Bay-Forge Pvt. Ltd. v. Nawa Engineers & Consultants Pvt. Ltd.
In the National Company Law Tribunal at Hyderabad
CP (IB) 198/09/HDB/2017
Before Mr RR Vittanala, Member (Judicial) and Mr R Duraisamy, Member (Technical)
Decided on January 22, 2018

Relevancy of the case: Admissibility of computer data evidence for the purposes of Section 65B.

Statutes & Provisions Involved:

• The Information Technology Act, 2000 (Section 2(1)(o))
• The Insolvency and BankruptcyCode, 2016 (Section 9)
• The Indian Evidence Act, 1872 (Section 63, Section 65A, Section 65B)

Relevant Facts of the Case:

• Aggrieved due to the non-payment of dues by the respondent, the petitioner filed an insolvency case. The amount due as of 24.01.2013, as operational debt, is ₹ 46,02,625/-. Furthermore, an amount of ₹ 35,01,367/- was due as interest at a rate of 24% per annum from the due date and the first date of default was 30.03.2013.
• The amount due was for the purchase order that the respondent made for forged proof machine shafts.
• The respondent had agreed to make 100% payment to the petitioner by issuing an irrevocable letter of credit from a nationalised bank, payable 60 days from the date of dispatch.
• The letter of credit was to be established immediately on receipt of inspection reports/readiness of the material along with the proforma invoice.
• The respondent, in an email to the plaintiff, asked to allow them to make the payment directly instead of from the line of credit, which the plaintiff had agreed. The respondent then made part payments. Accordingly, the plaintiff filed demand notices asking for the payment of the outstanding dues.
• The respondent was thus insolvent and had filed for liquidation as per the Insolvency and Bankruptcy Code, 2016.
• The plaintiff had used data stored in a computer system, i.e., excel sheets containing books of debt or accounts ledger, to submit its claims of the respondent’s failure to pay its dues.

Prominent Arguments by the Advocates

• The petitioner’s counsel appointed the Insolvency Resolution Professional to handle the respective dues owed by the respondent as a Corporate debtor.
• The respondent’s counsel denied all contentions of the plaintiff. It submitted that the plaintiff, as an operational creditor did not comply with the data output electronic evidence requirements under Section 2(o), in compliance with Section 65B of the IT Act.

Opinion of the Bench:

• The adjudicating authority observed that the petition was according to the procedure under the Insolvency and Bankruptcy Code, 2016.
• Furthermore, the bench noted that despite the various contentions of the respondent, the settlement of debt was the subject in question. Since the settlement talks between the parties had failed, the bench had to settle the issue by initiating CIRP proceedings.
• Moreover, the bench noted the existence of the respondent’s debt which proved that the settlement of the debt was the subject in question.

Final Decision:

• The bench thus accepted the petition and appointed an interim resolution professional.

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