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2020 (10) TMI 493 - 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 - This Bench has gone through the details of payment with the statement of account of the Corporate Debtor maintained with the Corporation Bank. It is found that the payment was made from the bank account of the Corporate Debtor except for two transactions i.e. Invoice No. 1800915 and Invoice No. 1800890 wherein the Corporate Debtor have submitted that they have availed loan from HDFC Bank and the payment was made in full. This Invoice wise payment made by Corporate Debtor was not denied by the Petitioner but it is submitted that the statement of account(Ledger account) maintained by the Petitioner shows that there is balance due payable by the Corporate Debtor. It is also submitted that the payment was on account. However, such submission cannot be accepted in view of the fact that each invoice is based on separate purchase order and payment has been made towards individual invoices. Coming to the second portion of the claim where some rental dues were claimed, the statement of account produced by the Corporate Debtor (Page No. 55 of the reply) reveals that there is no outstanding payable by the Corporate Debtor. When we go through the ledger account of the Corporate Debtor in the books of the Petitioner, it shows a balance of ₹ 3,26,389/- as receivable from the Corporate Debtor but the Invoice No. SP2/1900009 dated 03.04.2018 for ₹ 1,98,949/-, as claimed in the petition is not even reflecting in the statement of account, hence, the claim under this invoice cannot be accepted. As far as the other invoice no SP2/1900165 dated 16.04.2018 for ₹ 1,27,440/- is reflecting in the statement of account produced by the Petitioner (Page No. 50 of the Petition) but the same is not reflected in the statement of account of the Corporate Debtor (Page No. 55 of reply). In view of this, this claim also fails. It is established that there is a clear dispute relating to the quality of goods as provided u/s 5(6)(b) of the Code - Petition dismissed.
Issues Involved:
1. Existence of outstanding operational debt. 2. Pre-existing disputes regarding the quality of goods supplied. 3. Payment of rental dues for hired machinery. Issue-wise Detailed Analysis: 1. Existence of Outstanding Operational Debt: The petitioner, Action Construction Equipment Limited, filed a petition against Capacit'e Infra Project Limited under Section 9 of the Insolvency and Bankruptcy Code, 2016, alleging a default in payment amounting to ?1,00,22,471/-. This claim included ?77,52,435/- for the sale of machinery and ?18,95,326/- as interest on delayed payments. The petitioner provided detailed calculations and submitted that a demand notice was sent on 03.06.2019, demanding the dues. The corporate debtor contended that there was no outstanding debt as claimed. They provided invoice-wise details of payments made, asserting that all payments were completed and no dues were pending. The tribunal reviewed the payments and found that the payments were made from the corporate debtor’s bank account, except for two transactions paid through an HDFC Bank loan. The tribunal concluded that the corporate debtor's contention of having made all payments was true, and thus, there was no debt as claimed by the petitioner for the first portion of the claim. 2. Pre-existing Disputes Regarding the Quality of Goods Supplied: The corporate debtor raised several disputes regarding the quality of the goods supplied, specifically mentioning issues such as the failure of welds in cranes, missing standard accessories, and quality failures in wire ropes. They provided emails dating back to 2015 and 2017, highlighting these issues and asserting that these disputes were pre-existing before the demand notice was issued. The tribunal noted that these disputes fell under the ambit of Section 5(6) of the Code, which includes disputes related to the existence of debt, the quality of goods or services, or the breach of a representation or warranty. The tribunal referred to the Supreme Court judgment in Mobilox Innovations Pvt. Ltd. v/s. Kirusa Software (P) Limited, which mandates the rejection of an application if there is a plausible contention requiring further investigation and the dispute is not spurious, hypothetical, or illusory. Applying this law, the tribunal found that there was a clear dispute relating to the quality of goods, thus necessitating the rejection of the petition. 3. Payment of Rental Dues for Hired Machinery: The second portion of the claim related to rental dues for machinery hired by the corporate debtor. The petitioner claimed ?3,26,389/- as outstanding rental dues. However, the corporate debtor provided a statement of account showing no outstanding rental dues. The tribunal found discrepancies in the petitioner's statement of account, noting that certain invoices claimed were not reflected in the statement of account. Consequently, the tribunal concluded that the claim for rental dues also failed. Conclusion: The tribunal dismissed the petition, finding no outstanding operational debt and recognizing pre-existing disputes regarding the quality of goods supplied. The tribunal also found no outstanding rental dues payable by the corporate debtor. The petition was dismissed with no cost.
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