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TMI Blog2020 (8) TMI 391X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion of the Learned Counsel appearing for Operational Creditor that these two amounts were never claimed as Operational debt as they have already been paid. There is no documentary evidence filed by the Appellant to substantiate their plea that all accounts have been reconciled and signed by both the Parties except for filing these confirmatory letters which portray so many discrepancies and therefore, inspire no confidence. Both the defences raised by the Appellant s Counsel are mutually exclusive and cannot coexist as a debt cannot be disputed and discharged at the same time - the Appellant did not raise any plausible contention requiring further investigation and the argument raised is not substantiated by any evidence. There is no illegality or infirmity in the Order passed by the Adjudicating Authority - Appeal dismissed. - Company Appeal (AT) (Insolvency) No. 379 of 2020 & I.A. No. 1509 of 2020 - - - Dated:- 10-8-2020 - [Justice A.I.S. Cheema] Member (Judicial) , [Justice Anant Bijay Singh] Member (Judicial) And [Ms. Shreesha Merla] Member (Technical) For the Appellant: Mr. P. Nagesh, Advocate. For the Respondents: Mr. Abhishek Garg, Advocate for R-1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onary and moonshine, which is upstretched with an intention to erase its liability and defeat the claim made by the Operational Creditor. 3. Learned Counsel appearing for the Appellant contended that the Adjudicating Authority had ignored all documentary evidence with respect to preexisting dispute as the Operational Creditor failed to disclose that even before the issuance of demand notice dated 27.10.2018, to which the Corporate Debtor had given a reply on 05.11.2018, the Operational Creditor had earlier issued a notice dated 17.08.2018, claiming the same amount of ₹ 16,18,18,265/-; that the notice was replied to by the Corporate Debtor on 28.08.2018, wherein it was specifically stated that as per mutual understanding, necessary journal entries in the books of accounts being maintained by the Corporate Debtor and in terms of the said journal entries, adjustments of payments were made and therefore no amounts were outstanding in respect of the said invoices. Learned Counsel further submitted that the Operational Creditor had acknowledged the reconciled accounts for the period 04.11.2016 to 31.03.2017 and also for the period 01.04.2017 to 31.03.2018; that, the confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be and observed: 33. The scheme under Sections 8 and 9 of the Code, appears to be that an operational creditor, as defined, may, on the occurrence of a default (i.e., on non-payment of a debt, any part whereof has become due and payable and has not been repaid), deliver a demand notice of such unpaid operational debt or deliver the copy of an invoice demanding payment of such amount to the corporate debtor in the form set out in Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with 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. ........ 17. In the said case, the Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . had confirmed the accounting entries in the ledger, inspires no confidence. This is apart from the fact that signatures purporting to be of Mr. Gandhi being pointed out by Appellant do not match even on bare reading of his service record. We find force in the contention of the Learned Counsel appearing for the Operational Creditor that the Articles of Association of the Company mandate the presence and signature of the Director wherever the stamp of the Company is used and he placed reliance on the ratio laid down by the Hon ble Supreme Court, in Kotla Venkataswamy V/s Chinta Ramamurthy, AIR MAD 579. Additionally, the material on record shows that the ledger which the Appellant is relying upon and states that they have been signed by the Operational Creditor and M/s Oyster Steel and Iron Pvt. Ltd. are dated 01.04.2019 whereas the Operational Creditor had demanded the same debt from the Corporate Debtor in the notices dated 17.08.2018 and 27.10.2018. Further, there are no substantial reasons given as to why only the ledger of the Corporate Debtor depict these entries and the same are not reflected in the ledger of the Operational Creditor when it is the specific case of the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not substantiated by any evidence. Hence, we are of the opinion that the dispute does not truly exist in fact and is spurious and the principle laid by the Hon ble Supreme Court in Mobilox Innovations Pvt. Ltd. (Supra) is squarely applicable to the facts of this case. 7. Therefore, we are of the view that there is no illegality or infirmity in the Order passed by the Adjudicating Authority and hence this Appeal fails and is dismissed accordingly. No order as to costs. 8. The Resolution Professional preferred IA No. 1509 of 2020. In seeking direction against the Appellants for non-adherence/contempt of Order dated 03.03.2020. Learned Counsel appearing for the Resolution Professional submitted that the Appellants have wrongfully withdrawn money and not provided any information with respect to the assets, the contact details of debtors, purchase orders, invoices, and have also not handed over the physical assets as appearing in the balance sheet as on 31.03.2019. He stated that they have not been co-operating at all and in the garb of lockdown have even stopped acknowledging the emails. Keeping in view the submission of the Learned Counsel that an Application in this regard i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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