NCLT Kolkata (20.05.2020) In Foseco India Limited Vs Om Boseco Rail Products Limited, [CP(IB)No.1735/KB/201] held that; It is a well settled law that a statute is presumed to be prospective unless it is held to be retrospective, either expressly or by necessary implication. When the amendment to section 4 of IBC was, inserted a proviso enhancing the pecuniary jurisdiction for filing applications as against small and medium scale industries nowhere in the notification mentioned that its application will be retrospective. Therefore, it appears to me that the amendment shall be considered as prospective and not retrospective.
Excerpts of the order;
The applicant Foseco India Limited, filed this application under Sec.9 of the Insolvency and Bankruptcy Code, 2016 (in short B Code) for initiation of corporate insolvency resolution process against the corporate debtor, viz., Om Boseco Rail Products Limited for the alleged default in payment of operational debt to the tune of Rs.90,00,919.10 (Rupees Ninety lakh nine hundred nineteen and paise ten only).
# 2. Brief facts of the case, for our consideration of the application are the following: - The Operational Creditor is a company engaged inter alia, in the business of manufacturing and supply of chemicals and allied products related to foundry and steel industries, such as, resins, coating for ferrous and non-ferrous foundries, sleeves, fluxes, metal treatment products of foundries. The corporate debtor regularly purchased various foundry and chemicals generally on creditor basis, the credit period being 30 days which was relaxed for another 15 days beyond the usual credit period as mentioned in the invoices. The operational creditor also granted 7 days as transit period for payment by post dated cheques. However, the corporate debtor failed to make any payment against outstanding debt.
# 3. It appears from the record that the materials supplied to the corporate debtor were retained and used by the corporate debtor. All these are reflected in the invoices, the details of which are provided in Annexure A annexed with the application.
# 4. The corporate debtor never raised any grievances regarding quality or specification or any other aspects of the material supplied to them by the operational creditor. The corporate debtor has failed to make payments against several invoices raised by the operation creditor from 3/12/2018 to 11/7/2019 against supply of the materials.
# 5. The total outstanding debt receivable from the corporate debtor as on 31/7/2019 is Rs.90,00,919.10 (ie. Principal amount of Rs.78,52,663.00 + interest Rs.11,48,256.10) on the basis of which a demand notice was issued. It appears from the record that there have been a series of correspondence between the operational creditor and corporate debtor in respect of the aforesaid debt, copies of which are annexed with the application as Annexure 10A to 10L It appears from the said correspondences that the corporate debtor has always accepted and agreed to make payment of the outstanding debt and has never raised any dispute whatsoever.
# 6. The corporate debtor failed to make payment of the relevant debt and, as such, the operational creditor served a demand notice as prescribed under the Rule. The demand notice was served on the corporate debtor on 1/8/2019. Copies of the demand notice, speed post receipt and proof of delivery of service are annexed with the application as Annexure 12.
# 7. In response to the said demand notice, the operational creditor has not received any reply from the corporate debtor. The operational creditor further submits that there is no pre existence of any dispute or pendency of any suit or arbitration proceedings filed before by the corporate debtor in relation to any such dispute.
# 8. Corporate Debtor though was called absent and declared ex-parte,vide order dated 17th January,2020 the application CA (IB)No.107/KB/2020 was allowed by setting aside and the ex-parte order with a direction to pay cost of Rs. One lakh and submits reply within 10 days from the date of the order.Despite granting time the CD has chosen not to contest this application for the reason not Brought to the notice of this bench.
# 10. The Central Government by notification dated 24.03.2020 enhanced the minimum amount of default limit from one lack to I crore for initiating CRP as against small and medium scale industries. So question raised by the Ld. Counsel is that whether Notification u/s 4 of the Code raising the minimum default limit be applicable to the applications pending for admission? It is a well settled law that a statute is presumed to be prospective unless it is held to be retrospective, either expressly or by necessary implication. When the amendment to section 4 of IBC was, inserted a proviso enhancing the pecuniary jurisdiction for filing applications as against small and medium scale industries nowhere in the notification mentioned that its application will be retrospective. Therefore, it appears to me that the amendment shall be considered as prospective and not retrospective. The facts in the cited decisions are not at all similar to the facts in the case in hand and hence not helpful to strengthen the said submission on the side of the CD. In the view of the matter, I do not find any illegality in pronouncing the order on today through VC.
# 9. This is an application filed under Sec.9 of B Code for initiation of corporate insolvency resolution process against the company who is dealing with business of manufacturing and supply of chemicals and allied products related to foundry and steel industries, such as, resins, coating for ferrous and non-ferrous foundries, sleeves, fluxes, metal treatment products of foundries.
# 10. According to the Ld P CS for the operational creditor, since the corporate debtor failed to pay the amount, it is entitled to claim the amount due to the tune of Rs.90,00,919.10. None of the invoices contains the terms stipulating the corporate debtor to pay interest for the delayed payment of the amount found due to the operational creditor. The corporate debtor having not disputed its liability, the amount as claimed by the operational creditor towards the material cost less the interest is found due and payable by the corporate debtor.
# 13. In compliance of Sec.9(3) (b) of IB Code, 2016, the applicant has produced an affidavit, and a statement of bank account also seen produced on the side of the operational creditor in compliance of section 9 (3) (C). Therefore, all the requirements are made out in the case in hand. The operational creditor has also proposed the name of Resolution Professional, Shri Amit Choraria, Registration No.IBBI/IP A-001/IP-P01345/2018-2019/12129. Written communication under Form 2 reveals that there is no disciplinary proceedings pending against the proposed IRP. That being so, the operational creditor succeeds in proving that the application under sub-sec.(2) of Sec.9 of B Code 2016 is complete; that there is no payment of the unpaid operational debt and that there is service of demand notice with invoices. Despite receipt of the demand notice, there is no payment on the side of the corporate debtor, no pre-existing dispute, also alleged or proved. The Ld. Counsel for the CD not raised any dispute at the time of hearing ,other than his request for time to settle the matter. There is no disciplinary proceedings pending against the RP proposed under sub-sec.(4) of Sec.9 of B Code, 2016 and accordingly this application is complete and therefore, liable to be admitted.
# 14. In view of what is stated above, this application is admitted . . . . . .
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