Chennai-based Landmark Housing fails to pay debt, faces insolvency

CHENNAI: Landmark Housing Projects Chennai Limited is facing insolvency as it has failed to pay debt worth Rs 13.49 lakh after it bought TMT steel from Jindal Steel. The second bench of National Company Law Tribunal (nclt), comprising of R Sucharitha, member (judicial) and B Anil Kumar, member (technical), admitted the insolvency petition on Thursday after Landmark Housing failed to pay the principal outstanding amount of Rs 13.49 lakh for the TMT steel which it had bought in May 2014. Jindal had claimed an interest of Rs 23.55 lakh as outstanding at the rate of 36 per cent per annum.

Appearing on behalf of Jindal Steel, K Gaurav Kumar submitted that, on November 1, 2019, a demand notice was sent to Landmark Housing, which acknowledged the ledger balance and confirmed the outstanding amount for financial years 2016-17, 2017-18 and 2018-19. However, it never made any move to make payment nor issued any reply resulting in Jindal Steel filing Insolvency and Bankruptcy petition against Landmark Housing.

However, Landmark Housing counsel Nathan and Associates submitted that the three invoices on October 9,  2014, November 11, 2014 and December 9, 2014, were not signed and sealed by the authorised signatory of Landmark Housing, rather it was signed by the purchase manager, who was not legally authorised to do so. It was alleged that Jindal Steel had colluded with the then purchase manager, who without any authority had signed and affixed a seal in the ledger without the knowledge of Landmark Housing.

However, this argument was dismissed by the judges. “It is pertinent to note that it seems to be only an allegation being made by corporate debtor to rebut the claim of Jindal Steel, which is not supported by any documentary  evidence,” the bench observed. The bench observed that Landmark Housing had not rebutted the sum which was due and payable to Jindal Steel, but raised a feeble defence, which was not supported by documentary evidence, that the purchase manager was not the authorised signatory of Landmark Housing.

In view of the observations, the bench admitted the application stating that the debt was due and Landmark Housing has defaulted in making payment. Since the rate of interest was not mentioned in the invoice, Landmark Housing was not entitled to interest at the rate of 36 per cent per annum, the order passed by the bench stated. It also stated that since Jindal Steel had not proposed an insolvency resolution professional, the bench was appointing Sanjeevi C as interim Resolution Professional.

The bench also passed a moratorium on institution of suits or continuation of pending suits or proceedings against Landmark Housing besides transferring, encumbering, alienating or disposing of its assets or any legal right or beneficial interest therein by Landmark Housing.

The bench also put a moratorium on any action to foreclose, recover or enforce any security interest created by Landmark Housing in respect of its property, including any action under Securitisation and Reconstruction of  Financial Assets and Enforcement of Security Interest Act, 2002.The order of moratorium shall have effect till the completion of the corporate insolvency resolution process or until the bench approves the resolution plan, the order stated.