IN THE NATIONAL COMPANY LAW TRIBUNAL

NEW DELHI (COURT NO. IV)

Company Petition No. IB-121/ND/2019

(Under Section 9 of the Insolvency and Bankruptcy Code, 2016 Read with Rule 6

of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules,

2016)
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IN THE MATTER OF:

M/s SS POLYMERS
…Applicant/Operational Creditor

VERSUS

M/s KANODIA TECHNOPLAST LIMITED

…Respondent/Corporate Debtor
Pronounced on: 20.09.2019
CORAM:
DR. DEEPTI MUKESH
HON’BLE MEMBER (Judicial)
SHRI HEMANT KUMAR SARANGI
HON’BLE MEMBER (Technical)

For the Applicant : Mr. Ankit Singal, Mr. Achint Gupta, Adv

Ms. Arushi Bhardwaj, Adv.

For the Respondent : Mr. Pawan Kumar, Adv. Mr Surender, Adv.

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 MEMO OF PARTIES

M/s SS POLYMERS

Having its office at:

7E, Big Jos Tower, Plot No. A-8,

Netaji Subhash Place,

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Pitampura, New Delhi-110034

…Applicant/Operational Creditor

VERSUS

M/s KANODIA TECHNOPLAST LTD.

Having its registered office at:

A-54 Wazirpur Industrial Area,

New Delhi- 110052

…Respondent/ Corporate Debtor

ORDER

PER-SHRI 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

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 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

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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

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 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

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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

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 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

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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 “Code”) read with Rule 5 of the Insolvency

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 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

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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

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 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

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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.

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 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

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(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)

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 (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

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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.

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 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

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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

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 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

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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.”

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

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 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.

As per the orders of Hon’ble NCLAT in the case of Krishna

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19.

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.”
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 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

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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

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 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.

Sd/- Sd/-
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HEMANT KUMAR SARANGI DR. DEEPTI MUKESH

MEMBER (Technical) MEMBER (Judicial)

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