Ch. Mohd. Sharief Tariq, Member - (1.) Under adjudication is CP/500/(IB)/CB/2017 that came be filed by M/s. Phoenix Global DMCC (Operational Creditor, for short) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (I&B Code 2016, for short) read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority), Rules, 2016(the Rules, for short), on 11.05.2017. The Application has been filed against M/s. A & A International Trading Private Limited (Corporate Debtor, for short). In the Application, the Operational Creditor claimed that the outstanding debt is to the tune of USD 445416 which fell due on 03.02.2016 but the default occurred on 07.07.2015. The Operational Creditor has also sent the Demand cum Statutory Notice on 05.04.2017 with acknowledgement due that has been received by the Corporate Debtor and the Corporate Debtor has given reply to the same on 13.04.2017 wherein for the first time some issues pertaining to the inferior quality, foreign exchange loss, storage loss and other such losses relating to the consignment which was supplied by the Operational Creditor through the Vessel MV Yasa Unsal Sunar. But, the objections raised seem to be an afterthought and in disregard to the terms and conditions of the sale and purchase contract dated 02.03.2015. To make the factual position more clear the relevant detail is given in the following paras:-
(2.) The Corporate Debtor in this case had accepted the consignment at the port of discharge which has also been certified by the independent agency agreed to by both the buyer and seller. The Corporate Debtor after having accepted the consignment without any demur has claimed that the Sulphur content was more than specified in the agreement to sell which should have been within 0.70 or less, whereas it is mentioned in the Certificate of Analysis as 0.72 with respect to Sulphur content at the port of discharge.
(3.) The Corporate Debtor has raised Debit Note towards the cost of accepting the material which is not in conformity with the specifications based on the agreement. The price adjustment mentioned in clause 6 of the Sale Purchase Agreement is as follows :- "6. Price Adjustment. 6.1 The price is based on a Gross Calorific Value (GCV) on a "as received" basis and is calculated in Kcal/kg. If the GCV (ARB) of any shipment of Coal accepted by the Buyer is other than the typical GCV (ArB) set out in clause 2.1, the Base Price (as defined in clause 5) shall be adjusted up or down using the following formula (the "Price Adjustment Formula")". From this, it is clear that any price adjustment for the consignment received will have to be based on Gross Calorific Value (GCV) on as "received basis". Since the variation pointed out by the Corporate Debtor is only on Sulphur content and there has been no shortfall on that account. No price adjustment is permissible as per the Sale Purchase Agreement. The Corporate Debtor has also given the copies of many Debit Notes received by the Corporate Debtor to whom they have purportedly supplied and sold the Coal. However, there is no evidence on record to link it to the consignment received from the Operational Creditor.;