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TMI Blog2021 (9) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... pute over the claim of the applicant within 10 days, as prescribed under Section 8 of the Code, vide its reply to the Demand Notice dated 28.01.2021. The Corporate Debtor in reply to the demand notice, has referred to the Arbitration Proceedings and claimed pre-existing dispute - further the applicant itself had initiated the Arbitration Proceeding to resolve the dispute relating to its claim, which resulted in dismissal of the claim being pre-mature. The documents on record sufficiently indicate that there has been a pre-existing dispute between the parties prior to issuance of demand notice. Hence, there being a pre-existing dispute and a situation in which the Applicant/Operational Creditor itself has referred the dispute to the Arbitrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, it is the case of the Applicant that the Corporate Debtor/Respondent purchased 2000 metric tons of Crude degummed Soyabean Oil of edible grade in bulk supplied by applicant for which an Invoice being SI. No. 01/2018-19 dated 09.05.2018 for an amount of ₹ 9,57,70,000/- was raised. It has been added that towards the aforesaid invoice, a payment of ₹ 6,50,34,000/- only has been received till date and an amount of ₹ 3,07,36,000/- remains due and payable. 4. Further, the Corporate Debtor/Respondent purchased 5000 metric tons of Crude Palm Oil of edible grade in bulk supplied by applicant for which an Invoice being SI. No. 10/2018-19 dated 05.11.2018 for amount of ₹ 19,07,50,000/- was raised, against which no paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n no-objection for referring the dispute to the Sole Arbitrator proposed by the Applicant. 8. That the Ld. Sole Arbitrator Mr. Sanjiv Kumar, Additional District and Session Judge (Retd.) passed an Arbitral Award dated 24.09.2019, whereby the claim of the Applicant was dismissed being pre-mature. It is stated in the Award that since as per agreement, the Applicant had to raise issue of quality with the supplier first, on the basis of the complaint of the Respondent for supplying inferior & deteriorated quality of material on 'As is Where is Basis" which was totally unfit for human consumption. 9. The scanned copy of the Arbitral Award dated 24.09.2019 as attached by the Applicant with the application is reproduced below: 10. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o file reply and therefore, their right to file reply was closed. Ld. Counsel for the Corporate Debtor argued that there has been existence of a dispute prior to the service of demand notice, for which the application is not maintainable. He further added that the Corporate Debtor, in its reply to the Section 8 Demand Notice, has stated that the dispute was referred by the Applicant to the Sole Arbitrator, who has rejected the claims/counter claims of both the parties. Arguments of the parties were heard and the order in the matter was reserved. 14. After hearing arguments of both the parties and going through the application and documents on record, we observe that the present claim of ₹ 22,14,86,000/- of the Applicant has arose out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edies to recover its Claim with the Supplier till the last stage. The Counter Claim of the Respondent is also resultantly dismissed and will be considered only after the claimant has failed to take all possible legal remedies to recover the Claim of the Respondent with the Supplier. ......." 16. We further notice that the Operational Creditor has claimed the same amount of ₹ 22,14,86,000/- in Part IV of the present Petition filed under Section 9 of the IBC 2016, which was the subject matter of the Arbitration (initiated at the behest of the Applicant) and already rejected by the Ld. Arbitrator. That further, there is no submission made by the Applicant/Operational Creditor in its Petition with regard to the steps taken for rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeding 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 requires 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. However, in doing so, the Court does not need to be satisfied that the defence is likely to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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