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TMI Blog2020 (8) TMI 460X X X X Extracts X X X X X X X X Extracts X X X X ..... roborate with 5 invoices. If really the Appellant was unable to supply raw material due to shortage then Respondent could have filed the correspondence with the Appellant in this regard. The Respondent has not placed on record any of the invoice to show that he had to purchase material from Appellant s competitors. In this case in reply to the notice the Respondent has raised a vague and baseless allegations against the Appellant which are not supported by any documentary evidence. Therefore, the dispute is spurious or hypothetical, hence the Adjudicatory Authority has to reject such defence. The Adjudicating Authority wrongly rejected the claim on the ground that the claim raised by the Appellant falls within the ambit of disputed claim. Merely disputing a claim cannot be a ground, as held by the Hon ble Supreme Court in Innovative Industries Ltd Vs ICICI Bank and Anr. [ 2017 (9) TMI 58 - SUPREME COURT] wherein it is observed that claim means a right to payment even it is disputed. The Code gets triggered the moment the default of ₹ 1 Lakh or more . The Respondent has defaulted to pay more than ₹ 1 Lakh and in absence of any pre-existing dispute and the record being co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e confirmation showing as an acknowledgement of debt of ₹ 23,04,537/- as on 31.03.2018. After receiving the notice, the Respondent has filed suit before City Civil Court Chennai. There is a pre-existing dispute. Therefore, an Application under Section 9 of the I B Code is not maintainable. 5. In the Rejoinder, the Appellant denied the allegation of forgery however, admitted that on 18.11.2017 Respondent had paid an amount of ₹ 5 Lakh only. 6. Ld. Adjudicating Authority after hearing the parties reached to the conclusion that the Appellant failed to prove that the Respondent owns an operational debt of ₹ 23,22,537/- and there is pre-existing dispute about the claim therefore, by the impugned order rejected the Application under Section 9 of I B Code. 7. Learned counsel for the Appellant submitted that the Respondent has raised false and baseless dispute after service of notice under Section 8 of I B Code. The goods were received and accepted by the Respondent (Corporate Debtor) and there was no dispute at the time of delivery of goods in regard to quantity and quality of goods and the Corporate Debtor issued account confirmation on its letter head duly signed and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. In the light of this pronouncement firstly, we examined whether there is an Operational Debt exceeding ₹ 1 lakh as defined in u/s 4 of the I B Code. In the application u/s 9 of the Code it is mentioned that during the period from 30.8.2016 to 20.12.2016, Appellant has supplied the goods to the Respondent and raised 5 invoices. In the application it is also mentioned that as on the date the Corporate Debtor is liable to pay to Operational Creditor (Appellant) a sum of ₹ 23,22,537/- along with interest. The Application is supported by the Affidavit of Ankit Doshi partner of the Appellant following documents are annexed with the application in support of the claim: (i) Copy of five invoices. (ii) Copy of ledger of Respondent (Corporate Debtor) maintained by Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther it is also noted that your client is having possession of our letter head had forged the annexure-3 alleged confirmation of balance and forged our seal and signature to suit your client s convenience. 14. From the above referred facts it is clear that Appellant had regularly supplied goods to the Respondent i.e. earlier to the 5 invoices. The Respondent has denied that the Appellant has never delivered 5 invoices referred in the application but subsequently he admits that the Appellant has supplied goods as per invoice dated 26.11.2016 and 20.12.2016. In the C-Forms delivered by the Respondent to the Appellant there is reference to all the 5 invoices, the Respondent has no courage to say that the C-Forms are forged. From the ledger of Respondent maintained by the Appellant it is apparent that there was a long business relationship between the parties. Ledger and bank account enteries corroborate with 5 invoices. If really the Appellant was unable to supply raw material due to shortage then Respondent could have filed the correspondence with the Appellant in this regard. The Respondent has not placed on record any of the invoice to show that he had to purchase material from Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 23,22,537/- is due and payable and has not yet been paid. There is no dispute or a suit pending before receipt of demand notice. 20. The Adjudicating Authority wrongly rejected the claim on the ground that the claim raised by the Appellant falls within the ambit of disputed claim. Merely disputing a claim cannot be a ground, as held by the Hon ble Supreme Court in Innovative Industries Ltd Vs ICICI Bank and Anr. wherein it is observed that claim means a right to payment even it is disputed. The Code gets triggered the moment the default of ₹ 1 Lakh or more . 21. From the record as we find that the Respondent has defaulted to pay more than ₹ 1 Lakh and in absence of any pre-existing dispute and the record being complete we hold that the application u/s 9 preferred by the Appellant was fit to be admitted. 22. For the reasons aforesaid, we set-aside the impugned judgment dated 30.9.2019 and remit the case to the Adjudicating Authority for admitting the application u/s 9 of I B Code after notice to the Corporate Debtor to enable the Corporate Debtor to settle the matter prior to admission. The appeal is allowed with aforesaid observations and directions. No Costs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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