Court ruled that claimed interest under MSME Act is unadjudicated and the principal amount is below the minimum threshold for insolvency proceedings, precluding the initiation of Corporate Insolvency Resolution Process.

ORDER

(Heard through Hybrid Mode)

This Application under Section 9 of IBC has been filed by Balajee Structural (India) Private Limited, represented by its Director, Mr. Vishnu Kumar Agrawal, Petitioner/ Operational Creditor herein against Tamil Nadu Generation and Distribution Corporation Limited, Respondent / Corporate Debtor herein for initiating Corporate Insolvency Process (CIRP) against the Corporate Debtor.

2. SUBMISSIONS OF THE APPLICANT

2.1. Part I of the Application contains the particulars of the Applicant Balajee Structural (India) Private Limited, represented by its Director, Mr. Vishnu Kumar Agrawal. Part II of the Application sets out the details of the Corporate Debtor. It was incorporated on 01.12.20009 with paid up share capital of Rs. 2,00,61,17,65,730/- and address at NPKRR Maaligat (TNED Ofoce), 144 Anna Salai, Chennai, TN – 600 002, within the jurisdiction of this Tribunal. In Part III of the application, the Operational Creditor has not proposed anyone as the IRP. Part IV of the application sets out the details of the debt being Rs.8,13,92,546/- (Rupees eight crore thirteen lakhs ninety two thousand five hundred and forty six only) which comprises of the outstanding principal amount of Rs. 40,66,302/- and compound interest at the rate of 3 times the bank rate as notified by RBI from time to time amounting to calculated till 05.04.2022, further applicable till the date of realization of due amount in full, with date of default as 05.04.2022. This application has been filed on 20.02.2023.

2.2. It is submitted that the Applicant/ Operational Creditor is a Private Limited Company incorporated under the provisions of the Companies Act, 1956 and is duly registered as a Micro, Small and Medium Enterprise (MSME) under the MSMED Act, 2006, and is engaged in the business of manufacturing and supplying various grades and specifications of structural steel to government and private entities across India.

2.3. It is submitted that the Applicant had entered into a series of commercial transactions with the Respondent/ Corporate Debtor, Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO), which is also a Government owned Private Limited Company incorporated under the Companies Act, 1956.

2.4. Pursuant to a long-standing business relationship, the Corporate Debtor had placed several purchase orders upon the Applicant for the supply of iron and steel materials of varying dimensions and specifications, for the purposes of its multiple workstations situated at various thermal and hydro-electric stations across the State of Tamil Nadu.

2.5. It was further submitted that the Applicant, in compliance with the terms of the said purchase orders, duly delivered the required materials within the stipulated timeframes and without any default. Invoices corresponding to the supply of goods were raised by the Operational Creditor from time to time, which cumulatively amounted to a total principal value of Rs.1,23,92,62,052/- (Rupees one hundred twenty three crores ninety two lakhs sixty two thousand and fifty two only).

2.6. It is submitted that out of the aforesaid total amount, the Corporate Debtor is stated to have made substantial part-payments aggregating to Rs.1,20,75,30,967/-, thereby leaving a principal balance of Rs.40,66,302/- (Rupees forty lakhs sixty six thousand three hundred and two only) outstanding and unpaid, despite multiple communications and follow- ups. It is contended that the said outstanding amount became due and payable in terms of the agreed contractual terms and that the Corporate Debtor had not raised any objections or disputes regarding the quality, quantity, or timeliness of the goods supplied at any stage during the subsistence of the contractual relationship.

2.7. Further, it was submitted that as the Applicant is a registered MSME, the provisions of Section 15 of the Micro, Small