The Principal Bench of the National Company Law Appellate Tribunal (NCLAT) has held that the claim return of stock from the Corporate Debtor (CD) without any solid documentary evidence is invalid.
The Appellants Gurudeo Exports Corporation Private Limited (GECPL), Shree Kalka Global (SKG), Neon International Traders (NIT) and TLS Mercantile Pvt. Ltd. challenged the common ‘impugned order’ under Section 60(5)(c) of the Insolvency and Bankruptcy Code (Amendment) Act, 2021, wherein by the ‘Appellants’ herein filed the joint application against the ‘Resolution Professional’ of ‘Amira Pure Foods Private Limited’ (‘Corporate Debtor’).
The ‘Resolution Professional’ had rejected the claims of all the four applicants, who have petitioned the ‘Resolution Professional’ to settle their claims, by a common e-mail dated 06.11.2019. The four Petitioners sought the return of stock of their owned rice from the ‘Corporate Debtor’.
It was submitted that under oral business agreements since 01.10.2016, the ‘Appellants’ used to purchase rice from various suppliers across the country and delivered rice directly from their suppliers to the ‘Corporate Debtors’.
The ‘Appellants’ further submitted that it was a broad understanding between the parties that after carrying out the job work, the ‘Corporate Debtor’ would retain 3% of the rice delivered and return 97% of the processed rice to the ‘Appellants’. It was argued that the supply of rice to the ‘Corporate Debtor’ was to clean, sort and pack the rice delivered by the ‘Appellants’ and to sell the rice packages directly from the premises of the ‘Corporate Debtor’.
The ‘Appellants’ submitted that the ‘Corporate Debtor’ gave several documents to the ‘Appellants’ which support their claims including ‘rice purchase invoices’, ‘material receipts’, ‘e-mails’, ‘affidavit provided by an ex-employee of the ‘Corporate Debtor’ about receipt of the materials’, ‘consignment notes’, etc.
It was evident that although purchase & export invoices have been provided by these vendors there are so many anomalies including non-compliance with applicable laws and non-recording of transactions with APFPL in the books of accounts of these 4 vendors.
A two-member bench comprising Justice Rakesh Kumar Jain,(Judicial Member) and Naresh Salecha,(Technical Member) observed that no records of transactions have been reported by the ‘Appellants’ in their financial statements or stock registers.
It was viewed that no concrete evidence or documentary proof is available to substantiate the claims of the ‘Appellants’.
The authority thus held that the claims of the ‘Appellants’ at the stage of ‘Resolution and now Liquidation’ proceedings cannot be accepted in the absence of solid documentary evidence. While allowing the appeal, the authority upheld the ‘impugned order’.
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