9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (10) TMI 66 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT - Mere plain reading of the provision show that Section 5(6) define the Dispute whereas Section 8(2)(a) and (b) deals with existence of Dispute and mode to prove the repayment debt and that is the reason the Operational Creditor submitted that Corporate Debtor has taken both the plea i.e. Existence of Dispute as well as repayment of debt. As per the definition of Dispute, it is either existence of amount of debt or quality of goods or service or breach of representation or warranty - So far the contention of the Operational Creditor that Corporate debtor has not raised the quality of goods therefore, it is not a dispute is concerned, it is true that Corporate debtor has not raised the quality of goods but they raised the existence of amount of debt, which in our opinion, come under the definition of Dispute and this has been raised by the Corporate Debtor prior to the issuance of Demand notice and also in reply to the Demand Notice as required U/S 8(2)(a) of IBC. Operational Creditor has not stated anywhere about the notices, which are issued prior to the issuance of demand notice and it has come to the notice of Operational Creditor that Corporate Debtor is claiming upon the documents and on the basis of that documents, Corporate Debtor claimed that statement of accounts is confirmed and several correspondence have been made and there is no debt due as on 01.04.2018. Operational Creditor has not explain why they have not sent the rejoinder to the reply filed by the Corporate Debtor in response to the legal notice and why they have not disclosed about these documents in the main application, which have been referred in the reply to the legal notice dated 11.08.2018 rather Operational Creditor raised this issue that these documents are forged and fabricated, when Corporate Debtor appeared and filed the reply and enclosed all the documents along with the reply. In the present case, the Corporate Debtor has enclosed documents prior to the issuance of demand notice and all these documents referred by the Corporate Debtor in the reply to the legal notice dated 28.08.2018, therefore, before issuance of demand notice or before filing this application, Operational Creditor was aware with the facts that the Corporate Debtor are placing reliance upon these documents and on the basis of that Corporate Debtor claimed that there is no outstanding due, which is payable by the Corporate Debtor to the Operational Creditor as confirmation of accounts have been settled between the parties and one M/s. Prominent Metals Pvt. Ltd. But Operational Creditor has not referred this facts in the application but after filing of the Reply by the Corporate Debtor this plea has been taken by the Operational Creditor that those documents are forged and fabricated and signed by the persons, who are not authorised to sign, therefore, we can safely say the documents upon which Corporate Debtor placed reliance their genuineness is disputed by the Operational Creditor themself. There are pre-existing dispute raised by the Corporate debtor and even Operational Creditor raised the dispute regarding the genuineness of documents - Application dismissed.
Issues Involved:
1. Existence of Operational Debt 2. Default in Payment 3. Pre-existing Dispute 4. Authenticity of Documents 5. Jurisdiction and Scope of Adjudicating Authority Issue-wise Detailed Analysis: 1. Existence of Operational Debt: The Operational Creditor, a private company, supplied Aluminum Ingots and Wire Rods to the Corporate Debtor, another private company. The invoices for these supplies, dated from 25.12.2017 to 22.01.2018, amounted to ?13,07,50,666/-. The Operational Creditor claimed that despite fulfilling its obligations, the Corporate Debtor defaulted on payments. Interest at 18% per annum was added to the principal amount, bringing the total claim to ?14,25,18,256/-. 2. Default in Payment: The Operational Creditor alleged that the Corporate Debtor failed to clear the outstanding debt despite repeated requests and reminders. A Demand Notice dated 27.10.2018 was sent, which included the principal debt and accrued interest. The Corporate Debtor responded on 05.11.2018, denying any outstanding amounts and citing a non-existent settlement and reconciliation of accounts allegedly on 31.03.2018. 3. Pre-existing Dispute: The Corporate Debtor contended that a notice of dispute was issued on 27.08.2018 in response to a legal notice dated 11.08.2018 from the Operational Creditor. The Corporate Debtor claimed that no amounts were outstanding and that the invoices did not stipulate an interest rate of 18% per annum. The Corporate Debtor also argued that the Operational Creditor had concealed the notice and reply, which raised a dispute about the debt's existence. 4. Authenticity of Documents: The Corporate Debtor provided various documents, including confirmation letters and ledger entries, to support their claim of settled accounts. The Operational Creditor challenged these documents as false, forged, fabricated, and signed by unauthorized personnel. The Tribunal noted that the Operational Creditor did not disclose the earlier notices and replies in their main application, raising questions about the authenticity of the documents. 5. Jurisdiction and Scope of Adjudicating Authority: The Tribunal referred to Section 5(6) and Section 8 of the Insolvency and Bankruptcy Code (IBC), which define "dispute" and outline the procedure for handling demand notices. The Tribunal emphasized that its jurisdiction under Section 9 of the IBC is limited and does not extend to adjudicating the authenticity of disputed documents. The Tribunal cited the Supreme Court's decision in Mobilox Innovations Private Limited vs. Kirusa Software Private Limited, which held that the adjudicating authority must reject an application if there is a plausible contention of a dispute requiring further investigation. Conclusion: The Tribunal found that the Corporate Debtor had raised a pre-existing dispute supported by documents prior to the issuance of the demand notice. The Operational Creditor's challenge to the authenticity of these documents further indicated a dispute. Given the limited jurisdiction of the Tribunal under Section 9 of the IBC, it concluded that the existence of a pre-existing dispute warranted the rejection of the Operational Creditor's application. Order: The application was dismissed.
|
