Bay Forge v. Nawa Engineers & Consultants

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

Relevancy of the case: Consideration of excel sheets as primary evidence and applicability of Section 65B in insolvency proceedings

Statutes & Provisions Involved:

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

Relevant Facts of the Case:

  1. Petitioner is aggrieved due to the non-payment of dues by the respondent. The amount due, as operational debt, is ₹ 46,02,625/- due on 24.01.2013. Further, 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.
  2. The amount due was for the purchase order that the respondent made for forged proof machine shafts.
  3. The respondent had agreed to make 100% payment to petitioner by issuing an irrevocable letter of credit of a nationalised bank payable at 60 days from the date of dispatch.
  4. The letter of credit was to be established immediately on receipt of inspection reports/readiness of the material along with the proforma invoice.
  5. The respondent on 30.03.2013 sent an email to plaintiff asking them to make the payment directly from them instead of from the line of credit.
  6. The plaintiff in good faith accepted the request of the defendant.
  7. The defendant has through emails dated 25.10.2013, 22.04.2014 and 17.02.2016 admitted their default on non-payment of outstanding dues.

Opinion of the Bench:

The court is convinced that a situation exists where the petition filed is in accordance with Section 9 of the Insolvency and Bankruptcy Code. The court is also convinced that the debt and default are proved.

Final Decision:

  1. The court allowed for recovery of property by owner or lessor where such property is held by the corporate debtor.
  2. The defence taken up under Section 65B of the Indian Evidence Act, 1872 to prove that the excel sheet is not a form of primary digital evidence was rejected.
  3. The court ordered to follow all provisions of the IBC as the insolvency proceedings were to begin.
  4. The IRP should give a chance to the defendants to be heard so that the principle of natural justice audi alter partum can be followed.

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