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TMI Blog2020 (5) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... not have been admitted and the Learned Adjudicating Authority not having considered the entire facts and the law in its correct perspective before passing the Impugned Order dated 8-11-2019 committed error - the Corporate Debtor/Appellant is released from the rigor of Corporate Insolvency Resolution Process and actions taken by IRP/RP and Committee of Creditors, if any, in view of the Impugned Order are set aside. IRP/RP will hand back the records and management of the Corporate Debtor to the promoters/directors of the Corporate Debtor. The matter is remitted back to the Adjudicating Authority to decide the fee and costs of 'Corporate Insolvency Resolution Process' payable to IRP/RP which shall be borne by the Respondent/Operational Creditor - Appeal allowed by way of remand. - COMPANY APPEAL (AT) (INSOLVENCY) NO. 1370 OF 2019 - - - Dated:- 18-3-2020 - A.B. Singh, A.I.S. Cheema, Judicial Member And Kanthi Narahari, Technical Member For the Appellant : Mukesh Rana, Ms. Mamta and Ms. Tanusha Pali, Advs. For the Respondent : Ahsan Ahmad and Rajiv Kumar, Advs. JUDGMENT A.B. SINGH, JUDICIAL MEMBER 1. Initially, this Appeal was filed by Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Appellant. v. That the disputes regarding the defective and inefficient pump and service were raised by the Appellant during the existence and subsistence of the work order at multiple occasions through various modes, as the same was defective since inception and the same was duly informed the Operational Creditor was requested to be corrected/repaired and replaced vide various correspondences dated 31-10-2017, 25-12-2017, 26-12-2017, 7-1-2018, messages dated 20-9-2017, 21-9-2017, 11-9-2017, 15-10-2017, 29-10-2017, 5-10-2017, 14-10-2017 etc. vi. That the dispute regarding the inefficient and defective service of the respondent were repeatedly raised by the Corporate Debtor during the subsistence of the work order vide various correspondences including emails, calls and messages. vii. However, the Operational Creditor did not pay any heed to it and even maliciously stopped the machine during the subsistence of the work order to pressurize the Corporate Debtor as a consequence of which the Respondent/ had to suffer losses. That seeing unprofessional approach on the part of the respondent, the appellant has no potation except to discontinue the work order with responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntainability of application under section 9 of IBC as the invoices forming the basis of Operational Debt were different from the invoices in demand notice under section 8 of IBC, Objection regarding pre-existing dispute and the discrepancies in each of the disputed invoices and the order was reserved by Hon'ble NCLT on 11.10.2019. xiv. The Hon'ble NCLT pronounced the order 08.11.2019 and thereby allowed the section 9 Application and appointed IRP. However, the copy of the same was never received by the Corporate Debtor/Appellant, despite specific mention in the order, neither any order was uploaded despite repeated checking . 4. Learned Counsel for the Respondent No. 1/Operational Creditor in Reply Affidavit filed on their behalf have stated as follows: 1. That the present appeal is based on the misconceived proposition of law as vide WhatsApp message dated 30-11-2018, in response to the Demand Notice dated 1-11-2018, (at page-24 of reply of the Respondent No. 1), the appellant/corporate debtor has specifically admitted an amount of ₹ 6,35,000/ - due and payable to the Respondent No. 1 which is more than one lakh rupees. Accordingly, the Ld. Adjudicating Aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and the same were issued when the appellant failed its commitment. 4. That the present appeal is an afterthought knowing full well that the differences whatsoever which were prior to the settlement of amount of unpaid operational debt on 05.03.2018, have been iron out by agreeing to make the payment of the outstanding dues by the appellant/corporate debtor in terms of the settlement which was duly communicated by the respondent no. 1 to the appellant/corporate debtor vide e-mail dated 5-3-2018. However, despite clear commitment to release the payment of outstanding amount, the appellant failed to do so. Therefore, now they cannot take advantage of alleged dispute prior to 5-3-2018 as the same has been clearly done away with. Accordingly, the appellant is estopped from raising such alleged disputes on flimsy ground which as no legs to stand. (E-mail dated 5-3-2018 sent by the respondent no. 1/operational creditor to the appellant/corporate debtor at page no. 269 of Volume-II of Memorandum of Appeal and also pa.ge 24 of the reply of the Respondent No. 1/operational creditor). 5. That appellant approached the respondent no. 1 in the year 2017 and placed a work order be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctober, 2017 sent by the Corporate Debtor to Respondent/Operational Creditor making complaints about the ineffective and insufficient service provided by the Respondent/Operational Creditor. 7. Further at page 250 another Email dated 25th December, 2017 sent by the Corporate Debtor disputing the Bill raised by Operational Creditor stating it to be wrong and making complaints about loss of work and consequently leading to loss of work as the Pump in question was removed for a week without intimation. Similar is the Email at Page 251 dated 26th December, 2017. On the other hand, the Respondent/Operational Creditor sent the Email on 28th December, 2017 at page 252 of the Paper Book, denying deficiency of service and further claimed that out of 92 days of service only 8.5 days was consumed for maintenance. 8. Further the email at Page 256 of the Paper Book sent by Corporate Debtor dated 07th January, 2018 to Respondent/Operational Creditor claiming that in month of November and December, 2017 there was breakdown of machine and loss of service due to breakdown and also at Page 257 which is the Email dated 07th January, 2018 sent by Appellant/Corporate Debtor to Respondent/Op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid? And iii. Whether there is existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operation debt in relation to such dispute? If any one of the aforesaid conditions is lacking, the application would have to be rejected. Apart from the above, the adjudicating authority must follow the mandate of section 9, as outlined above, and in particular the mandate of section 9(5) of the Act, and admit or reject the application, as the case may be, depending upon the factors mentioned in section 9(5) of the Act . 11. The exchange of different Email between the Parties as referred above, it clearly establishes that there was pre-existing dispute between the parties regarding services rendered and the Corporate Debtor had continuously through Emails referred to Page 250, 251 and 252 made complaints regarding the deficiency of service and loss caused to the project and bill raised by the Operational Creditor/Respondent No. 1. 12. In view of the facts emerging on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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