Hemant Kumar Sarangi, Member (T)
1. The present application is filed under Section 9 of Insolvency and Bankruptcy Code, 2016 (for brevity ‘IBC, 2016’) read with Rule 6 of the
Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity ‘the Rules’) by M/s. SS Polymers (for brevity
‘Applicant’) through its proprietor Mr. Sunder Lal Gupta, with a prayer to initiate the Corporate Insolvency process against M/s Kanodia
Technoplast Limited (for brevity ‘Respondent’).
2. The Applicant, the Operational Creditor is a sole proprietorship concern, which started its business in the year of 2003, with GST Registration No.
07AAOPG5646C1ZR, Importer Exporter Code no. 0508058554, PAN no. AAOPG5846C, having its office at C-92, Wazirpur Industrial Area, Delhi,
New Delhi, 110052, inter alia, as a manufacturer and supplier of a wide range of Plastic Poly Bags for Textile Garments, Industrial Packaging, Poly
Rolls Lamination, LD, PP, HM and HDPE Bags.
3. The Respondent, namely M/s Kanodia Technoplast Limited is a company incorporated on 20.04.1995 under the provisions of Companies Act, 1956
with CIN No. U74899DL1995PLC067544, having its registered office at A-54, Wazirpur Industrial Area, New Delhi-110052. The Authorised Share
Capital of the respondent company is Rs.82,00,00,000/- (Rupees Eighty Two Crore Only) and Paid Up Share Capital of the company is
Rs.46,00,09,230/-(Rupees Forty Six Crore Nine Thousand Two Hundred Thirty Only), as per Master Data of the company.
4. It is the case of the applicant that, during the period from 05.07.2018 to 21.07.2018, the Operational Creditor supplied goods namely packaging
material, to the Corporate Debtor aggregating to an amount of Rs.54,20,802 (Rupees Fifty Four Lakhs, twenty Thousand, Eight Hundred and Two
only) and Invoices were raised on 05.07.2018 & 21,07.2018 bearing Nos. DL/18-19/0182, DL/18-19/0183, DL/18-19/0184, DL/18-19/0203, DL/18-
19/0204, DL/18-19/0205.
5. Pursuant thereto, 18 (eighteen) post dated cheques bearing Nos. 501220 to 501229, 503822 to 503826, 503834 to 503835 were issued by the
Corporate Debtor aggregating to a sum of Rs.54,20,802.00 (Rupees Fifty Four Lakhs, twenty Thousand, Eight Hundred and Two only). Although, the
first 6 (six) cheques were honoured, the next 6 (six) cheques were dishonoured, copies of the return memos for the said cheques issued by the bank
are annexed. It is pertinent to mention herein that the remaining 6 (six) posts dated cheques were not deposited by the Operational Creditor relying on
the assurances made by the Corporate Debtor that the all outstanding dues shall be paid through RTGS along with 24% (Twenty Four Percent)
interest for late payment.
6. However, after the Corporate Debtor made the first payment amounting to Rs. 3,49,002/- (Rupees Three LakhForty Nine Thousand and Two only)
vide RTGS on 25.09.2018, the Corporate Debtor expressed his inability to pay the outstanding dues through RTGS and assured that the old
dishonoured and un presented cheques will be replaced by new current dated cheques.
7. Accordingly, the Corporate Debtor vide letter dated 13.10.2018 was called upon to collect the above mentioned 33 (thirty three) post dated cheques
and to issue new current dated cheques for the outstanding dues along with interest at the rate of 24% (Twenty Four percent). Since, the Corporate
Debtor neither issued new cheques nor did it reply to the letter dated 13.10.2018, a Notice of Demand dated 06.11.2018 under section 8 of Insolvency
and Bankruptcy Code, 2016 (the “Codeâ€) read with Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating authority) Rules, 2016
was issued by the Operational Creditor to the Corporate Debtor.
8. However, the Corporate Debtor sent an email dated 16.11.2018 stating that since the Operational Creditor did not present the Cheque bearing no.
506506 dated 15.11.2018 for Rs. 1,00,000/- (Rupees One Lakh Only), the amount for the same has been transferred vide RTGS to the Operational
Creditor.
