9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (4) TMI 995 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - service of demand notice - HELD THAT - The operational creditor has not denied that they were to invest as per the agreement/MOU which was last revised on 08.09.2017, the only ground taken in the pleadings and more particularly the emails is regarding existence of outstanding dues of the Corporate Debtor to the Operational Creditor. It is the case of the Corporate Debtor that due to nonpayment of the agreed amounts; they were put into financial difficulties. Initially the investment was to happen during the period 2012 to 2015 which was later shifted as per MOU between the parties to 2017 and 2018 and even that could not materialize. Annexure 1 (page-8 to 12 of application) provides the details of various invoices and debit notes which are said to be due and payable by the Corporate Debtor. The first date is 13.06.2017 and the last date of invoice/debit note is 18.03.2019. These dates mentioned supra are much later than the MOU dates which were 15.02.2012 and 08.09.2017. There exists a dispute between the parties which is much prior to issuance of the From-III Demand Notice by the operational creditor to the corporate debtor which relates to not investing the amounts in the share capital of the Corporate Debtor and not honoring their financial and contractual commitments and the differences in the accounts which are evident from the reconciliation statement filed by the Operational Creditor that invoices are disputed. Further, as per the decision of the Supreme Court in Mobilox Innovations Private Limited vs. Kirusa Software Private Limited 2017 (9) TMI 1270 - SUPREME COURT , this Tribunal need not be satisfied as to whether the said defense is likely to succeed or not and also need not examine the merits of the dispute. The fact that dispute truly exists between the parties in fact is sufficient for this Tribunal to reject the Application, so long as the said defense is not spurious, hypothetical or illusory. Thus, by perusing the documents filed by the parties, it is manifestly clear that the Corporate Debtor raised disputes much prior to the issuance of Form 3 Demand Notice and filing of this present application, this Adjudicating Authority is of the view that there exist a dispute between the parties even before the issuance of the Demand Notice and as such the present Application filed by the Operational Creditor is liable to be dismissed. Application dismissed.
Issues Involved:
1. Undated Demand Notice 2. Defective Material and Freight Charges 3. Confirmation of Balance and Reconciliation Statement 4. Financial Commitments by the Operational Creditor towards the Corporate Debtor Issue-wise Detailed Analysis: 1. Undated Demand Notice: The Corporate Debtor argued that the Form-III Statutory Demand Notice was undated, questioning its compliance with Section 8 of the Insolvency and Bankruptcy Code (IBC), 2016, and the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The Tribunal examined Section 8, which mandates that an operational creditor must deliver a demand notice of unpaid operational debt to the corporate debtor. Despite the notice being undated, the Operational Creditor provided evidence of delivery on 28/09/2019, supported by a postal tracking report. The Tribunal referred to a precedent where failure to reply to a demand notice within 10 days does not preclude the Corporate Debtor from raising the existence of a dispute in a Section 9 application. Thus, the Tribunal concluded that the undated notice did not invalidate the defense. 2. Defective Material and Freight Charges: The Corporate Debtor contended that the Operational Creditor had supplied substandard products, resulting in significant losses and returned goods worth ?21.58 Lakhs. The Operational Creditor countered this by presenting customer satisfaction records showing high scores for quality and delivery. However, the Tribunal noted that the Operational Creditor had omitted freight charges claims in its submissions, indicating an unresolved dispute over these charges. 3. Confirmation of Balance and Reconciliation Statement: The Tribunal reviewed the reconciliation statement dated 19.03.2019, which highlighted disputes over invoices from 15.06.2017 to 18.03.2019. The remarks in the reconciliation statement, such as 'Approval not obtained' and 'invoice received after the cut-off period,' indicated the existence of disputes as per Section 8(2) of IBC, 2016. This supported the Corporate Debtor's claim of pre-existing disputes regarding the invoices. 4. Financial Commitments by the Operational Creditor towards the Corporate Debtor: The Tribunal examined emails exchanged between the parties, revealing that the Operational Creditor was required to invest in the Corporate Debtor as per an agreement/MOU, which was last revised on 08.09.2017. The Corporate Debtor argued that the Operational Creditor's failure to honor these financial commitments led to their financial difficulties. The Operational Creditor did not deny the obligation to invest but cited outstanding dues from the Corporate Debtor as the reason for non-payment. The Tribunal found that these financial disputes existed prior to the issuance of the Form-III Demand Notice. Conclusion: The Tribunal concluded that there were pre-existing disputes between the parties, including issues related to defective materials, freight charges, and financial commitments, which existed before the issuance of the demand notice. Citing the Supreme Court's decision in Mobilox Innovations Private Limited vs. Kirusa Software Private Limited, the Tribunal emphasized that it need not examine the merits of the dispute but only determine the existence of a genuine dispute. Consequently, the Tribunal dismissed the application filed by the Operational Creditor, stating that the defense was not spurious, hypothetical, or illusory. Order: The application IBA/820/2020 was dismissed, with no costs awarded.
|
