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The National Company Law Tribunal, Mumbai, has slapped a cost of ₹10 lakh on Tata Chemicals for filing a petition fraudulently and with malicious intent to liquidate Raj Process Equipment and Systems Pvt Ltd.
In a scathing order, VP Singh, Member (Judicial), and Ravikumar Duraisamy (Technical) said Tata Chemicals’ claims against Raj Process Equipment and Systems do not fall within the definition of operational debt.
Tata Chemicals has filed a false affidavit to prove that the actual principal amount due is ₹9.19 crore instead of ₹4.40 lakh, said the order. Therefore, it added, the petition is dismissed with costs of ₹10 lakh to be paid by Tata Chemicals within 30 days in the account of the Prime Minister’s National Relief Fund.
Tata Chemicals had signed an agreement with Raj Process Equipment for designing, erecting and commissioning a double-effect evaporator at its Sirperumbudur plant in Tamil Nadu. The company paid ₹4.40 lakh as advance and the deadline for delivery was September 30, 2016.
Since Raj Process Equipment failed to deliver the evaporator, Tata Chemicals reclaimed the advance of ₹4.40 lakh and ₹9.15 crore toward financial loss. Counsel for Raj Process said it was ready with the machinery and the delay was on account of frequent changes in specifications by Tata Chemicals, which did not inspect the machine despite repeated requests.
The company also said that Tata Chemicals was not interested in lifting the machinery but only in making a claim. It insisted on renewal of bank guarantee and then autocratically terminated the purchase order, demanding a baseless and hyper-inflated claim of ₹9.15 crore, it said.
In its petition, Tata Chemicals submitted that it had advanced a principal amount of ₹9.19 crore, whereas the amount given was only ₹4,40,000. It even filed an affidavit in this regard.
“The assertion in the petition clearly shows that the petition has been filed on wrong facts to start Corporate Insolvency Resolution Process by giving false information and vouched for it by way of an affidavit,” said the order.
The Bench also reiterated that the claim for damages does not become operational debt until the liability is adjudicated upon and damages assessed by an adjudicating authority.
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