9. The Operational Creditor also states that, The Corporate Debtor issued a reply dated 22.11.2018 to the Demand Notice wherein the corporate
debtor, on one hand admitted its outstanding liability of Rs. 31,71,800.00 (Rupees Thirty Two Lakhs, Seventy One Thousand and Eight Hundred only),
however, on the other hand raised a contention that its liability stands satisfied merely by issuing post date cheques. As per the applicant, the stand
taken by the Corporate Debtor in their reply dated 22.11.2018 is a half hearted moonshine defence which is nothing but a dishonest attempt to
escape/evade its admitted liabilities. Therefore, there is no dispute with respect to the outstanding debt owed by the Corporate Debtor.
10. Furthermore, the applicant has admitted that, the Corporate Debtor have unilaterally, without any instructions, as on 31.12.2018, made several
RTGS payments amounting Rs.25,00,000/- (Rupees Twenty Five Lakhs) against first 25 (Twenty Five) of the aforementioned 33 (thirty three) post
dated cheques.
11. The applicant has further stated that, the Corporate debtor is still liable to pay the Operational Creditor balance sum of INR 9,78,223.47 (Rupees
Nine Lakhs, Seventy eight Thousand, Two Hundred Twenty Three and Paise Forty Seven only) comprising of a principal amount of Rs. 7,71,800.00
(Rupees Seven Lakhs, Seventy One thousand and Eight Hundred only) towards the outstanding invoices for goods supplied to the Corporate Debtor
along with an interest @ 24% (Twenty Four percent) per annum amounting to Rs. 2,06,423.47/- (Rupees Two Lakh Six Thousand Four Hundred
Twenty Three and paise forty seven only) calculated upto 31.12.2018.
12. The Applicant while putting his case forward relied on the following judgments:
(1) M/S DF Detuscheforfait AG And Anr. Vs. M/S Uttam Galva Steel Ltd. [CP No. 45/I&BP/NCLT/MAH/2017]
(2) Jatin Koticha v. VFC Industries Pvt. Ltd.
(3) Olive Tree Trading Pvt. Ltd. V. F lh De Filipro
(4) Rajeev K Aggarwal v Panipat Texo Fabs Pvt. Ltd.
(5) Mobilox Innovations Pvt. Ltd v Kirusa Software Pvt. Ltd.
(6) IDFC Bank Ltd v. Monnet Power Company Ltd.
(7) DF Deutsche Forfait AG v Uttam Galva Steel Ltd. (Para 76, 77)
(8) Harsh Vinimay Pvt. Ltd v Mata Mahamaya Steels Pvt. Ltd.
(9) Gulf Oil Lubricants India Ltd. V Eastern Coal fields Limited
(10) PK Vaduvammal v Jaydev Constructions (P) Ltd.
13. The respondent has relied on the following judgements:
(1) Bank of India v. Tirupati Intraprojects Pvt. Ltd.
(2) Dhar Textile Mills Ltd v Asset Reconstruction Company (India) Ltd.
(3) Wanbury Ltd. v. Panacea Biotech Ltd. (NCLT Chandigarh bench- CP no. 8/2016 & RT no 9/Chd/Pb/2017)
(4) WanburyLtd v Panacea Biotech Ltd Company Appeal (AT) (Ins) no. 64/2017
(5) Krishna Enterprises V Gammon India Ltd. NCLAT - Company Appeal (AT) (Ins) no. 144/2018
14. Respondent has filed its reply and raised objections that, as per applicant’s own admission, the respondent had already made the payment of
Rs. 25,00,000/- through RTGS out of Rs. 32,71,800/- by 31.12.2018. The remaining payment of Rs. 7,71,800/- was also made by the respondent to the
applicant by 17.01.2019 through NEFT Fund Transfer. The copies of the payment receipts of Rs. 7,71,800/- made are also attached along with the
affidavit. It shows and proves that the applicant was aware that the respondent is surely going to make the payment of the amount, however, with the
ulterior and mala-fide motive, the applicant filed the above application after two months from the date of issuing the statutory notice under the IBC.
