- (1.) The Petition under consideration is a transferred Petition from the Hon'ble High Court and thereafter requisite Form No.5 was submitted on 14th July, 2017 as an "Operational Creditor" for 'operational debt' of RS. 65,97,617/- /- (Rupees sixty five lakhs ninety seven thousand six hundred seventeen only) recoverable from M/s. Topworth Infra Ltd., Worli, Mumbai. On receiving the prescribed Form No. 5 and Demand Notice dated 11th July, 2017, the Respondent 'Corporate Debtor' has raised objection vide letter dated 22nd July, 2017. The Respondent has objected the admission of this Petition primarily on the ground that the debt in question was disputed by the Respondent Debtor, hence the remedy is not available under I & B Code.
(2.) Facts of the case, as narrated by the Ld. Counsel of the Petitioner, are that a Work Order dated 20th June, 2011 was executed and according to which services were provided at the project site on the agreed terms and settled rates. Our attention has been drawn on several Invoices which were raised by the Petitioner totalling Rs. 3,86,62,256/- (Rupees three crores eighty six lakhs sixty two thousand two hundred fifty six only) . Against those Invoices, part payments have been made, details are also on record. After appropriating the part payment, which is not in dispute, the Petitioner's claim is that balance Rs. 43,40,538/- (Rupees forty three lakhs forty thousand five hundred thirty eight only) remained payable and in spite of repeated reminders the alleged Debtor has not made any payment. Because of the said default, a Petition under the old Provisions of the Companies Act u/s 433(e) and u/s 434 for 'winding up' was filed before the Hon'ble High Court, which stood transferred as on date. As per the calculation of the Petitioner, the principal amount along with interest is stated to be as under:-
(3.) Our attention has also been drawn on one of the Work Orders dated 20th June, 2011 according to which the Corporate Debtor had awarded the Work Order for providing contractual services for unloading, fabrication, erection and alignment job for 2 x 35 MW power plant under Expansion of, CSPPL Project at Rajnandgaon, Chhattisgarh. The description of the job and the value was as under:- 3.2 As per the Contract, the completion period was on or before 20th December, 2012. Further, Clause 5 has provided that if the Contractor failed to complete the work within the prescribed period, it would be construed as a breach of the "Work Order". There was a right to recover from the Contractor the liquidated damages agreed to be 5% of the value of the Contract. Clause 6 of the Contract had specified that time was the essence for rendering the service under the "Work Contract". As per Clause 7 of "Terms of Payment", there was a provision of retention of Security Deposit to be released only on submission of Performance Bank Guarantee of 5% of Order value and a certificate from Offlcer-in-Charge certifying completion of work. 3.3 From the side of the Petitioner, it is vehemently contested that the Corporate Debtor had never objected the claim of the Petitioner, rather acknowledged the debt amount as is evidenced from one of the employees of the Company i.e. G.M., F&A, who has received the statement of the summary of the net amount payable to Lansh (Petitioner) . Since the debt had already been acknowledged; hence, it is unfair on the part of the Debtor to contest the Petition on the ground of maintainability, pleaded by the Ld. Representative. Even in the Books of Accounts of Topworth Infra Ltd. (Debtor) , the account of Lansh Engineering (Creditor) reflects a closing 46,15,638/- (Forty six lakhs fifteen thousand six hundred thirty eight only) for the accounting period ended on 31st March, 2015. 3.4 On the other hand, the Respondent has vehemently opposed the admission of the Petition and raised the "dispute" in the following manner:- "Lastly, our Client draws your attention to the mandate of the said work order whereby you were required to undertake the unloading, fabrication, erection and alignment job for 2 sets of 35 MW power plant under expansion at site of Crest Steel and Power Private Limited for the total consideration of Rs. 13,84,57,275/- (rupees thirteen crores eighty four lakhs fifty seven thousand two hundred seventy five only) . In connection therewith, it Is an undeniable fact that you have abandoned the mandate of the work order without completing even 20% or the original scope of work. Further, even with respect to the work executed by you, you have failed to undertake the same within the respective timeline of 18 months i.e. on or before 20 December 2012. Youwili appreciate that the said work order provides for the consequences in respect of your failure to comply with the time sensitive work order. Accordingly, your failure to comply with the obligation envisaged in Clause 4 (Contract Completion Period) of the said work order entities our Clients to the consequences provided under Clause 5 fVeiay in Completion of Work") of the said work order. Further our Client also states that you have wilfully and/or negligently failed to comply with Clause 2.2 (Obligation of the Contractor) of the said work order. The failure on your part under the said work order entitles our Client to certain claims for damages suffered by It which Is quantified to 10% of the amount of the said work order I.e. Rs. 1,38,45,727.50/-(Rupees one crore thirty eight lakhs forty five thousand seven hundred and twenty seven and fifty paisa only) ." 3.5 The argument of the Ld. Counsel of the Respondent is that the Petitioner had abandoned the work without even fully completing it, which caused substantial loss to the Company. The work was not completed within the time prescribed i.e. on or before 20th December, 2012. Our attention has been drawn on certain e-mails exchanged between the parties. On 17th October, 2013, Managing Director of Lansh Engineering ( Petitioner) had written that the permission be granted to carry out whatever fabrication remained incomplete so that 100% could be completed and the Invoices could be cleared by removing misunderstanding. It was requested that the execution be permitted for completion of halfway work not carried out. From the side of the Respondent Company, it was objected and also informed that the financial claims were not true. It was also informed to stop the work with immediate effect from 7th October, 2013. Ld. Counsel has thus explained that the Petitioner had admitted that the work was incomplete and it was left halfway causing great hardship to the Respondent. It is also informed that the Petitioner had admitted in that email that there was misunderstanding about the amount claimed which resulted into a serious dispute. Our attention has also been drawn on a correspondence of 12th September, 2013 to demonstrate that as and when the payment was demanded it was released so that the work should not suffer. Side-by-side, there was a discrepancy in the status of the account which was also the matter of discussion in those e-mails. The Respondent Company had informed about the delay in the progress of the project and also informed that there was mismatch of the net amount payable. According to the arguments all those admitted facts have thus clearly demonstrated that there was an existence of dispute.;