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TMI Blog2020 (4) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... gs under section 9 of the Code, and whereas there was also a pre-existing dispute over the final amount payable, and also with part payment being made, which makes this a mere recovery proceeding, the Petition is liable to be dismissed on all these scores as well. Petition dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... the Operational Creditor, specifically in respect of the raw material supplied to the Corporate Debtor kept on accumulating and the Corporate Debtor failed to repay the same despite the Operational Creditor having already provided ample time beyond the period of repayment as per the Agreement. The amount owed by the Corporate Debtor (without considering late payment interests and further related expenses) crossed more than a million euros in 2018. (5) It is also stated that the Operational Creditor even agreed to set-off the amount receivable from the Corporate Debtor against the amount payable to the Corporate Debtor. However, even then, the Corporate Debtor was not in a position to clear its operational debt and expressed its inability to do the same. All the goods supplied by the Operational Creditor were duly accepted by the Corporate Debtor and no issue with regard to the quality of the goods was raised by the Corporate Debtor, and even to dated, they have indicated any problem with the quality of the goods delivered. Accordingly, on 26th April, 2019, the Operational Creditor wrote to the Corporate Debtor seeking its outstanding dues. Whilst demanding its dues, the Operatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receiving the goods under the impugned invoices nor did it raise any concerns with the quality of the goods. Instead, the Corporate Debtor sought to raise the issue of pending payment from the Operational Creditor amounting to Euros 679,935. 3. The Respondent has filed a Statement of Objections on 06.11.2019, by inter alia contending as follows: (1) It is stated that the matter falls outside the purview of this Tribunal's jurisdiction as stated under the provisions of the IBC as none of the ingredients under section 8 are satisfied by the Petitioner and the jurisdiction has been expressly ousted by the parties in the agreements executed by and between the parties, as enumerated hereinafter. The petition is liable to be dismissed on this ground alone. (2) The demand notice issued by the Petitioner is exaggerated and unfounded, unsupported by documentary evidence and absolutely misleading. The same has been responded to by the Respondent vide Reply to Demand Notice dated 23.06.2019 wherein it has raised a bona fide dispute to the demand set forth by the Petitioner and countered the same as it is aggrieved by the breach of contract by the Petitioner. In furtherance of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Civil Code. The termination would have no effect on the commission for the order placed prior to the said termination. The Agreement also contains a clause that the Italian version of the contract is considered as the document to which reference must be made in the event of disagreement regarding the interpretation especially in view of the fact that the courts in Italy would have jurisdiction over the disputes under the Agreement, if any. As such, when the subject matter of the present petition concerns the Italian Civil Code and interpretation of the Agreement in Italian, it automatically excludes the jurisdiction of this Tribunal as it does not have the power to interpret the laws of Italy. (6) It is also stated that the invoices on their own do not construe the existence of a debt and are subject to reconciliation of accounts as was the practice prior to issuance of the Demand Notice by the Petitioner. As such, only upon the reconciliation of the accounts does the amount become outstanding. As such, there is no 'debt' much less the 'default' in payment of such 'debt' by the Respondent. The Respondent has invoked Paragraph 16 of the Trade Agreement an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SC); Transmission Corporation of Andhra Pradesh Ltd. v. Equipment Conductors and Cables Ltd. [2018] 98 taxmann.com 375/150 SCL 447 (SC); Bharat Heavy Electricals Ltd. v. Electricity Generation Incorporation [CS (Comm) 190 of 2017, dated 19-9-2017]; Hakam Singh v. Gammon (India) Ltd. AIR 1971 SC 740; Swastik Gases (P.) Ltd. v. India Oil Corp. Ltd. [2013] 9 SCC 32; VDS Plastics (P.) Ltd. v. Pal Mohan Electronics (P.) Ltd. [Company Appeal (AT) Insolvency No. 58 of 2017, dated 14-9-2017]; Nayan Shah v. Viral Rajarshi Mehta [2018] 97 taxmann.com 556 (NCL - AT); Innoventive Industries Ltd. v. ICICI Bank Ltd. [2017] 84 taxmann.com 320/143 SCL 625 (SC); One Coat Plaster v. Ambience (P.) Ltd. [2017] 87 taxmann.com 127 (NCLAT - New Delhi); B.K. Educational Services (P.) Ltd. v. Parag Gupta & Associates [2018] 98 taxmann.com 213/150 SCL 293 (SC); Tulip Chemicals (P.) Ltd. v. Sonal Plasrub Industries (P.) Ltd. [CP (IB) 198 (MB)/2018, dated 16-11-2018]. 5. The Operational Creditor has filed Rejoinder dated 09-12-2019, by inter alia, stating that the Demand Notice clearly indicates that the case of the Petitioner is based on the trade agreement dated 10th August 2016 ('Trade Agreement' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case being filed in Italy. For this reason alone, the present Petition is not maintainable and is liable to be dismissed. 9. Without prejudice to the above, we consider it appropriate to touch upon the issues raised by the Respondent with respect to the debt per se, which forms the substantive part of the Petition. It is observed that this Petition has been filed seeking to initiate CIRP in respect of M/s. J.F.D. India Private Limited ('Respondent/Corporate Debtor') on account of alleged default of ₹ 5,73,16,772/- stated to be committed by the latter, against supplies of raw and consumable materials required for replastification of diamond wires by the Petitioner. A Trade Agreement dated 10.08.2016 was entered into by the parties herein. Invoices were to be raised by both parties, by the Operational Creditor for the supplies, and by the Corporate Debtor for the replastification. It was agreed to set off one payment against the other, after due reconciliation and adjustments. 10. Whereas the Petitioner/Operational Creditor states that the amounts due to it kept on accumulating, in response to its notice, the Respondent/Corporate Debtor stated that it needed more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insolvency. The Hon'ble Supreme Court in the case of K. Kishan (supra) clarified that the Petitioners cannot use IBC either prematurely or for extraneous considerations or as substitute for debt enforcement procedures. Even following the decision in the case of Transmission Corporation of Andhra Pradesh Ltd. (supra), delivered by the Hon'ble Supreme Court, the Adjudicating Authority is to see whether there is a plausible contention which requires further investigation and that the 'dispute' is not patently feeble legal argument or an assertion of fact unsupported by evidence. In the instant case the Respondent has not only opposed the Demand Notice but raised a bona fide dispute which arises from the Agreement between the two parties and which requires to be adjudicated, which is in progress in an Italian Court, and for which this Tribunal is not the forum, apart from the fact that the amounts in question themselves remain to be reconciled. 12. Hence, since an undisputed clear debt at the time of sending the Demand Notice under the Code or alleging a default by the Petitioner is a sine qua non for initiating proceedings under section 9 of the Code, and whereas the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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