An Application Under Section 60(5) of Insolvency and Bankruptcy Code,

2016, read with rule 11 of the National Company Law Tribunal rules

2016

In the matter of:

Gujrat NRE Coke Ltd (In Liquidation) …Corporate Debtor

And

In the matter of:

Jeju Metals Pvt. Ltd. …Applicant

And

In the matter of:

Sumit Binani …Respondent/Liquidator

Coram:

Bidisha Banerjee: Member (Judicial)

D. Arvind: Member (Technical)

Date of Pronouncement: 12/08/2024 Appearance (via Hybrid Mode)

1. Mr. Krishnaraj Thaker, Adv ] For Liquidator

2. Mr. Rishav Dutt, Adv

3. Mr. Arjun Asthana, Adv 4. Ms. Sriparna Mitra, Adv

5. Mr, Sumit Binani, ] Liquidator in Person

6. Mr. Shaunak Mitra, Adv ] For Jeju Metals (P) Ltd.

7. Ms Shweta Poddar, Adv

ORDER

Per: Bench

1. This Court is convened through hybrid mode.

2. The Present I.A had been filed by the Jeju Metals Pvt. Ltd Limited seeking the following relief:-

a. The Respondent/Liquidator of the Corporate Debtor be directed to disburse/make payment of Rs 9.34 crore plus interest plus further interest till the date of payment as stated in para 25 (Annexure M)

of this Application which is due to the Applicant.

b. The Respondent/Liquidator of the Corporate Debtor be directed to treat as payment as referred in prayer (i) of this Application as part of Liquidation cost and follow the Waterfall Mechanism as provided under IB Code, 2016;

c. Declaration that the 4 Sales Contracts referred to in Para 9 of this Application have been frustrated and become infructuous;

d. Such further or other order or orders be passed and/or direction or directions be given as to this Hon’ble Tribunal deem fit and proper.

Submission on behalf of Learned Counsel appearing for Applicant:

3. The Corporate Debtor and Applicant (formerly known as Dhrupad Traders Pvt. Ltd) entered into contract of sales and purchase of coal bearing Contract No GNRE/2019/DTPL/001 (Hereinafter referred to as Initial Contract) wherein the Corporate Debtor under management of the Respondent agreed to purchase 10, 000 MT of Indonesia coking coal from Applicant at a base price of Rs 13,328 Per Metric Ton.

4. The Corporate Debtor had to lift the entire cargo within 90 days from the date of the contract. Failure on the part of Corporate Debtor to lift the cargo shall result in charging interest at the rate of 1.50% per month or part thereof will be charged extra on the balance outstanding to be lifted from the date of expiry of 90 days.

5. As on 01.11.2019 i.e after 9 months the Corporate Debtor have lifted only 200 MT of coal and the rest 9800 MT remained to be lifted. Because of this Corporate Debtor has liability of a Rs 15.43 crores towards the settlement of contract.

6. Because of the non-lifting of the coal, the quality of the coal deteriorated. At the same time the price of coal fall sharply in the international market. In addition to this, the Corporate Debtor also faced financial crunch. This resulted in nonpayment by Corporate Debtor.

7. With each passing day the liabilities of the Corporate Debtor was increasing because of the rent payable to port authorities and interest on unpaid amount. To further reduce the liabilities of Corporate Debtor, the Applicant at the request of the Respondent entered into the another contract dated 1^st November 2019 bearing contract No GNCL/DTPL/003, to purchase 9800 MT of coal back by the Applicant at the base price of Rs 6500 MT (Hereinafter referred to as Sales Back Contract”). This resulted in contract of amount of Rs. 6.37 crores.

8. Now subtracting the amount of Initial Contract and Sale Back Contract the Respondent is still liable to pay amount of Rs 8.39 crore. The details is given below:-

9. The Applicant after purchasing the coal from the Corporate Debtor through sale back contract was looking for a suitable plant to process the coal into Metcoke. The Respondent being aware of the requirement of the Applicant offered the plant of Corporate Debtor at Dharwad for Processing of Coal. For processing the coal, the Applicant and Corporate Debtor entered into coal processi