VALIA & CO Vs. JORD ENGINEERS INDIA LTD

JUDGEMENT

(1.) It is a Company Petition filed u/s. 9 of The Insolvency and Bankruptcy Code by the Operational Creditor namely Valia & Co against the Corporate Debtor namely Jord Engineers India Ltd. for initiation of Insolvency Resolution Process against this Corporate Debtor on the ground that this corporate debtor defaulted making payment to the goods i.e. Iron, Steel and raw-material supplied by the Operational Creditor in between 2011 and 2012 for an amount of RS. 4,72,28,431 and also arrears of interest of Rs. 10,70,493 on delayed payment made prior to 2011 i.e. from 01.04.2010 to 31.03.2011.

(2.) When it has been put to the Creditor Counsel as to how this Creditor entitled to make a claim in the year 2017 over the goods supplied in the year 2011-12, the Creditor Counsel has stated that since this debtor company being referred as sick unit on 09.11.2005 by BIFR and continuing so until before the date of Sick Industrial Companies (Special Provisions) Act 1985 (SICA) was repealed on 1-12-2016, this Creditor was all along deprived by section 22 (suspension of legal proceedings, contracts, etc) of SICA to proceed against this Corporate Debtor for realization of the monies mentioned in the above table. The counsel further says as soon as SICA has been repealed and since right for recovery has been open to the creditor, it has filed this case construing this right for recovery has accrued to the creditor from 1st December 2016 only. For this right has become open to the creditor since 1-12-2016, a notice was issued on 26.04.2017 u/s. 8 of this Code to the debtor by sending all the invoices along with the notice. Though the same was received, the Corporate Debtor failed to respond to the notice within 10 days from the date of receipt of notice. However, this Corporate Debtor gave reply on 22.05.2017 stating that the Corporate Debtor is under no obligation to repay this claim because the goods supplied to the Corporate Debtor are inferior in quality, and more so, this claim is barred by limitation for the reference made in this Company Petition will not save limitation to the claim made by this Creditor, because Section 22 of SICA is applicable only to the cases where claim already pending as on date this company was declared as sick unit. In addition to these two defenses, the Corporate Debtor has also raised a defense that this debtor company has never confirmed this claim made by this Creditor.

(3.) In support of the defenses raised, the Debtor Counsel, to justify his contention, relied upon a judgment in between Deputy Commercial Tax Officer and others v. Coromandel Pharmaceuticals and others, 1997 AIR(SC) 2027 and Polymermann (Asia) P. Ltd. v. Union of India & Others,2006 133 CompCas 894 , to say that suspension of legal proceedings in respect of dues against sick company applies only to such of those dues reckoned or included in the sanctioned scheme for rehabilitation.