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TMI Blog2020 (10) TMI 495X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim can be counted provided the application meets the criteria of Section 8 9 of the Code. The Object of the Code is not recovery of money but to bring out of insolvency and maximization of value of assets of the Corporate Debtor. It is also very much clear that if there is a dispute as per relevant provisions of the Code, it is incumbent on the Adjudicating Authority to reject the petition/application as per the provisions of the Section 9 of the Code. It is also very much clear in this case that there is a dispute of the Debt and dispute resolution mechanism is also provided in the purchase order. Since the I B Code, 2016 debars the application of the Code for recovery of money as well as if there is a dispute then also petition/application requires to be rejected. The Hon ble Supreme Court has already held in Mobilox Innovations Pvt. Ltd., Vs. Kirusa Software pvt. Ltd. [ 2017 (9) TMI 1270 - SUPREME COURT ], that IBC is not intended to be a substitute for recovery forum. It is also laid down that wherever there is existence of real dispute, the IBC provisions cannot be invoked - Since Hon ble Apex Court has clearly laid down the mechanism to be operated by Operational Credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Debtor/Respondent No.2 is engaged in the business of manufacturing of pre-fabricated shed, industrial roofing sheet, pre-engineering building etc., for which it requires various material produced by the Respondent at various sites. 5. The Operational Creditor/Respondent No.1 is engaged in the business of supply of Angel, Channel, TMP, GP/CR/GC Sheet. 6. The Respondent No.1 used to supply material to Respondent No.2 for completing its various projects at various sites and it was a normal business practice to seek delivery of required material at project site itself. It was also usual practice between the parties to ask its clients to make direct payment to the Respondent No.1 suppliers. 7. The Appellant has made following submissions: a. Pre-existing dispute:- The Operational Creditor vide email dated 05.02.2018 has sent an email to the Corporate Debtor asking for payment of outstanding bills and has even asked for PDC Cheque for all bills. The Respondent No.1/Corporate Debtor has responded to the same on 29.03.2018 to the Operational Creditor Your ledger is not matching with our ledger and TC also not came with the vehicle. Those invoices are not showing PO No. will not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave also alleged that the statutory notice of demand as per section 8 (1) of the Code was defective as they were not accompanying copy of the invoices. 8. The Operational Creditor/Respondent No.1 has submitted that the Appellant was purchasing steel material from November, 2016 to October, 2017 in the M/s. Saturn Pre Fab India Pvt. Ltd. (Respondent No.2) and in the name of Saturn Fabricator and has alleged that the Corporate Debtor has not produced the ledger of M/s. Saturn Pre Fab India Pvt. Ltd (Respondent No.2) and provided the ledger of Saturn Fabricator (Saturn Infra). 9. The Respondent No.1 has also alleged that the 27 invoices what the Appellant is alleging as fabricated are based on purchase order/telephone calls/transport bills etc. They have also submitted that out of the 27 invoices as per para 14 of the counter affidavit dated 11.08.2020, there are 7 invoices which are disputed and value of which is approx. 30 lacs they have received payment of ₹ 28 lacs as per para 15 of the same counter affidavit. The operational creditor vide para 21 of the counter affidavit dated 11.08.2020 has alleged outstanding payment of ₹ 1, 28,15,725/- as on 26.06.2017. They have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alidity of termination, performance under this purchase order or in case of disagreement on or non-supply of product shall be referred to sole arbitrator and finally resolved in accordance with the provision of Arbitrator and counsillation Act, 1996. The award passed by the sole arbitrator shall be final and binding to both the parties. The language of the arbitration including its proceedings and documents to be exchanged there of with sole arbitrator and between the parties shall be Hindi. The place of arbitrator shall be at Indore M.P. e. Governing law and jurisdiction - the contract shall be governed by and construed in accordance with the provisions of Indian laws. The courts at Indore M.P. shall have exclusive jurisdiction in all the matters relating to this purchaser order. While purchase order at page 300 of the Appeal Paper book reflects: f. Payment Terms - 30 days against delivery. g. Delivery You will dispatch the entire ordered quantity within immediate from the receipt of the order. Whereas the invoice is stating the conditions as follows which is mentioned at page 175 of the Appeal Paper book: a. Interest will be charged @24 % per annum on all bills remaining unpaid w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the demand notice or copy of the invoice mentioned in sub-section (1) bring to the notice of the operational creditor- (a) existence of a dispute, if any, and record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute; (b) the repayment of unpaid operational debt- (i) by sending an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the corporate debtor; or (ii) by sending an attested copy of record that the operational creditor has encashed a cheque issued by the corporate debtor. Explanation.-For the purposes of this section, a demand notice means a notice served by an operational creditor to the corporate debtor demanding repayment of the operational debt in respect of which the default has occurred. Section 9-application for initiation of Corporate Insolvency Resolution Process by Operational Creditor: Section 9 -. (1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icating Authority, shall before rejecting an application under subclause (a) of clause (ii) give a notice to the applicant to rectify the defect in his application within seven days of the date of receipt of such notice from the adjudicating Authority. (6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of this section. 18. Since Hon ble Apex Court has clearly laid down the mechanism to be operated by Operational Creditor in terms of Section 8 9 of the Code, it is very clear that the undisputed debt is sine qua non of initiating CIRP as also the debt should be due and payable. Since, the order of Adjudicating Authority in the present case, as enumerated above, does not meet the above criteria and hence the appeal needs to be allowed. We are not passing any comment on the merit of the dispute between the parties and the parties are free to approach appropriate forum for recovery or dispute resolution. 19. In a case of running account where accounts are yet to be reconciled and settled, an email like 05.02.2018 sent before Section 8 demand notice dated 13.06.2018 asking Operational Creditor to take back th ..... 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