ORDER

Per: Anuradha Bhatia, Member (Technical)

1. This is an application bearing C.P. (IB) No. 846/MB-V/2021 filed by Biltech Building Elements Limited, the Operational Creditor/Applicant, under Section 9 of the Insolvency & Bankruptcy Code, 2016 (hereinafter “Code”) seeking initiation of Corporate Insolvency Resolution Process (hereinafter “CIRP”) against Citadel Eco-Build Private Limited, Corporate Debtor claiming total outstanding amount of Rs.1,67,30,539/- (Rupees one crore sixty-seven lakh thirty thousand five hundred thirty-nine only) as on 01.07.2021.

2. The Date of Default is not clearly mentioned in Part-IV of the Petition.

However, the Operational Creditor submitted in Part-IV of the Petition that, the date 11.06.2019 is taken to be the defining date of the default as it was the first time when the Corporate Debtor defaulted against the payment due and continued doing so till 06.01.2020. The Petition is filed on 16.07.2021.

CASE OF THE OPERATIONAL CREDITOR:

3. The case of the Operational Creditor is that:

3.1 The Operational Creditor is a Public Limited Company and is one of the largest manufacturers of Autoclaved Aerated Concrete Blocks in India.

3.2 The Corporate Debtor has executed a Sales Distributor Agreement dated 21.03.2018 with the Corporate Debtor, for the purpose of identifying the Corporate Debtor as the Distributor of Autoclaved Aerated Concrete Blocks and Mortar, which were being manufactured by the Operational Creditor. As per the Agreement, the Corporate Debtor would place the Purchase Orders upon the Operational Creditor from time to time, for the material required by them, in furtherance to which the Operational Creditor shall make the supply.

3.3 The Operational Creditor submits that, the Corporate Debtor continued to place upon the Operational Creditor various purchase orders for the supply of Goods of different specifications from May 2019 till October 2020. These Purchase Orders were placed by way of formal Purchase Orders as well as verbally through phone calls and mails. Pursuant to the said Purchase Orders, the Operational Creditor fulfilled its obligations and successfully delivered the goods to the Corporate Debtor and subsequently raised various invoices.

3.4 The Operational Creditor issued invoices on mentioned purchase orders upon the Corporate Debtor on successful delivery of goods. As per the meeting held on 27.12.2019, the credit period of 21 days was revised to 35 days with effect from 01.01.2020 and hence, the other invoices raised from 01.01.2020 till 06.01.2020 reflect the payment terms of 35 days. The Corporate Debtor while accepting the delivery of goods without any dispute and further making use of it for its business arrangements and profits have completely failed to release the payment against a total of 365 invoices starting from 21.05.2019 to 06.01.2020, amounting to Rs.1,67,30,539/-.

3.5 The Operational Creditor submits that despite repeated reminders and requests to release payments against the outstanding invoices for duly availing the services of the Operational Creditor, without any impediments relating to either invoices or the quality of services, the said request was not complied with.

3.6 The Operational Creditor further submits that the Operational Creditor had supplied the goods to the Corporate Debtor till October 2020, even during the pandemic despite receiving no payments from the Corporate Debtor, in the interest of long- lasting business relationship. The Corporate Debtor had admitted its liability in a series of communication exchanged between Corporate Debtor and Operational Creditor. However, the Corporate Debtor has failed to release the pending due amount.

3.7 The Operational Creditor issued a Demand Notice dated 16.03.2021, in Form 3, upon the Corporate Debtor claiming total outstanding of Rs.2,22,15,681/- as on 16.03.2021, to be paid within 10 days from the date of receipt of the said Notice. The Counsel for the Operational Creditor submits that the Corporate Debto