jain:

This appeal is directed against the order dated 23.03.2021 passed by the

Adjudicating Authority (National Company Law Tribunal, Ahmadabad Bench,

Court-I) by which an application filed under Section 9 of the Insolvency and

Bankruptcy Code, 2016 (in short 'Code') by the Operational Creditor (M/s

Mahadev Trading Company) to initiate the Corporate Insolvency Resolution

Process (in short 'CIRP') against the Corporate Debtor (M/s Supreet Chemicals 2

Pvt. Ltd.) on account of default of an amount of Rs. 2,28,72,166/- with

interest as on the date of default i.e. 22.07.2016 has been dismissed on the

ground of lack of evidence of having supplied the alleged goods.

2. In brief, the case set up by the Appellant is that the Respondent had

approached it for supply of chemical substances such as caustic soda flakes,

acid slurry, phosphoric acid etc. which was supplied as per demand of the

Respondent in respect of which 24 invoices were raised w.e.f. 06.07.2016 to

23.10.2016 for a total amount of Rs. 2,28,72,166/-. According to the

Appellant, the Respondent paid an amount of Rs. 9,65,130/- against invoice

no. 30 which was raised on 06.07.2016 for an amount of Rs. 10,41,390/- and

apart from this payment, the total outstanding principal amount is Rs.

2,19,07,036/-. It is alleged that before filing the application under Section 9 of

the Code, the Appellant issued the demand notice in terms of Section 8 of the

Code on 15.02.2019. The Appellant received a letter from the Respondent

wherein it had denied the liability much less the outstanding amount as

claimed.

3. In the Reply filed by the Respondent, it was claimed that the invoices

raised by the Appellant are bogus in nature. The Appellant has failed to

furnish any supporting documents such as weighing slip, challan and

purchase orders issued by the Respondent to substantiate its claim. It was

further denied by the Respondent that any part payment to the tune of Rs.

9,65,130/- against invoice no. 1 dated 06.07.2016 was made, however, the

invoice no. 30 for an amount of Rs. 10,41,290/- was admitted for which the

payment has allegedly been made.

Company Appeal (AT) (Ins.) No. 149 of 2022 3

4. The Adjudicating Authority, in the impugned order, has made a

reference of all the alleged invoices and observed that these transactions are

not for supply but for other purposes and came to a conclusion that the

Appellant has failed to discharge his burden to bring on record cogent

evidence that the goods were actually supplied to the Respondent.

5. On 07.09.2022, the case was thoroughly argued and Counsel for the

Respondent made an offer that if the Appellant prove the claim made in the

Application filed under Section 9 of the Code with documents within a period

of one month then it would still be happy to pay the alleged amount. In this

regard order was also recorded which is as under:

"During the course of hearing, counsel for the Respondent has made a candid offer to the Appellant that the Respondent is ready and willing to pay the amount as claimed by the Appellant in case it is so proved with documents. In this regard, counsel for the appellant prays for one month time. List this appeal on 10.10.2022."

6. Today, Counsel for the Appellant, fairly conceded that it could not

produce the documents before the Respondent for the purpose of claiming the

amount.

7. We have heard Counsel for the parties and after examining the record

are of the considered opinion that there is no error in the impugned order

because the application filed by the Appellant was dismissed by the

Adjudicating Authority on the ground that the Appellant has failed to lead the

evidence much less cogent to prove supply of goods and when an opportunity

was given to the Appellant before this Tribunal and the case was adjourned for

a period of one month on the offer made by the Respondent that in case the

Appellant produces before it documents even now to prove its case then he

Company Appeal (AT) (Ins.) No. 149 of 2022 4

shall make the payment. However, the Appellant has miserably failed to

produce the documents before the Respondent even within a period of one

month and that too on a candid statement made by the Respondent that it

would honour its liability in case the evidence is produced before it.

8. Thus, in view thereof, the absence of any evidence much less cogent, the

present appeal lacks merits and is thus hereby dismissed. No costs.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mr. Kanthi Narahari] Member (Technical)

New Delhi

03rd November, 2022

Sheetal

Company Appeal (AT) (Ins.) No. 149 of 2022