An Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 IN THE MATTER OF:

Prism Johnson Limited, RMC (India) Division, (CIN: L26942TG1992PLC014033), a company incorporated under the provisions of the Companies Act, 1956, having its registered office at 305, Laxmi Niwas Apartments, Ameerpet Hyderabad – 500016.

… Applicant/ Operational Creditor.

Verses Simplex Infrastructure Limited, (CIN: L45209WB1924PLC004969), a company incorporated under the Companies Act, 1956, having its registered office at Simplex House, 27, Shakespeare Sarani, Kolkata 700017.

… Respondent/ Corporate Debtor.

Date of Hearing: November 28, 2023.

Date of Pronouncement: December 15, 2023.

CORAM:

SMT. BIDISHA BANERJEE, MEMBER (JUDICIAL)

SHRI D. ARVIND, MEMBER (TECHNICAL)

Appearance:

For the Operational Creditor: Mr. Ratnanko Banerji, Sr. Adv.; Mr. P.K. Dutt, Adv.; Mr. Rupak Ghosh, Adv.; Mr. S.K. Dutt, Adv. and Mr. Syamantak Banerjee, Adv.

For the Corporate Debtor: Mr. Joy Saha, Sr. Adv.; Mr. Snehashis Sen, Adv. and Mr. Danyal Ahmed, Adv.

ORDER

Per: D. Arvind, Member (Technical)

1. This Court is congregated hybrid mode.

2. Heard the Ld. Sr. Counsels for both parties.

Factual Matrix:

3. This instant application has been filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, for brevity “I&B Code” by Prism Johnson Limited, RMC (India) Division, hereinafter referred to as Applicant/Operational Creditor against Simplex Infrastructure Limited, hereinafter referred to as Respondent/ Corporate Debtor seeking the direction from this Adjudicating Authority to initiate Corporate Insolvency Resolution Process, for brevity “CIR Process” in respect of the Corporate Debtor.

4. The Corporate Debtor is a company incorporated on December 19, 1924, having Nominal Share Capital of Rs. 75 Crore and Paid-up Share Capital of Rs. 11.47 Crore.

5. The amount claimed as default is Rs. 3,52,70610/- and interest calculated up to

27.08.2021 is Rs. 15,62,639/- totalling to amount of Rs. 3,67,70,249/-.

Applicant’s submissions:

6. The Learned Senior Counsel for the applicant submits, citing one of the invoices as an example which is annexed at Page 53 of the application to show that what has been claimed is a “shortfall claim” from September 2018 to November 2018. The invoices are raised for not meeting the contractual obligation of not lifting the agreed quantity of material by the Corporate Debtor. The claim has also been made for escalation of the price of goods supplied.

7. Learned Senior Counsel took us through Page 4 of the Work Order issued to the Applicant by the Corporate Debtor, which is in Annexure B to the application. In page 4 of the contract (annexed at page 35 of the application), it has been agreed upon that:

“MINIMUM ASSURED QUANTITY Total 1,00,000 cum qty for the Tenure of 30 months from the date of Amended Work Order.

Minimum assured concrete quantity per month is 3000 cum however is will be calculated based on Quarterly average. In case of shortfall in volumes, RMC shall be additionally compensated for the differential volume (9000 cum – Actual volumes produced in three consecutive months) @ Rs. 600/cum by Simplex in addition to payment for normal RA bill for actual quantity/volume of concrete produced.”

8. Learned Senior Counsel submits that since the claim arises out of the service work order, they are in the nature of “services” and the default of payment on such services would qualify for action under Section 9 of the I&B Code.

Respondent’s Submissions per contra:

9. Learned Senior Counsel for the Respondent submits that the instant proceedings against the invoices seeking “shortfall claim” would not qualify as operational debt as they are in the nature of compensation in accordance with the clause “Minimum Assured Quantity” of the work order dated 24.04.2018.

10. It is further submitted that in any event services rendered by the Operational Creditor suffered from