15. That it was informed by the respondent to the applicant vide email dated 16.11.2018 that the respondent had made RTGS against cheque no.
506506 dated 15.11.2018 for Rs. 1,00,000/- which has been issued from their Axis Bank Ltd. Since the cheque was not presented on due date by the
applicant, thus, the applicant had made RTGS for the same amount. It was also informed to the applicant by the respondent that the respondent had
already issued cheques for full and final amount to the applicant which the respondent expected would be presented on their due dates in the
respondent’s bank. In case, such cheques are not presented on due dates, the respondent would be making RTGS for the same to the applicant as
done today.
16. It further states that, no agreement of any kind was entered into between the applicant and the respondent, hence, the interest asked to be paid by
the applicant from the respondent is whimsical and arbitrary. The respondent submits, that the application is filed by the applicant to force the
respondent to pay highly excessive interest rate which was never agreed by the respondent at any point of time by agreement or otherwise.
17. The respondent while putting his case forward has relied on the following judgement of Hon’ble NCLAT Krishna Enterprises v. Gammon
India Ltd. [Company Appeal (AT) (Insolvency) No. 144 of 2018]5; the issue was whether every interest due on the principal amount is included
within the definition of ‘debt’.
“5.In the present appeals, as we find that the principle amount has already been paid and as per agreement no interest was payable, the
applications under Section 9 on the basis of claims for entitlement of interest, were not maintainable. If for delayed payment Appellant(s)
claim any interest, it will be open to them to move before a court of competent jurisdiction, but initiation of Corporate Insolvency Resolution
Process is not the answer.
6. We find no merit in these appeals. These are accordingly dismissed. No cost.â€
18. Admittedly, an amount of Rs. 25,00,000/- (Rupees Twenty Five Lakhs Only) out of Rs. 32,71,800/- (Rupees Thirty Two Lakhs Seventy One
Thousand Only) was paid by 31.12.2018 through RTGS. The remaining payment of Rs. 7,71,800/-(Rupees Seven Lakhs Seventy One Thousand Eight
Hundred Only) was also made by the respondent to the applicant by 17.01.2019 through NEFT Fund and now the applicant wants to pursue the
application only for an amount of Rs.2,16,155/- (Rupees Two Lakhs Sixteen Thousand One Hundred Fifty Five Only) being interest, albeit after
admitting payment of entire principal amount.
19. As per the orders of Hon’ble NCLAT in the case of Krishna Enterprises v. Gammon India Ltd. [Company Appeal (AT) (Insolvency) No. 144
of 2018]5, the issue was whether every interest due on the principal amount is included within the definition of ‘debt’. The relevant para is
reproduced as under:-
“5.In the present appeals, as we find that the principle amount has already been paid and as per agreement no interest was payable, the
applications under Section 9 on the basis of claims for entitlement of interest, were not maintainable. If for delayed payment Appellant(s)
claim any interest, it will be open to them to move before a court of competent jurisdiction, but initiation of Corporate Insolvency Resolution
Process is not the answer.
6. We find no merit in these appeals. These are accordingly dismissed. No cost.â€
20. The Hon’ble NCLAT held that not every interest can be treated as a debt. If in terms of the agreement, interest is payable to the operational
or financial creditor, then the debt will include interest; otherwise, the principal amount is to be treated as debt which is the liability in respect of the
claim that can be made from the corporate debtor.
21. In view of above, we are satisfied that in the present case to the principal amount had already been paid, also, there is an absence of any
agreement stating the interest to be charged. Hence, this bench, respectfully following the precedent set by Hon’ble NCLAT, is of the view that,
the applications under Section 9 on the basis of claims for entitlement of interest, were not maintainable. If for delayed payment Appellant(s) claim
any interest, it will be open to them to move before a court of competent jurisdiction, but initiation of Corporate Insolvency Resolution Process is not
the answer.
22. As a consequence of above discussion, the applicant failed to establish that after payment of entire principal amount, the claim with respect to only
interest on delayed payment in absence of any specific contract will amount to operational debt under provisions of the code.
23. The application is dismissed.
24. Let the copy of order be served to the parties and to IBBI.
