An Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with the Rule 4 of the Insolvency and Bankruptcy

(Application to Adjudicating Authority) Rules, 2016

IN THE MATTER OF:

Axis Bank Limited

… Financial Creditor/ Applicant.

Versus

Austin Distributors Private Limited

… Corporate Debtor/ Respondent.

Date of Pronouncement: 19th August, 2024.

Coram:

SMT. BIDISHA BANERJEE, MEMBER (JUDICIAL)

SHRI. D. ARVIND, MEMBER (TECHNICAL)

Appearance:

For the Financial Creditor:

Mr. Arif Ali, Adv.

Mrs. Ankita Singh, Adv. For Corporate Debtor:

Ms. Urmila Chakraborty, Adv.

Mr. Abir Lal Ghosh, Adv.

Mr. Siddhartha Chatterjee, Adv.

ORDER

PER Bidisha Banerjee, Member (Judicial):

1. This Court congregated through hybrid mode. 2. Heard the Learned Counsels for both parties.

Factual matrix:

3. This instant application is filed under Section 7 of the Insolvency and Bankruptcy Code, for brevity I&B Code, read with Rule 4 of the Insolvency and Bankruptcy (Application to the Adjudicating Authority) Rules, 2016, by “Axis Bank Limited”, hereinafter referred to as “Financial Creditor” (“Applicant”/ “FC”) against “Austin Distributors Private Limited”, hereinafter referred to as “Corporate Debtor” (“Respondent”/ “CD”) seeking direction to initiate Corporate Insolvency Resolution Process (for brevity “CIRP”) in respect of the Corporate Debtor.

4. Submissions of the Ld. Counsel for the Applicant:

4.1 The Learned Counsel appearing on behalf of the Applicant contends that the amount of default is a sum of Rs. 6,71,84,848.39/- including the principal amount, interest as on 04.08.2023 and the date of default is 18.02.2020.

4.2 It is submitted that on 04.08.2023 the financial creditor issued a demand notice upon the corporate debtor demanding a payment of Rs. 6,71,84,848.39/-, annexed as Exhibit “N”.

4.3 It is further submitted that despite receipt of the demand notice on

04.08.2023 the corporate debtor has not repaid the outstanding amount, and the corporate debtor has committed a default under the Insolvency and Bankruptcy Code, 2016.

4.4 It is contended that on 24.08.2023 the corporate debtor had responded to the said demand notice, and the corporate debtor had acknowledged the default on their part and shown their willingness to settle the dues through a one-time settlement. However, no steps have been taken till date with regards to such settlement of dues, and a copy of the response is annexed as Exhibit “O."

5. Per Contra the Corporate Debtor would allege as under:

5.1 The Learned Counsel for the Respondent would contend that the petition is not maintainable as the power of attorney (POA), allegedly executed by Axis Bank Limited in Favour of Shreya Dasgupta, lacks the signature of an authorized bank representative. Additionally, the document does not bear the common seal of the bank nor the signature of an authorized signatory. Hence the petition is defective.

5.2 It is claimed that the creditor’s claim is time-barred as the period of limitation expired on February 17, 2023, whereas the instant application was filed on November 9, 2023. Further, the date of default provided by the financial creditor is incorrect.

5.3 It is further submitted that the corporate debtor neither authorized the sales teams to offer any settlement to the financial creditor nor is the sales team authorized by law to offer any settlement on behalf of the company. However, the said settlement offer is null and void.

6. Rejoinder on behalf of Financial Creditor

6.1 It is stated that the power of attorney duly authorizing Shreya Dasgupta contains the common seal of the financial creditor along with the signature of an authorizing signatory, and the said power of attorney has been made in accordance with law.

6.2 It is submitted that the corporate debtor repeatedly refused to allow the audit of overdue bills and failed to provide the status of the stocks for the unpaid bills, despite several requests from the financial creditor.

6.3 It is further submitted that on 24.02.2020 as per the CSMSME meeting