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TMI Blog2019 (8) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... o LOC issued by the Respondent to the extent of ₹ 39,15,148/-. The IBC, 2016 is not a recovery proceeding - the Adjudicating Authority rightly rejected the petitions with aforesaid reasons - petition dismissed. - (Justice A.I.S. Cheema) Member(Judicial) and (Kanthi Narahari) Member(Technical) For Appellants: Mr. Rishabh Gupta, Advocate. For Respondent: Present but appearance not marked. JUDGMENT In view of common issue arising in both the appeals, we hereby pass common judgment. 2. The Appellants filed the present appeals against the impugned order(s) dated 6th September, 2018 passed by the Adjudicating Authority (National Company Law Tribunal), Hyderabad Bench, Hyderabad whereby the Adjudicating Authority rejected the petitions bearing CP(IB) No. 100/9/HDB/2018 and CP(IB) No. 102/9/HDB/2018 filed by the Appellants after discussing the case on merit on the ground of existence of dispute. 3. Heard learned Counsel appearing for the respective parties. 4. Learned Counsel for the Appellants raises grounds as stated in the appeals, more particularly that no dispute , were brought on record by the Respondent ( Corporate Debtor ) prior to delivery of Demand Notice under Section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cotton of 25 mm length and 3.8 Micronaire to the Appellant. Accordingly, the Appellant in Appeal No. 653 of 2018 had dispatched Lot 145 comprising of 100 bales vide invoice No. 87 dated 28.02.2017 and Lot 58 comprising of 25 bales vide invoice No. 857 dated 08.03.2017 i.e., in total 125 bales. It is further submitted that the quality test was conducted on the said Lots on 29.03.2017 using Premier High Quality testing machine. The quality of goods was not upto the mark as required by the Respondent and the same was intimated to the Market Intermediary, viz. Apex Cotton Agency (I) Limited on 29.03.2017 as it is the business practice to address the quality concern pertaining to vendor through Market Intermediaries. The outcome of the test report was also addressed to the Appellant in Appeal No. 653 of 2018 vide Blue Dart Courier consignment No. 13719724745 on 29.03.2017 itself. As the Appellant (in appeal No. 653 of 2018) had not provided their e-mail ID to the Respondent and to the best of knowledge of the Respondent, the same was delivered to the Appellant. 9. From the perusal of the impugned order dated 06.09.2018, the Adjudicating Authority had also noticed that the Appellants sol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants claim that the LOC issued by the Respondent cannot be treated as payments made to the Appellants i.e., M/s R.S. Cottmark (India) Pvt. Ltd. and M/s Krishna Bio Tech. However, we are not inclined to accept the stand taken by the Appellants. 11. We are of the considered view that there is an existence of dispute as on the date of issue of Demand Notice by the Appellants to the Respondent. Apart from above, the Respondents also raised the issue with regard to quality of the bales supplied by the Appellants to the Respondent. 12. To establish the existence of dispute, the learned Counsel for the Respondent relied upon the documents at pages 144 and 147 of Paper Book filed by the Appellant in Company Appeal(AT)(Insolvency) No. 653 of 2018 whereby the Respondent vide its invoices dated 02.03.2017 and 11.03.2017 to the Appellant with a remark As per quality Control Report, the consignment rejected informed R.S. Cottmark(India) Pvt. Ltd. And in Company Appeal(AT)(Insolvency) No. 654 of 2018, learned Counsel for the Respondent relied upon at pages 124 and 126 of the Paper Book filed by the Appellant shows that the Corporate Debtor vide its invoices dated 15.06.2017 and 10.07.2017 to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Form 3 or 4, as the case may be [Section 8(1)]. Within a period of 10 days of the receipt of such demand notice or copy of invoice, the corporate debtor must bring to the notice of the operational creditor the existence of a dispute and/or the record of the pendency of a suit or arbitration proceeding filed before the receipt of such notice or invoice in relation to such dispute [Section 8(2)(a)]. What is important is that the existence of the dispute and/or the suit or arbitration proceeding must be pre-existing i.e. it must exist before the receipt of the demand notice or invoice, as the case may be. .. At paragraph 51 it is held: 51. .. Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the dispute is not a patently feeble legal argument or an assertion of fact unsupported by evidence. . 16. In the present case, the existence of dispute apparently establishes that the goods supplied by the Appellants have been rejected as per Quality Control Report. In the impugned judgement, the Adjudicating Authority gave his finding to establish the existence of dispute with regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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