9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (4) TMI 376 - AT - Insolvency and BankruptcyCIRP - Maintainability of Section 9 Application - rejection on the ground of pre-existing dispute - Appellant relying on the provisions of Section 194 (C) of the Income Tax Act, submits that deduction was made by Corporate Debtor under Section 194(C), after receipt of invoices by the Appellant - HELD THAT - The above submission of learned Counsel for the Appellant cannot be accepted for two reasons. Firstly, in a reply dated 13.06.2021, the Corporate Debtor has clearly indicated about the deduction under Section 194(C) as well as the credit of GST amount. In the reply it was stated that the Corporate Debtor was to issue debit/ credit note and the Operational Creditor has not settled the accounts for last five years for under-loading and overloading and demurrage charges debited by principal borrower, as Operational Creditor was required to adjust the amount. Thus, deduction under Section 194(C) cannot lead to conclusion that Corporate Debtor acknowledged the liability to pay the entire bills of the Operational Creditor. The dispute was raised by the Corporate Debtor, which is reflected in the letter dated 11.02.2021 referred by Appellant himself in his letter dated 22.04.2021 as well as the reply dated 13.06.2021. On examining of averments made in the reply dated 13.06.2021, which clearly indicate pre-existing dispute raised by the Corporate Debtor much before the Demand Notice dated 09.08.2021 was issued. The Adjudicating Authority did not commit any error in rejecting Section 9 Application on the ground of pre-existing dispute. There is no merit in the Appeal - appeal dismissed.
Issues Involved:
The judgment involves the challenge of an order passed by the Adjudicating Authority rejecting a Section 9 Application due to a pre-existing dispute between the Operational Creditor and the Corporate Debtor. Issue 1: Pre-existing dispute regarding outstanding dues The Appellant entered into an Agreement with the Corporate Debtor for handling CCL Coal. Disputes arose regarding non-payment of full invoices, with the Corporate Debtor claiming deductions due to demurrage charges imposed by the Principal Contractor. The Appellant issued a Demand Notice under Section 8 of the Insolvency and Bankruptcy Code, 2016, which was refuted by the Corporate Debtor. Subsequently, the Appellant filed a Section 9 Application for the outstanding amount, which was also refuted by the Corporate Debtor. The Adjudicating Authority dismissed the Section 9 Application citing the Corporate Debtor's prior communication of disputes to the Operational Creditor before the Demand Notice was issued. Issue 2: Existence of pre-existing dispute The Adjudicating Authority found evidence of a pre-existing dispute based on communications between the Operational Creditor and the Corporate Debtor before the issuance of the Demand Notice. The Corporate Debtor had clearly disputed the claims made by the Operational Creditor, indicating a disagreement over the outstanding dues. The Adjudicating Authority referenced specific letters and replies exchanged between the parties, highlighting the Corporate Debtor's refusal to acknowledge the full payment due to demurrage charges and penalties imposed by the Principal Contractor. Issue 3: Rejection of Section 9 Application The Adjudicating Authority's decision to dismiss the Section 9 Application was upheld, as it was determined that there was a clear pre-existing dispute between the parties regarding the outstanding amount. The Corporate Debtor had raised objections and disputed the claims made by the Operational Creditor before the Demand Notice was issued, indicating a lack of acknowledgment of the full payment due. The deduction made under Section 194(C) by the Corporate Debtor did not imply acceptance of liability, as the Corporate Debtor had explicitly raised disputes and issues regarding the outstanding dues prior to the Demand Notice. Conclusion: The Adjudicating Authority's rejection of the Section 9 Application was upheld due to the existence of a pre-existing dispute between the Operational Creditor and the Corporate Debtor. The communication and disputes raised by the Corporate Debtor before the issuance of the Demand Notice indicated a lack of agreement on the outstanding dues, leading to the dismissal of the Appeal.
|
