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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 ..... 'no dispute', were brought on record by the Respondent ('Corporate Debtor') prior to delivery of Demand Notice under Section 8 as mandated by Insolvency & Bankruptcy Code, 2016 (in short IBC). 5. The other ground is with regard to Letter of Credit dated 01.12.2017 (henceforth referred to as LOC) whereby the Respondent (Corporate Debtor) issued in favour of one of the Petitioners in C.P. No. 101/9/HDB/2018 filed before the Adjudicating Authority (no appeal filed by him) namely M/s Samkit Bio Farms Pvt. Ltd is concerned, it is submitted that the said LOC was issued by the Respondent to secure further consignments from M/s Samkit Bio Farms Pvt. Ltd but not to settle the dues of the Appellants. It is further submitted that the Respondent in pleadings has stated that the said LOC has been issued in full and final settlement of claim of Appellants and other parties and in accepting the said contention, the Adjudicating Authority passed the impugned order which is in direct contravention to "Illustration C" of Section 62 of the Indian Contract Act. It is contended that there is no dispute which was brought on record by the Respondent prior to deliver of Demand Notice under Section 8(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant. 9. From the perusal of the impugned order dated 06.09.2018, the Adjudicating Authority had also noticed that the Appellants sold cotton bales to the Respondent ('Corporate Debtor') vide invoice no. 87 dated 28.02.2017 amounting to Rs. 20,58,679/- and vide invoice No. 857 dated 08.03.2017 amounting to Rs. 5,34,354/- and the amount in respect of the two invoices are outstanding and the Appellants also claimed interest. Further, the claim of the Appellant in Company Appeal(AT)(Insolvency) No. 654 of 2018 is that the Respondent admitted the transaction and claim amount of Rs. 28,40,840/- (Rupees Twenty-Eight Lakhs Forty Thousand Eight Hundred Forty only). 10. Whilst there is no dispute with regard to Demand Notice issued by Appellant dated 20.11.2017 and it has not been denied by the Respondent. However, the crux of the issue is with regard to the existence of dispute. The Appellants have not denied that M/s Apex Cotton Agencies (I) Pvt. Ltd. acted as intermediary to resolve the claims, difference or dispute between the buyer and seller arising out of the dealings, contracts and the transactions and dispute in relation to quality, and quantity of the physical delivery for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Paper Book filed by the Appellant shows that the Corporate Debtor vide its invoices dated 15.06.2017 and 10.07.2017 to the Appellant- M/s Krishna Bio Tech with a remark- "As per QC Report, the consignment is not fit for uses., hence Rejected. A/cs to be informed of same for onward communication to supplier. Sd/- 19.06.17" and "As per QC Report, the consignment is not fit for production and rejected. Stores has been informed for onward communication to Krishna Biotech cotton merchant." These are handwritten remarks. From the perusal of the dates of the said letters, it is apparent that the letters have been issued much prior to issuance of Demand Notice (dated 20.11.2017) by the Appellants to the Respondent. However, the learned Counsel for the Appellants denied and claimed that the letters are manufactured and created for purpose of raising a dispute to defeat the right of the Appellants to invoke the jurisdiction of the Adjudicating Authority under Section 9 of IBC, 2016. 13. Adjudicating Authority, considering records and accepted that there is pre-existing dispute. On mere denial of documents by Appellants, we are unable to disturb the findings of Adjudicating Authority af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 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 LOC issued by the Respondent to the extent of Rs. 39,15,148/- (Rupees Thirty-nine Lakhs Fifteen Thousand and One Hundred Forty-Eight), at Paragraphs 48, 49 & 50 passed in C.P. 100/2018 which are extracted as under: "48. This Tribunal is of the view that there exists a dispute and because of the resolution of the said dispute only, Respondent/Corporate Debtor issued LC for Rs. 39,15,148/- in favour of M/s SAMKIT BIO FARMS LIMITED with an understanding that after encashment of LC, M/s SAMKIT BIO FARMS LIMITED would pay amounts to the Petitioner and M/s. KRISHNA BIO TECH. 49. Therefore, the contention of the Respondent require further investigation and enquiry. It requires oral evidence even from the Company that acted as mediator in the resolution process. 50. In fact, the Respondent/Corporate Debtor also raised dispute regarding the quality of the cotton bales supplied. Further, it is the case of the Respondent that the consignment of cotton bales has been rejected. There are endorsements on the copi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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