NCLT rejected the petition filed under Indo Alusys Industries Ltd. vs. SMW Metal Pvt. Ltd. NCLT held that the dispute raised by both the parties were in their counter petitions. Hence, resolution of the Corporate Debtor is not sustainable.
As there was cross petition hence in the first petition (I B 552(ND)/2017) Indo Alusys Industries Ltd prayed for initiation of Resolution Process against Corporate Debtor, SMW Metal Pvt. Ltd. Thereafter, another petition was filed by SMW Metal Pvt. Ltd.as Operational Creditor claiming the Principal amount of Rs. 2,43,34,100/- together with interest accruing thereon increasing the liability to an amount in excess of Rs. 4 Crore.
Both the companies had long standing business relations where Purchases and Sales were made on each other and a running account was maintained by them.
In December, 2015 both parties resorted to reconciliation of the accounts wherein credit notes were issued by SMW to Indo for a sum in excess of Rs. 24 Crores.
MOU was signed and payment was to be made during the period of 3 years
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The MOU was followed by an Indemnity Bond executed by SMW wherein Indo would not claim an amount beyond Rs. 2,46,34,100/- in future. Both the Companies’ Directors/Partners stood as personal Guarantors. Further agreed that Indemnity will stand good forever and shall not be revoked, cancelled or changed at any reason whatsoever in the future.
In 2014-2015 when first tranche of Rs. 8,86,67,626/- was getting adjusted SMW revoked the agreement stating the credit notes were in the nature of discount/benefit offered by SMW to Indo for subsequent purchases at competitive market rates as a special offer keeping in mind their long business relations which were never issued against any outstanding only conveyed for adjustment. Indo had failed to place adequate orders they were constrained to terminate the MOU.