Operational creditors must establish debt due and payable without disputes prior to demand notices for insolvency proceedings.

ORDER

PER: MAHENDRA KHANDELWAL, MEMBER (JUDICIAL)

1. This is a Company Petition filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (‘the Code’) read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 by M/s Ashoka Creations Limited (‘Operational Creditor’) for initiation of Corporate Insolvency Resolution Process (‘CIRP’) against M/s Lykos India Private Limited (‘Corporate Debtor’).

2. M/s Ashoka Creations Limited (Operational Creditor) is a company registered under the Companies Act, 1956 [CIN- U51909WB1988PLC045388, having its registered office at 204 Eastern Building, 19 R N Mukherjee Road, Kolkata, West Bengal - 700001. M/s Lykos India Private Limited (Corporate Debtor) is a company registered under the Companies Act, 1956 [CIN- U51101DL2013PTC262458], having its registered office at D-64, Defense Colony, New Delhi – 110024. The Corporate Debtor has Authorized Share Capital of Rs. 3,50,00,000 (Rupees Three Crore Fifty Lacs) and Paid-Up Share Capital of Rs. 3,45,77,800 (Rupees Three Crore Forty-five Lacs Seventy-seven Thousand Eight Hundred).

3. The present Petition was filed on 04.03.2020 before this Adjudicating Authority by the Operational Creditor, duly authorized to initiate Corporate Insolvency Resolution Process (“CIRP”) proceedings under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“Code’). The total amount claimed to be in default is Rs. 11,52,83,184 (Eleven Crore Fifty- two Lacs Eighty-three Thousand One Hundred Eighty-four) calculated till 20.02.2020 along with interest. The date of default is not expressly mentioned in the demand notice. However, there were multiple invoices raised by the Operational Creditor from 25.07.2016 to 30.01.2019.

4. Submissions by the Ld. Counsel appearing on behalf of the Operational Creditor

a) The Operational Creditor is a limited company incorporated under the provisions of the erstwhile Companies Act 1956, which used to manufacture and supply Copper Cathodes and Rods.

b) The Operational Creditor and the Corporate Debtor entered into a business relationship to supply Copper Cathode, which was based on the assurances, guarantees and representations of the Corporate Debtor. During the period 2016-2019 Operational Creditor supplied Copper Cathodes/Rods to the Corporate Debtor in lieu of which various invoices were raised by the Operational Creditor which were duly delivered to the Corporate Debtor. In lieu of the same, amount of Rs. 11,52,83,184/- is still pending (principal amount of Rs. 6,01,67,689/- + interest @27% of Rs. 5,52,15,495/-) and due on the part of the Corporate Debtor which is yet to be recovered from the Corporate Debtor.

c) The Corporate Debtor failed to clear the payment towards the goods supplied by the Operational Creditor. The Operational Creditor got issued Demand Notices dated 18.10.2019 & 22.10.2019 under Section 8 of the Code, which were duly served upon and replied by the Corporate Debtor.

d) The Operational Creditor had supplied Copper Cathodes to Corporate Debtor for which Rs. 6,01,67,689/- is due and Corporate Debtor arbitrarily and without intimation to the Operational Creditor adjusted the said amount with some third-party and this fact was disclosed to Operational Creditor by way of reply to the demand notice.

e) In reply to the Demand Notices dated 03.11.2019, the Corporate Debtor has neither raised any dispute qua quality of goods nor made any payment to the Operational Creditor. However, the Corporate Debtor contended that the payment