9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (6) TMI 852 - AT - Insolvency and BankruptcyCIRP - Admissibility of application - pre-existing dispute - disputes were not raised prior to the issuance of the Demand Notice - disputes regarding the performance of the Engine and the quality of the spares that were supplied - HELD THAT - It is clear that the service recipient agrees to make payment irrespective of the fact whether the said engine is in operation or not at the time of the payment dates as above. This term categorically binds the Corporate Debtor to the payment of instalments. It is found that no dispute regarding the quality of the spares was raised as on 11/09/2019. The MoU is dated 11/07/2018, the first supply of spare parts was made on 23/10/2018 and this email is dated 11/09/2019, from which it can be noted that a period of more than 13 months has lapsed. So, the contention of the Learned Counsel that it is only after the lapse of some time that the Engine efficiency can be ascertained and therefore, the lapse of 13 months from the date of supply of spare parts and 7 months of the Engine being made operational on 03/04/2019 for raising any dispute is justified, cannot be accepted. In the instant case, the material on record evidences that the dispute raised is spurious, hypothetical and illusory as it was raised only after several months of supply and further there was also a Meeting, whereby there was an attempt to make a part payment. At this juncture, this Tribunal pertinently points out that although the reply of the Corporate Debtor was not taken on record by the Adjudicating Authority , all the issues raised by the Appellant have been addressed. The case of the Appellant that it was only after a lapse of some time that the engine efficiency can be ascertained and therefore, the lapse of 13 months in raising the dispute of the spare parts is justified cannot be sustained as there is no specific time frame which is established by way of technical specifications to be guided by / or which were mentioned in the MoU with respect to this issue. The fact remains that the spare parts were supplied way back on 25/10/2018 and the first issue was raised almost 11 months thereafter. There is nothing on record to establish that 11 months time is required to ascertain the efficiency of an engine - this Tribunal is of the considered opinion that the dispute raised by the Corporate Debtor is only illusionary and moonshine. There are no substantial grounds to interfere with the Order of the Adjudicating Authority and hence this Appeal fails - appeal dismissed.
Issues Involved:
1. Validity of the admission of the Section 9 Application under the Insolvency and Bankruptcy Code, 2016. 2. Existence of a pre-existing dispute between the parties. 3. Interpretation of the Memorandum of Understanding (MoU) and its payment terms. 4. Performance and quality issues related to the supplied spares and maintenance services. Summary: 1. Validity of the Admission of the Section 9 Application: The challenge in this Company Appeal was against the Impugned Order dated 21/03/2022, passed by the National Company Law Tribunal (NCLT), Chennai, admitting the application filed by the Operational Creditor under Section 9 of the Insolvency and Bankruptcy Code, 2016. The NCLT observed that the Corporate Debtor's inability to pay due to lack of revenue does not constitute a 'dispute' under Section 8 of IBC, 2016. The debt amount claimed by the Operational Creditor was within the pecuniary limit set by the central government, and the default occurred before the Covid-19 pandemic, making Section 10A inapplicable. 2. Existence of a Pre-existing Dispute: The Corporate Debtor argued that there was a pre-existing dispute regarding the quality and performance of the spares supplied and the maintenance services provided. They cited various emails and communications highlighting issues such as defective spares, high lube oil consumption, and valve wear. The Corporate Debtor relied on the Supreme Court judgment in 'Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software Pvt. Ltd.' which states that the Adjudicating Authority must reject the application if a pre-existing dispute truly exists. 3. Interpretation of the MoU and Its Payment Terms: The MoU dated 11/07/2018 between the parties included payment terms that required the Corporate Debtor to pay the dues irrespective of whether the engine was operational. The Operational Creditor argued that the MoU was a pure contract for the supply of spares, and the Corporate Debtor had agreed to make payments as per the schedule, regardless of the engine's operational status. The Corporate Debtor contended that the payments were dependent on the commercial viability of the engine. 4. Performance and Quality Issues: The Corporate Debtor raised issues about the performance of the engine and the quality of the spares supplied, citing emails from 2019 and 2020. They claimed that the spares had material defects and did not suit their engine, leading to high lube oil consumption and valve wear. The Operational Creditor countered that these issues were raised long after the supply of spares and that the Corporate Debtor had admitted to the debt in earlier communications. Judgment: The Tribunal found that the dispute raised by the Corporate Debtor was spurious, hypothetical, and illusory, as it was raised several months after the supply of spares. The Tribunal noted that the MoU stipulated strict payment terms, and the Corporate Debtor had admitted to the debt in emails dated 11/09/2019. The Tribunal concluded that the dispute was not genuine and upheld the NCLT's decision to admit the Section 9 Application. The appeal was dismissed, and the connected pending interlocutory applications were closed.
|
