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TMI Blog2020 (9) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case, it is clear that such notice must bring to the notice of 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 to see at this stage is whether there is a plausible contention which required further investigation and that the dispute is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. Section 9(5) (ii) (d) of the Code, specifically provides for considering Dispute by the Adjudicating Authority, empowering it to reject the Application and communicate the decision to the Operational Creditor and Corporate Debtor, if notice of dispute has been received by the Operational Creditor - IBC is not a recovery law . Its purpose is to save the companies and also to allow them to be going concern. Again, email dated 06.07.2017 does show pre-existing dispute regarding quality of supply. The impugned order dated 19.02.2020 passed by Adjudicating Authority ( National Company Law Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor and Operational Creditor is attached and is at page No.109 and 110 of the Appeal paper book. They have also submitted references to other emails. The Appellant has confirmed receipt of Demand Notice dated 10.03.2018 and he has replied to the same vide its Letter dated 13.03.2018 and has informed that the Corporate Debtor has to incur huge losses because of poor quality of paper tubes. They have also asked to depute company representative along with quality control personnel to visit their plant and take back the rejections. They have also given them option to settle all pending dues and disputes, if any. 4. The Respondent No.1 has denied the issue of supply of inferior quality of goods as also that the Corporate Debtor had admitted the liability. They have also denied that the Settlement proposal given by Corporate Debtor was under any duress. They are also raising the issue of created problem by the Corporate Debtor to lift back some value of goods to reduce their financial burden and re-scheduling of dues. They are also raising that the Corporate Debtor is passing through tough time for last six to eight months and hence are raising such inferior quality supply issue to bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods. Further some amount was allowed towards the expenditure met by the 1st respondent in arranging additional facilities for avoiding leakage. Even in the plaint it was alleged that as a result of the leakage, the ceiling made of plaster of paris had been damaged and additional amount had to be spent for safeguarding the above ceiling. Thus additional expenditure had to be met by the 1st respondent for safeguarding the ceiling due to the dripping of water from the roof by providing pitamin coated Hassan clothes over the plaster of paris over the entire area. It was a case where the 1st respondent was entitled to compensation under Sub-section (2) of Section 59 also. Thus the 1st respondent was entitled to compensation for the breach of the implied warranty. The Court below was fully justified in granting a decree for a portion of the claim put forward in the plaint and I see no reasons to interfere with the amount decreed by the Court below. 15. Another argument advanced by the learned counsel for the appellant was that the Court below had no territorial jurisdiction to try the suit as the sale took place at Coimbatore in Tamil Nadu. The article were sold for being used at Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not able to fulfil various customers orders, resulting into loss of around ₹ 32,00,000/-, Thus, as per Section 13 of Sale of Goods Act, 1930 the Corporate Debtor has legitimate claim of damages against the Operational Creditor (Respondent No.1). 8. The Appellant has also alleged that their settlement proposal dated 05.07.2018 was after admission of the case before the Adjudicating Authority. While they have already raised the issue of dispute in the reply to the demand notice as well as while filing reply before the Adjudicating Authority. However, getting sacred about the filing petition and hearing of the case, they have to give the settlement proposal. They were worried not only for the family of the Directors but more than 100 workers and their family dependent on the Corporate Debtor. Submission of settlement proposal is always without prejudice to the rights and contentions of the parties and, therefore, any admission made in the settlement proposal cannot be used against the Corporate Debtor. They have also given the following citation to supplement their proposition: Kamta Prasad and Ors. Vs. Ram Agyan and Ors., AIR 1952 All 674, Para No. 11 12, it is obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave evidence against his own client and clearly without the latter's consent. Even eliminating the evidence of this witness the evidence of the defendant himself and his munim, coupled with the books, does establish that the defendant received a lesser sum than that which appears on the face of the note. Sri Bauribandhu Mohanty and Ors. Vs. Sri Suresh Chandra Mohanty and Ors., AIR 1992 Ori 136 Para 10 11, it is observed as under: Para 10 - The Opposite Parties have relied on a decision the Division Bench of the Allahabad High Court in the case of Shib Charan Das v. Gulabchand Chhotey Lal MANU/UP/0197/1935, wherein the High Court has held thus(At page 158) : xx xx xx. Negotiations were being conducted with a view to settlement, and that being so, we are bound to hold that these negotiations were conducted 'without prejudice'. In such circumstances it is not open for one of the parties to give evidence of an admission made by another. If negotiations are to result in a settlement each side must give away a certain amount. If one of the parties offers to take something less than what he later claims he is legally entitled, such must not be used aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guilty for cruelty and was seeking apology from his wife's father. Undoubtedly, if the said letter is produced on the record, it would seriously damage the case of the husband. Reference was made by the Court below to the provisions of Section 23 of the Indian Evidence Act, which read as under:-- In civil cases no admission is relevant, it is made either upon an express condition that evidence of it is not to be given, or under circumstances from which the court can infer that the parties agreed together that evidence of it should not be given. Para -5. A perusal of this section would show that if an admission is made upon an express condition that evidence regarding it would not be given or under circumstances from which the Court could infer that the parties had agreed that the evidence regarding it would not be given, then such an admission would not be relevant. In the present cases, as I have already said, both the parties were trying to effect a compromise and during that interval, the said letter was written by the husband. It may be stated that the husband has frankly admitted that he did write that letter, but he claimed privilege regarding the same on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the dispute has been raised also against the reply to the demand notice and the demand notice was replied within due time as per the provisions of the Code. The Hon ble Apex Court has observed in Mobilox Innovative Private Limited Vs. Kirusa Software Private Limited in Civil Appeal No. 9405 of 2017 that 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 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 to see at this stage is whether there is a plausible contention which required further investigation and that the dispute is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the operational creditor to the corporate debtor; (b) an affidavit to the effect that there is no notice given by the corporate debtor relating to a dispute of the unpaid operational debt; (c) a copy of the certificate from the financial institutions maintaining accounts of the operational creditor confirming that there is no payment of an unpaid operational debt by the corporate debtor; and (d) such other information as may be specified. (4) An operational creditor initiating a corporate insolvency resolution process under this section, may propose a resolution professional to act as an interim resolution professional. (5) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order- (i) admit the application and communicate such decision to the operational creditor and the corporate debtor if,- (a) the application made under sub-section (2) is complete; (b) there is no repayment of the unpaid operational debt; (c) the invoice or notice for payment to the corporate debtor has been delivered by the operational creditor; (d) no notice of dispute has been received by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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