9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (11) TMI 612 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - dispute regarding quality of the goods supplied by the Appellant - consignment number given in the track report and in the postal receipt does not match, thereby reflecting the non-service of notice under Section 8 of IBC - HELD THAT - The Appellant itself has accepted and agreed to lift the complete material being defective and has failed to lift the material which is of no use to the Corporate Debtor. However, the Appellant is pressurizing using the provisions of IBC to recover the money forcefully as IBC immediately changes the management of the Company. It is also very much clear that they have not filed the Postal Receipt before this Tribunal which proves the fact that there is some mismatch between Consignment Number given in the Track Report and Postal Receipt. Hence, the finding of Adjudicating Authority is correct. It is also proved from the email that the Appellant has accepted the fact that the material is defective and substandard and failed to lift the complete material. In the present case the delivery of demand notice itself is a grey area and Adjudicating Authority has rightly held so. In addition to that there is also a pre-existing dispute - Furthermore, this is the case of chasing of payments under the pressure of IBC. Hon ble Supreme Court in TRANSMISSION CORPORATION OF ANDHRA PRADESH LIMITED VERSUS EQUIPMENT CONDUCTORS AND CABLES LIMITED 2018 (10) TMI 1337 - SUPREME COURT has already held that IBC is not intended to be a substitute to a recovery forum and also laid down that whenever there is existence of real dispute, the IBC provisions cannot be invoked. Appeal dismissed.
Issues Involved:
Challenge to impugned order under Section 61 of IBC - Dismissal of petition by Adjudicating Authority - Dispute over quality of goods supplied - Non-service of notice under Section 8 of IBC - Failure of Respondent to make payment - Existence of debt, default, and pre-existing dispute - Compliance with conditions for triggering CIRP under Section 9 of IBC - Interpretation of Purchase Order terms - Communication regarding defective goods - Discrepancy between consignment number in track report and postal receipt - Adjudicating Authority's decision upheld - Invocation of IBC for debt recovery - Supreme Court precedent on IBC as recovery forum. Detailed Analysis: 1. Challenge to Impugned Order: The appeal was filed under Section 61 of the Insolvency and Bankruptcy Code, 2016, contesting the order passed by the Adjudicating Authority dismissing the petition filed by the Operational Creditor under Section 9 of the IBC. The dismissal was primarily based on a dispute concerning the quality of goods supplied by the Appellant and the non-matching consignment numbers in the track report and postal receipt, indicating non-service of notice under Section 8 of IBC. 2. Background of the Case: The Appellant, engaged in manufacturing plastic products, received a Purchase Order from the Respondent in March 2018, followed by an advance payment. After supplying goods worth a total value of &8377;91,57,699, the Respondent raised objections about the quality of goods. Subsequently, the Appellant took back defective goods, issued credit notes, and demanded a balance payment of &8377;41,21,405, including principal outstanding and interest, through a notice under Section 8 of IBC. 3. Appellant's Argument: The Appellant contended that they made efforts to prove the consistency between the consignment details in the track report and postal receipt. They highlighted their communication with the Respondent regarding lifting defective materials and the subsequent non-payment, leading them to approach the Adjudicating Authority. The Appellant criticized the Authority's dismissal as arbitrary, emphasizing the existence of a dispute before issuing the demand notice. 4. Respondent's Defense: The Respondent emphasized the terms of the Purchase Order specifying the description of the pipes ordered. They claimed that the Appellant acknowledged the defective nature of the materials and agreed to lift them entirely, but failed to do so. The Respondent denied receiving the demand notice and argued that the Appellant did not provide the postal receipt, causing a discrepancy in the consignment details. 5. Adjudication and Decision: The Tribunal analyzed the submissions and records, concluding that the Appellant acknowledged the defective nature of the goods and failed to lift all unusable materials. The Tribunal found a mismatch between the consignment number in the track report and the postal receipt, supporting the Authority's decision. It affirmed that the conditions for initiating Corporate Insolvency Resolution Process (CIRP) under Section 9 of IBC were not met due to the unresolved dispute and delivery issues. 6. Precedent and Dismissal: Citing a Supreme Court case, the Tribunal highlighted that IBC should not be misused as a recovery forum, especially in the presence of genuine disputes. Referring to the existing dispute and lack of proper notice delivery, the Tribunal upheld the Adjudicating Authority's decision, dismissing the appeal without costs. This detailed analysis covers the key issues, arguments, and the Tribunal's rationale in the judgment, emphasizing the legal aspects and factual context of the case.
|
