ORDER

Per: Kishore Vemulapalli, Member Judicial

1. This is an Application being C.P. (IB) No. 792/MB/C-IV/2021 filed on 15-02-2021 by North Agro Industries Private Limited, the Operational Creditor/Applicant, under section 9 of Insolvency & Bankruptcy Code, 2016 (I&B Code) against Mahindra and Mahindra Limited, Corporate Debtor, for initiating Corporate Insolvency Resolution Process (CIRP).

1.1 The total amount of debt claimed is 3,77,95,546 (Rupees Three Crore Seventy Seven Lakh Ninety Five Thousand Five Hundred Forty Six Only).

2. The Operational Creditor is the business of supplying machinery, like combine harvesters and tractors to buyers across the country. The Corporate Debtor regularly placed orders and purchase the aforementioned machinery from the Operational Creditor.

2.1 As per the commercial arrangement between the parties (a) the Corporate Debtor used to place orders with the Operational Creditor, (b) In terms thereof, the machinery was supplied by the Operational Creditor directly to the dealers of the Corporate Debtors, and (c) on delivery of the machinery, the Corporate Debtor was liable to release payments as per the invoice raised by the Operational Creditor.

2.2 Accordingly, from January 2015 March 2016, the Operational Creditor supplied machinery worth Rs. 1,47,65,400/- to the Corporate Debtor and 174 invoices for the said goods were raised from time to time for machinery supplied to the Corporate Debtor.

2.3 The Operational Creditor states that in spite of numerous reminders and communications, the Corporate Debtor delayed payments for one reason or another and as such has not released any payments till date. It is submitted that in terms of the invoice, the said amounts were incurring interest at 24% per annum from the due date.

2.4 The Operational Creditor further states that in the year 2017, on account of continued non-payment of dues, the Operational Creditor instituted a claim before Micro, Small & Medium Enterprises Facilitation Council, Punjab Camp at Chandigarh (’MSME Council’), and the Council referred the matter for Arbitration under Section 18(3) of the Micro, Small and Medium Enterprises Development Act, 2006. However, the Corporate Debtor has challenged this reference on ground of jurisdiction of Council to do so, and the same is still pending before Hon’ble Punjab & Haryana High Court.

2.5 Subsequently, the Operational Creditor sent several reminders to the Corporate Debtor requesting for repayment of the outstanding amounts. However, till date, no amounts have been repaid.

2.6 On 10.03.2020, the Operational Creditor was constrained to issue a Demand Notice under Sec.8 of I&BC, 2016 read with Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for the operational debt of Rs. 3,77,95,546/- (Rupees Three Crore Seventy Seven Lakh Ninety Five Thousand Five Hundred Forty Six Only), i.e. Rs. 1,47,65,400/- (Rupees one Crore Fourty Seven Lakh sixty five Thousand Four Hundred sixty nine only) as principal amount due and Rs. 2,30,30,146/- Rupees Two Crore Thirty Lakh Thirty Thousand one Hundred Forty Six Only) as interest thereon, till

25.02.2020.

2.7 The Corporate Debtor issued a reply to the demand notice dated

18.03.2020 rejecting the demand raised by the Operational Creditor on account of pending litigation between the parties before the Ld. MSME Council, Sangrur and Hon’ble High Court of Punjab and Haryana.

2.8 The Corporate Debtor vide email dated 31.05.2020 sought the details of the outstanding amounts due and payable to the Operational Creditor. It is submitted that on 05.06.2020, the Operational Creditor once again provided details of the outstanding balance amounts due and payable by the Corporate Debtor to the Operational Creditor vide email dated 05.06.2020. This clearly Indicates that disputes sought to be raised in 18.03.2020 the Reply dated were spurious, hypothetical and illusory. However, no payments have been forthcoming from the Corporate Debtor till date.

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