Rajeswara Rao Vittanala, Member - (1.) The present Company Petition bearing CP (IB) 109/9/HDB/2017 is filed U/s 9 of IBC 2016 R/W Rule 6 of l&B (Application to Adjudicating Authority) Rules 2016 is filed by Dr. Reddy's Laboratories Limited by seeking to initiate Corporate Insolvency Resolution Process in respect of M/S. Inter Labs (India) Private Limited, under the provision of IBC 2016.
(2.) The Brief Facts, leading to the filing of present Company Petition are as follows: a) Dr. Reddy's Laboratories Limited (Petitioner Herein) is Registered under the provisions of Company Act 1956, M/S. Inter Labs (India) Private Limited (Respondent Herein) is Registeredunder the Provision of Companies act 1956. b) The Respondent Company is engaged inter alia in the business of manufacturing of Active Pharmaceutical Ingredients and intermediates. So it has approached the Petitioner for manufacture of the product. Accordingly, both have entered into Manufacturing and Supply Agreement on 25th May 2007 (referred to as Agreement herein after) for supply of Intermediates for Active Pharmaceuticals ingredients specifically 7-Chloro-1 etc to utilize their manufacturing facilities and supply manufactured material as per Quality stipulation and delivery schedules accordingly. c) As per said Agreement, the Respondent has to Manufacture and supply Product by Name "7-Chloro-1Cyclopropy-6-Flouro-1, Q-Acid" Etc. The Petitioner has to supply raw material to the Respondent at its own costs. And the Respondenthas to manufacture and supply the finished Products. d) For manufacturing the Product as per Agreement, the Petitioner supplied Raw Material from time to time but the Corporate Debtor/Respondent failed to supply finished products. It came to know that the Respondent disposed of Raw Material and Finished Products to third Parties instead of to Petitioner. So the Petitioner suffered Financial Losses. e) Since the Respondent was not adhering to time schedule as agreed in the said Agreement, the Petitioner issued a demand notice dated: 22/22/2013 by inter alia calling upon respondent to pay a sum of Rs. 11,52,98,673/- which was pending due as on 30/10/2013 within 15 days of receipt of Notice. f) In pursuant to the above notice, certainambunt was paid to Respondent, but later they have stopped paying the dues. The Corporate Debtor addressed a letter dated: 26/12/2014 to the Petitioner (Annexure 7 pg. 48) by stating that they were not able to do production properly due to so many reasons, and assured the Petitioner to reduce the outstanding by another letter dated: 02/01/2015 addressed to Respondent agreeing the proposal of the Respondent subject to certain terms and conditions with regard to supply of finished products and payment of outstanding amount. g) The Petitioner contented that they have complied with contractual obligation but whereas the Respondent breached the terms and conditions of the agreement. As per books of Accounts of Petitioner, there is an accumulated liability of Rs. 2, 73,20,633/- is due on the last date of Transaction, which is 24/11/2015. The Respondent, after re-conciliation of accounts, has admitted the debt of Rs. 2,64,41,770/-. h) When the Respondent failed to adhere to terms and conditions of Agreement under subsequent under taking/assurance, the Petitioner terminated the Agreement Dated; 25th May 2007 vide its letter dated 26/09/2016 addressed to Respondent. i) The Petitioner got issued a Demand Notice dated: 18/03/2017 to the Respondent, U/S 8(i) of IBC 2016 R/w. Clause (a) of sub rule (i) of rule 5 of l&B (Application to Adjudicating Authority) Rules, 2016. In pursuance to this Demand Notice, the Respondent got issued a reply dated: J.S] 27/03/2017 and the Petitioneragain got issued a rejoinder to if 1/ the Reply Notice vide its letter dated: 03/04/2017 by denying all the allegations made by Respondent j) Aggrieved by the Non-Payment of admitted debt, the Petitioner has filed the Present Petition by seeking to Initiate insolvency Resolution process against the respondent.
(3.) The Respondent has filed a reply affidavit dated: 28th July 2017, through its Managing Director namely D. Srinivasulu. The following are main contents raised in the reply;: (i) They have stated there are several triable disputes including claims and counter claims and some of the disputes are as under: (a) Short Supply of Raw Material by the Petitioner to the Respondent (b) Failure of supply good Quality raw materials by the Petitioner to the Respondent (c) Failure to comply with the requirement of placing orders for30MTofQ-AcidP.M (d) Illegal early termination of the Manufacturing and Supply Agreement dated: 25/05/2017 (e) Petitioner directed the Respondent to procure raw materials from 3rd parties because of its failure to supply raw materials for manufacturing of 30MT Q-Acid. (ii) The Manufacturing and Supply Agreement Dated: 25th May 2007 is not properly executed and it cannot be acted upon. They have denied that there is an outstanding amount to be paid to Petitioner, on the contrary, they have claimed that the Petitioner is liable to pay to them (Respondent) an impliedly admitted sum of Rs. 28,80,00,000/-. However, without paying this amount, the Petitioner illegally terminated a Agreement and initiated the present Proceedings. (iii) They have mentioned so many acts on their part of Petitioner, which resulted in losses to the Respondent. The letter dated: 26/12/2014 (Annexure -7) cannot be treated to one as an admission on the part of the Respondent for Payment of outstanding amount for Petitioner. (iv) It is stated that the Respondent raised disputes several times viz., 31/03/2011, 10/12/2011, 15/11/2011, 12/01/2012, 04/09/2012, 28/08/2013, 22/04/2014, and 13/07/2015, apart from others. However the Petitioner, by suppressing the above disputes, has filed the Present Petition. TheRespondent has explained several short comings on the part of the petitioner in supply of raw materials for 30MT Q-Acid. (v) The Respondent has also raised that the Supply agreement in Question was Illegally Terminated in violation of Clause 20(2) of the Agreement, which says that agreement can be terminated by either party with prior written notice of 90 days. The Respondent stated that they have issued a Arbitration Notice to Petitioner vide its letter dated: 11/04/2017, and there was no denial for the averments made in this notice.;