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TMI Blog2020 (6) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... ute the existence or amount of unpaid operational debt of ₹ 8,44,49,943 provide the undersigned within ten days of the receipt of this letter, of the pending of the suit or arbitration proceedings in relation to such dispute filed before the receipt of this letter notice . The instant company petition was filed before expiry of 10 days' time from the date of the receipt of the copy of the demand notice. Therefore, the petitioner without giving any sufficient opportunity to the respondent has rushed to this Adjudicating Authority by filing the instant application by not disclosing the material facts of the case. The petitioner is supposed to advert to the arbitration application filed by the respondent. The instant company petition is filed with an intention to recover the disputed outstanding amount in question, which is not permissible under law - instant petition is disposed off by granting liberty to the parties to prosecute arbitration application, which is already pending, and to take next course of legal action, after arbitration. proceedings concluded - C. P. (IB) No. 34/BB/2020. - - - Dated:- 18-6-2020 - Rajeswara Rao Vittanala Judicial Member And Ashut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d believing them in good faith to be true, the operational creditor supplied materials to corporate debtor. The problem arose between the parties when the corporate debtor made part payment for supply of materials and defaulted in making payment of ₹ 6,94,84,388 as on the date of issue demand notice under rule 5 of the I and B (AAA) Rules, i. e., November 18, 2019. (4) After continuous approaches and requests for outstanding payment, a meeting was conducted between managing directors of the operational creditor and corporate debtor, in which the corporate debtor assured that ₹ 75,00,000 will be released every month towards supply of grounds, inter alia, that the corporate debtor is unable to service its admit ted debts to its lawful the operational creditor in the ordinary course, and is as such unable to continue business in the foreseeable future as a going concern, unless managed as a going concern under the Code, by a duly appointed resolution professional. It is declared that the operational creditor has not filed any proceedings before the Adjudicating Authority, relating to the subject matter of this petition, nor has it instituted proceedings before any oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner's demand notice, nor any repayment, the corporate debtor is liable to be placed under the CIRP, under section 9 of the IBC, 2016. Hence, the present petition seeking to initiate CIRP against the corporate debtor. 3. The respondent has filed statement of preliminary objections dated June 9, 2020 by, inter alia, contending are as follows : (1) The demand notice issued in question is a defective one and it not attached any proof to show that the corporate debtor owes the petitioner the sum claimed. The demand notice issued in forms 4 and 5, which is a description of the total amount of debt allegedly due and payable by the respondent to the petitioner and also purported balance dated November 18, 2019 and another one dated March 22, 2019. As per section 8 of the IBC, and also form 4 requires the petitioner to provide a copy of the invoice, on which the amount is being claimed. (2) The respondent sent a reply dated December 9, 2019 notifying the petitioner about the existence of a dispute by way of proceedings pending before XXVIII Additional City Civil Sessions Judge, Mayo Hall Unit, Mayo Hall numbered vide A. A. No. 25025 of 2019, wherein the respondent h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rused the pleadings of the parties and extant provisions of the Code and Rules made thereunder and the law on the issue. 5. Shri Pullela S. Shastry, learned counsel for the petitioner, while reiterating averments in the petition, as briefly stated supra, has further filed his written submissions dated June 16, 2020 by, inter alia, contending as follows : (1) It is stated that all the invoices were prepared in triplicate, and while supplying the material, original invoice was handed over to corporate debtor. The operational creditor retained a copy of invoice duly acknowledged by the corporate debtor, and another invoice copy was handed over to transporter. Being a real estate development project the invoices for out standing amount ran to about 500 plus and were not enclosed due to unwieldy size and bulkiness. (2) As a matter of fact, no arbitration proceeding relating to the pre sent dispute has commenced. The respondent preferred before the civil court only an application under section 9 of the Arbitration and Conciliation Act, 1996 seeking grant of interim relief by way of restraining the operational creditor from acting on the balance confirmation letter issued b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a difference of ₹ 8,02,261. This difference was also further brought down by further reconciliation as on September 25, 2019. In both the balance confirmation e-mails dated September 21, 2019 and September 25, 2019 Mr. Manjunath Naik, DGM, who has signed the statement of preliminary objection and affidavit, was also marked. Apart from Mr. Manjunath Naik, DGM of the corporate debtor, Mr. Vijay, managing director of the corporate debtor and Ms. P. Ashwini, Ms. Shwetha, Mr. Pradeep Pandey, employees of the corporate debtor were also marked in the aforesaid balance confirmation e-mails. No objection to the balance confirmation issued on September 21, 2019 and September 25, 2019 was ever raised by any employee and/or Mr. Manjunath Naik. It was only when demand notice was sent by the petitioner, false allegation of purporting the balance confirmation was raised by the corporate debtor. (4) The operational creditor/applicant has got the liability due from the corporate debtor, as a record of default, deemed to be authenticated, with the National E-Governance Services Ltd., which is an Information Utility registered with Insolvency and Bankruptcy Board of India-IBBI on January ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s already sent reply dated December 9, 2019 to the demand notice dated November 18, 2019 which was received by them on December 6, 2019 by disputing the claim of the petitioner and also intimated about arbitration application bearing A. A. No. 25025 of 2019 before XXVIIIth Additional City Civil Sessions Judge, Mayo Hall Unit, Mayo Hall. The respondent has invoked the arbitration in terms of clause as available in the purchase order in question. Therefore, it is clear that there is pre-existing dispute and the instant petition is not maintainable under the provisions of the Code, and the documents filed by the petitioner are frivolous, fabricated and manipulated documents. Therefore, he urged the Adjudicating Authority to reject the petition. 7. The instant company petition is filed under section 9 of the Code, by, inter alia, seeking to initiate the corporate insolvency resolution process (CIRP) in respect of the corporate debtor. The primary conditions require to be fulfilled to file an application filed under section 9 of the Code, are that claim in question, there should be proper notice under the provisions of the Code on the other side ; debt should be prima facie establi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the IBC, 2016 is not intended to be substitute to a recovery forum. In another latest judgment rendered in Transmission Corporation of Andhra Pradesh Ltd. v. Equipment Conductors and Cables Ltd. (C. A. No. 9597 of 2018, dated October 23, 2018) [2018] 4 Comp Cas-OL 532 (SC) ; [2018] 147 CLA 112 (SC) the Supreme Court of India, it is, inter alia, held that existence of undisputed debt is sine qua non of initiating CIRP. As per paragraph 34 of the judgment, it is stated that Adjudicating Authority, while examining an application filed under section 9 of the Code, will have to determine : (a) Whether there is an operational debt as defined exceeding ₹ 1 lakh ? (b) Whether documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid ? (c) Whether there is existence of dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before receipt of demand notice of the unpaid operational debt in relation to such dispute ? If any one of the aforesaid conditions is lacking, the application would have to be rejected. 9. In view of the above facts and circu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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