NCLT rules in favor of Uni-President Vietnam Company The Tribunal held that allegations of the Gayatri Sea Foods Pvt Ltd about supply of substandard shrimp feed was an afterthought The National Company Law Tribunal (NCLT) Hyderabad, through two-member bench comprising of K Anantha Padmanabha Swamy, Member (Judicial), and Veera Brahma Rao Arekapudi, Member (Technical), admitted the...
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NCLT rules in favor of Uni-President Vietnam Company
The Tribunal held that allegations of the Gayatri Sea Foods Pvt Ltd about supply of substandard shrimp feed was an afterthought
The National Company Law Tribunal (NCLT) Hyderabad, through two-member bench comprising of K Anantha Padmanabha Swamy, Member (Judicial), and Veera Brahma Rao Arekapudi, Member (Technical), admitted the petition in the case of Uni-President Vietnam Co. Ltd vs. Gayatri Sea Foods Private Ltd., for default of Operational Debt by the respondent/Corporate Debtor (CD) - Gayatri Sea Foods Pvt Ltd.
The NCLT upheld the claims contended by the petitioner Uni-President Vietnam Co. Ltd, a Vietnamese prawn feed supplier company against the CD, a shrimp farming farm based in Bhimavaram and initiated the corporate insolvency process against the shrimp firm for failing to clear the dues it owed to the Vietnamese firm.
The order was passed on 13 January 2021 after hearing the petition filed by Uni-President Vietnam Company which stated that it had supplied prawn feed worth Rs 1.58 crore in two consignments in March 2018 to Gayatri Seafoods and Feeds company, Bhimavaram.
The petitioner vehemently argued that despite repeated reminders, the respondent's company never reverted nor paid the cost of the feed. Hence, they filed the petition before the NCLT under Section 9 of Insolvency and Bankruptcy Code, 2016, read with Rule 6 of Insolvency and Bankruptcy (application to the Adjudicating Authority) Rules, 2016 (Rules) seeking admission of the petition, initiating of Corporate Insolvency Resolution Process (CIRP), granting moratorium and appointment of Interim Resolution Professional as prescribed under IBC, 2016 and Rules.
The respondent company in its argument said that it received substandard feed due to which it incurred losses. Respondent contended that they received huge complaints from the farmers who used the prawn feed due to the bad quality sent by the petitioner and resulting in which they sustained huge losses by using and reselling the products to farmers. Despite assuring that it will replace it with fresh and flawless stock, the petitioner failed to provide the same, it alleged.
The Tribunal went through the record and found that while the Vietnamese company had produced documentary evidence to all its claims, however, the Bhimavaram company failed to substantiate its allegations with any evidence.
The Tribunal noted that there was an agreement between both the parties for the supply of feed from Vietnam. The Tribunal recorded the contention of the petitioner that the borrower company from Bhimavaram sent an email to Vietnam admitting dues, and hence it cannot contradict them in the present case.
The bench remarked, "The argument about substandard feed supply and the consequent losses suffered by the shrimp firm looks like an afterthought", and appointed Kasi Srinivas as an insolvency resolution professional.
The NCLT concluded that the petitioner/Operational Creditor was yet to receive his dues from the Corporate Debtor. The submission made by the CD were not convincing and accordingly the application for CRIP of the Operational Creditor was admitted.
The bench declared a moratorium under Section 14 of the IBC, 2016 and restrained all lenders to proceed further against the Gayatri Sea Foods Private Ltd., shrimp firm during the process of insolvency resolution.