Page 449 - IBC Orders us 7-CA Mukesh Mohan

Order Passed Under Sec 7
By Hon’ble NCLT Chandigarh Bench

3. The "Financial Creditor" was incorporated on 04.12.2013 and in column No. 6 of Part-I of the
application, the name and address of the person authorised to accept service of the process is Mr.
Varghese Thomas, resident of Mumbai on the basis of resolution of the Board of Directors (Annexure

I(A). The respondent was incorporated as a company under the Companies Act, 1956 on 17.11.2008
having its registered office at Ludhiana. Therefore, the matter falls within the territorial jurisdiction of this

Tribunal. The certificate of incorporation is at Annexure I(B) (Colly).

4. It is stated that the "Financial Creditor" extended the Trade Finance Facility to the "Corporate Debtor"
to the extent of USD 600,000, for which the Agreement dated 01.01.2016 was entered into between the
parties. The Agreement is at Annexure I(D). The "Corporate Debtor" is referred to as the Seller in this

agreement. The Seller could make request for one or more Loans to be advanced by the "Financial
Creditor" The term "Loan" is defined in the agreement as, a loan made or to be made under the Facility or

the principal amount outstanding for the time being of that loan, such individual Joan never to exceed
80% of the purchase price on which the loan is provided. The 'Corporate Debtor' was to sell goods to its
buyers by shipments through the "Financial Creditor. The Trade Facility Agreement was executed with

the "Financial Creditor" for the purpose of pre-financing the sale of relevant goods. The 'Corporate
Debtor' accepted to assign all the rights to the purchase price under each purchase order as further set out
in clause 3 of the agreement.

5. The agreement further provides that upon the "Financial Creditor" receiving the purchase price, the
Spread less the outstanding shipping costs fees and interest payable to the "Financial Creditor" in
accordance with clause 6, was to be paid to the Seller "Spread" as defined in the agreement means, the

amount equalling the purchase price less the loan advanced to the respondent (Seller). All the
disbursement under the Facility was to be on a with recourse basis to the Corporate Debtor' (Seller). The
same is further evident from the fact that demand promissory notes dated 21.01.2016 and 30.03.2016

were executed in favour of the Financial Creditor. The demand promissory note dated 21.01.2016 was
invoked by the Financial Creditor vide legal notice dated 05.10.2016 Annexure I(U).

6. Now coming to the disputed transactions, a purchase order dated 07.12.2015 bearing No. 001 was
issued by the Corporate Debtor's buyer i.e. YM Power Supplies and Contractors Limited, copy of which

is Annexure I(E). The "Corporate Debtor" issued the invoice dated 21.03.2016 (page 54 of Paper Book)
bearing No. MPIL/120 amounting to USD: 185,200.00 to the buyer' located at Malawi.

7. Another purchase order dated 01.01.2016 was issued by the Corporate Debtor's buyer namely; M/s.

Yiannakis General Import and Export and consequent to that on 20.04.2016, the invoice bearing No.

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