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TMI Blog2017 (8) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... by the corporate debtor as its super stockiest for Chandigarh, Punjab, Haryana and Himachal Pradesh in terms of appointment letter dated 12.11.2013. The corporate debtor agreed to give a margin of 8% plus 2% (transportation) of the company invoice value to the operational creditor. As per the terms of the payment, the first supply of the products by the corporate debtor to the operational creditor was on advance payment and future payments would be through post-dated cheques of maximum 21 days credit. It is submitted that the operational creditor accordingly remitted a sum of Rs. 6,00,000/- to the bank account of the corporate debtor on 15.11.2013 against supply of products. 4. The relevant appointment letter/agreement dated 12.11.2013 has been reproduced below: "NAME OF BUYER, M/s. Pitambara Enterprises ADDRESS OF BUYER: SHOP NO. 7, FIRST FLOOR, BRAR BAZAR, M.S. ENCLAVE, DHAKOLI, ZIRAKPUR, DIST. MOHALI, PUNJAB-160104, MOB.-9501595712 Subject: Appointment as a Super Stockist. Dear Sir, This is to inform you that in consideration of the credentials represented in your application dated 12th November 2013, you have been appointed as a Super Stockiest, herein afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sd/- Mr. D. Mitra Mr. Rajinder Kumar AUTHORIZED SIGNATORY AUTHORIZED SIGNATORY DESIGNATION.NSM DESIGNATION: PROPRIETOR DATED: 12th NOV. 2013 PLACE: DELHI For Sri Pitambara Enterprises Sd/- Authorised Signatory" 5. It is submitted that in terms of agreement between parties the corporate debtor would supply its products to the operational creditor and the operational creditor would further supply same to the distributor and the distributor in turn to the Retailers. In some cases it is stated that the supplies were made directly by operational creditor, such as to canteens. 6. Applicant further submitted that as per the commercials designed by the corporate debtor, all expenses towards marketing/promoting and salary of employees of the corporate debtor was to be paid by the operational creditor, who subsequently claimed such expenses by raising debit notes upon the corporate debtor. 7. It is further represented that due to the low quality and lack of required marketing/promotion there was a steep decline in the demand of the product. As a consequence, the stocks were piled up at the retail counters, which they asked the distributors to take back and have amounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r claim of Rs. 46, 88,832. 12. A demand notice under section 8 was also issued to the corporate debtor on 13.02.2017, in reply of which the corporate sent a further reply dated 02.03.2017, in which a claim of Rs. 12,87,002/- has been raised by the corporate debtor. It is further submitted by operational creditor that the reply cannot be considered as a valid reply because it has been sent by the corporate debtor after 10 days of demand notice. 13. The corporate debtor in their reply filed on 04.07.2017 completely denied the claim of the operational creditor and submitted that the claim of operational creditor is not an admitted debt. In its reply-cum-demand notice dated 02.03.2017 corporate debtor has raised a counter claim of Rs. 12,87,002/- with interest @ 18% per annum against the applicant. 14. It is further submitted by the corporate debtor that invoking jurisdiction of the Tribunal, is a mere tactics to arm twist the corporate debtor, so that the Corporate debtor will not be able to institute appropriate recovery proceeding to recover the said claim from the, operational creditor. 15. It is also their case that the Respondent Company does not fall within the scope and amb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent Company and the respondent company has no liability to pay for the products supplied by the applicant to such distributors and/or retail outlets. 20. Heard the parties and perused the case records including additional documents filed by the applicant. 21. It is seen from the case records that the claim of the operational creditor is not admitted but disputed by the corporate debtor which is evident from the reply of the legal notice dated 21.01.2017 and reply to demand notice dated 02.03.2017. Respondent company has contended that as no principal sum is payable by them to the applicant, the question of payment of any interest also does not arise. On the contrary respondent company has raised a Counter claim for Rs. 12,87,002/- with interest as payable by applicant to the respondent company. 22. It is also pertinent to state here that this is not the forum to examine and adjudicate as to which portion of the claims and counter claims are admissible. It is beyond the scope of this forum to decide as to which party and to what extent is responsible in the alleged decline in sale volumes, piling of stocks, return of the huge stocks by third parties and for the lack of promo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings relating to: (a) existence of amount of the debt; (b) quality of goods or services; (c) breach of a representation or warranty. The definition of "dispute" is "inclusive" and not "exhaustive". The same has to be given wide meaning provided it is relatable to the existence of the amount of the debt, quality of goods or services or breach of a representation or warranty. 18. Once the term "dispute" is given its natural and ordinary meaning, upon reading of the Code as a whole, the width of "dispute" should cover all disputes on debt, default etc. and not be limited to only two ways of disputing a demand made by the operational creditor, i.e. either by showing a record of pending suit or by showing a record of a pending arbitration. The intent of the Legislature, as evident from the definition of the term "dispute", is that it wanted the same to be illustrative (and not exhaustive). If the intent of the Legislature was that a, demand by an operational creditor can be disputed only by showing a record of a suit or arbitration proceeding, the definition of dispute would have simply said dispute means a dispute pending in Arbitration or a suit. ........................... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inciple of law that multiplicity of proceedings is required to be avoided. Therefore, if disputes under sub-section (2)(a) of Section 8 read with sub-section (6) of Section 5 of the 'I & B Code' are confined to a dispute in a pending suit and arbitration in relation to the three classes 20 under sub-section (6) of Section 5 of the I & B Code it would violate the definition of operational debt under sub-section (21) of Section 3 of the I & B Code' and would become inconsistent thereto, and would bar Operational Creditor from invoking Sections 8 and 9 of the Code. Sub-section (6) of Section 5 read with sub-section (2)(a) of Section 8 also cannot be confined to pending arbitration or a civil suit. It must include disputes pending before every judicial authority including mediation, conciliation etc. as long there are disputes as to existence of debt or default etc., it would satisfy sub-section (2) of Section 8 of the I & B Code'." 25. A perusal of the aforesaid order of the Hon'ble Appellate Tribunal shows that the term "dispute'' has to be given a wide meaning and shall contained all type of dispute related to amount of debt or quality of goods. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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