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2020 (10) TMI 490

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..... taken into consideration. Since it is specifically mentioned in Section 8(2) of the Code that within ten days from the date of the receipt of the demand notice, the corporate-debtor is required to bring to the notice of the operational-creditor, the existence of dispute or the documents regarding the payment of debt, therefore, we have no option, but to hold that since the corporate-debtor fails to give the reply of the demand notice and raised the disputes, hence after his appearance in response to the notice, he cannot raise it by filing the reply to the application, filed on behalf of the operational-creditor. Since, no dispute has been raised in pursuance of the demand notice issued under Section 8(1) of IBC, 2016, therefore, any dispute raised after the appearance of the respondent in pursuance to summons issued after filing the main application is not liable to be accepted - in view of Section 9(5)(i)(a) since the application is complete, the invoice for notice of the payment to the Corporate Debtor has been delivered by the Operational Creditor, there is no payment of unpaid operational debt, which is more than ₹ 1 Lakh, which is the minimum threshold U/S 4 of th .....

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..... #8377; 29,92,633/-, TIGOSI003/1718 dated 20.09.2017 for ₹ 20,96,294.03/-, TIGOSI004/1718 dated 29.03.2018 for ₹ 17,06,308.39/-, TIGOSI004/1718 dated 11.06.2018 for ₹ 620,584.91/- and final DLPTIGOPI005/1819 dated 29.12.2018 for ₹ 1,287,690.00/-, these were duly accepted, acknowledged by the Corporate Debtor. In due course of time, the Corporate Debtor made part payment of ₹ 2,36,91,544/- to Operational Creditor and TDS of ₹ 5,08,840/-directly to Income Tax Authorities and a total a sum of ₹ 46,51,634/- is due against the Corporate Debtor. The Operational Creditor on first week of April, 2018 handed over significant part of the hotel after completion for commercial usage of Corporate Debtor are as follows: a. Hotel Suite-22 Rooms (One Balance due to Incomplete work from Corporate Debtor), b. ADD Building (Compromising of restaurant, kitchen and Bar), c. Villa Nos. 6, 7, 8, 9 10 (Total 35 Rooms) d. Cabana Building (Compromising of Coffee Shop Gym) e. General Works as external lighting, HVAC plumbing plant room, engineering area, BOH Area. f. Beach Bar Area, g. All major electrical system components such as transform .....

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..... ate debtor substantiating existence of dispute and the entire agreement executed between the parties and the same are being placed on record by the Corporate Debtor. iv. That the petitioner in the demand notice issued claimed outstanding amount of ₹ 46,64,878/- whereas in the instant petition filed the petitioner claimed outstanding amount of ₹ 46,51,634/- which once again demonstrate existence of dispute even in the quantum of debt claimed. v. That the corporate debtor made payment in part as adhoc payment in terms of work order against running bill, which cannot be construed as acceptance of bills issued and same stand fortified by mail dated 05.11.2018. 6. We have heard the Learned Counsels appearing for the Applicant and Respondent. Learned Counsel appearing for the applicant, in course of his arguments, submitted that the respondent/Corporate Debtor has failed to give reply to the demand notice as required under Section 8(2) of IBC, 2016. Therefore, he is not permitted to raise the dispute at the later stage. He further submitted that as per the agreement the Operational Creditor has handed over the hotel after completion of the work. He further submitted .....

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..... ed by the applicant at page 83 of Paper book. When we shall read the tracking report of the Indian Post, which is at page 83, alongwith the averments made by the respondent in the written synopsis at page 9 then we are of the considered view that the applicant has delivered the demand notice dated 11.04.2019 on 16.04.2019 and as per Section 8(2) of the IBC, 2016, the Corporate Debtor is required to give reply within 10 days of the receipt of the demand notice or the copy of the invoice mentioned in Sub-Section (1) of Section 8 of the IBC, 2016, but admittedly, the respondent has failed to convince us that he sent the reply within the statutory period. Of Course, in course of his argument, he claimed that he sent an email dated 29.04.2019, in response to the demand notice issued by the applicant under Section 8(1) of the IBC, 2016. As we have already discussed the aforesaid email and we find that it is not the reply in response to the demand notice under Section 8(1) of the IBC, 2016, therefore, the contention of the respondent that the affidavit filed by the applicant under Section 9(3)(b) is false, is not liable to be accepted, rather we are of the considered view that the respond .....

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..... 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, if available;) 2[(d) a copy of any record with information utility confirming that there is no payment of an unpaid operational debt by the corporate debtor, if available; and (e) Any other proof confirming that there is no payment of any unpaid operational debt by the corporate debtor or such other information, as may be prescribed.) (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 .....

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..... er Section 8(2) of the Code, only in that case the Operational Creditor may file an application for initiation of the CIRP. If we shall read these two provisions together then we find, before initiating a proceeding under Section 9, the operational-creditor is required to fulfil the conditions mentioned under Section 8(1), if he has not sent the demand notice as required under Section 8(1) of the Code, then he cannot invoke the provision under Section 9, rather he can invoke the provision of Section 9 only, when Corporate Debtor fails to raise the existing of disputes or produce the document to show that unpaid operational debt has been paid within ten days of the receipt of the demand notice. Therefore, on the basis of aforesaid provisions, we are of the considered view that Section 8 and 9 cast a duty upon the operational-creditor as well as Corporate Debtor to act as per Section 8 and if they fail to fulfil the conditions of Section 8 and 9 then in that case neither the application filed by the operational-creditor is maintainable nor the plea of existing of disputes or the payment of debt subsequently taken by the Corporate Debtor can be taken into consideration. 11. At this .....

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..... ure, we would also like to refer the decision reported in the case of Nathi Devi v. Radha Devi Gupta 2005 (2) SCC 271, and we find that Hon'ble Supreme Court in Para 14 of the judgment held that: It is equally well settled that in interpreting a statue, effort should be made to give effect to each and every word used by the legislature. The courts always presume that the legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statue should have effect. A construction which attributes redundancy to the legislature will not be accepted except for compelling reasons such as obvious drafting errors. 13. In the light of that decision, when we shall consider the case in hand then we are of the considered view that since it is specifically mentioned in Section 8(2) of the Code that within ten days from the date of the receipt of the demand notice, the corporate-debtor is required to bring to the notice of the operational-creditor, the existence of dispute or the documents regarding the payment of debt, therefore, we have no option, but to hold that since the corporate-debtor fails to give the reply of the demand notice an .....

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..... atorium period. (3) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. (4) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process: Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of corporate debtor under section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be. 17. The Operational Creditor has not proposed the name of any IRP. Accordingly, we appoint, Mr. Sunil Kumar Gupta, an Insolvency Professional, Registration No. IBBI/IPA-001/IP-P00205/2017-18/10394, email: [email protected] duly empanelled with the IBBI as the IRP. He is directed to take such steps as are mandated under the Code, more specifically under Sections 15, 17, 18, 20 and 21 and shall file his report before the Adjudicating Authority. 18. The Operational Creditor i .....

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