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TMI Blog2020 (9) TMI 507X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-2020 - Bhaskara Pantula Mohan, Member (J) And Shyam Babu Gautam, Member (T) For the Appellant : Prathamesh Kamath, Keanan Nagporwala and Rushil Mathur, Advocates i/b Kochar Co. For the Respondents : S.R. Jariwala, Chartered Accountant and Ami Jain, Advocate ORDER BHASKARA PANTULA MOHAN, MEMBER (J) 1. This Company Petition is filed by Future Electronics Inc. (Distribution) Pte. Ltd. (hereinafter called Operational Creditor ) by invoking the provisions of Section 9 of Insolvency and Bankruptcy Code (hereinafter called Code ) read with Rule 6 of Insolvency Bankruptcy (Application to Adjudicating Authority) Rules, 2016, seeking to set in motion the Corporate Insolvency Resolution Process (CIRP) against Chaipertech Electronics Private Limited (hereinafter called Corporate Debtor ) alleging that the Corporate Debtor committed default in making payment to the Financial Creditor. FACTS OF THE CASE 2. The Operational Creditor is a company based in Singapore bearing Identification Number 199507398C and has filed this petition through its authorized signatories in India. The petitioner has annexed the Power of Attorney in this regard. The Corporate D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or on the other hand has denied all the averments made by the Operational Creditor. A strong contention was raised by the Corporate Debtor that the Operational Creditor did not annex the legal notices and replies of the Corporate Debtor prior to issuance of the demand notice and hence, by doing this, has tried to suppress the facts from this Tribunal. The Corporate Debtor has annexed all these notices in their reply. 8. The Corporate Debtor has mentioned that there were certain disputes between both the parties, the reasons for which are as follows: i. That the applicant has supplied the material without placement of orders by the Corporate Debtor. A legal notice dated 13.11.2017 was also sent by the Corporate Debtor to the Operational Creditor stating that certain goods worth ₹ 1,00,00,000/- were also dumped by the Operational Creditor on 10.04.2015. The said goods were accepted by the Corporate Debtor only to avoid penalty and damages and on the assurance of help in selling the goods by the Corporate Debtor. But rather it was found that the Operational Creditor instead of helping the Corporate Debtor was selling the goods to the customers of the Corporate Debtor. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that the documents have been fabricated for securing unfair gains. If this was the case, the Corporate Debtor could have initiated a criminal trial against the Operational Creditor which has not been done. Hence, this objection appears to have been raised for the sense of objection only. 14. The main contention raised by the Corporate Debtor against the Operational Creditor is that there was a dispute in existence between both the parties. The Corporate Debtor mentioned in his reply that the Operational Creditor has dumped certain goods even when the purchase order was not placed. If this was the scenario, there is nothing in writing to prove this contention of the Corporate Debtor. Moreover, when the goods were dumped, it was the duty of the Corporate Debtor to return the goods to the Operational Creditor then and there but the Corporate Debtor neither returned the goods nor any complaint was made in that regard. Also, it is to be noted that the custom duty on those goods was paid by them which clearly shows the intention of the Corporate Debtor that they were not wanting to return the goods and now are raising frivolous grounds for the dismissal of the petition. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 the suit or arbitration proceeding filed before the receipt of such notice or invoice in relation to such dispute [Section 8(2)(a)]..... 51. It is clear, therefore, that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application, under Section 9(5)(2)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the existence of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the adjudicating authority is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also blames the general state of India's economy for its failure to pay the amounts. The Corporate Debtor further assures the petitioner that they are looking to raise bank funding to meet its payment obligations and it shall repay all the petitioner's amounts promptly once it receives bank funding. These instances make it clear that the respondent always intended to make payments to the Operational Creditor and never in fact disputed the obligation. 18. The Operational Creditor also mentioned that the Honglitronics assignment which is in dispute in the present matter can also be dropped out from the ambit of current claim. Even if this is done, the amount comes well above the minimum required amount of ₹ 1 Lakh. 19. Here, it is pertinent to note that the Corporate Debtor has neither stopped placing orders to the Operational Creditor, nor has initiated any civil or criminal proceeding against them. Thus, we are of the firm belief that this is only an afterthought and concocted contentions of the Corporate Debtor which cannot be relied upon. 20. Moreover, the ledger accounts of the Corporate Debtor for the Financial Year 2016-2017 maintained by the Operational ..... X X X X Extracts X X X X X X X X Extracts X X X X
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