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TMI Blog2021 (10) TMI 816X X X X Extracts X X X X X X X X Extracts X X X X ..... has been deducted on all invoices including unpaid invoices. Pre-existing dispute or not - HELD THAT:- In the present case, the existence of pre-existing dispute by the Corporate Debtor is not tenable as there is no correspondence on record where any dispute with respect to quantity or quality was raised by the Corporate Debtor on receipt of even a single unpaid invoice by the Corporate Debtor. The Corporate Debtor has not raised any occurrence of pre-existing dispute even in the reply of Demand Notice dated 12.06.2021. The Corporate Debtor has admitted the existence of debt and default through various confirmation letters sent by the Operational Creditor and countersigned by the Corporate Debtor. In view of the above correspondences, the debt and default in this case is established and the above company petition is liable to be admitted - Application admitted - moratorium declared. - C.P. (IB)/1393/MB-IV/2020 - - - Dated:- 2-8-2021 - Rajesh Sharma, Member (T) And Suchitra Kanuparthi, Member (J) For the Appellant : Amir Arsiwala, Advocate For the Respondents : J.P. Sen, Ld. Senior Advocate ORDER Rajesh Sharma, Member (T) 1. This Company Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,16,027/- in Cash and overdue interest @18% p.a. of ₹ 1,09,52,670/- till 02.08.2019. 7. The Counsel for the Petitioner submits that the Operational Creditor sent another letter dated 06.02.2020 to the Corporate Debtor demanding the payment of the operational debt amounting to ₹ 2,54,40,604/- plus ₹ 5,16,027/- in Cash and overdue interest of ₹ 53,59,186/- plus further interest from 03.08.2019 to 31.01.2020 of ₹ 27,56,595/-. 8. The Counsel for the Petitioner submits that the Corporate Debtor issued 20 Post-dated cheques of ₹ 5,00,000/- each in favour of the Operational Creditor in pursuance of interest overdues as mentioned in the Debit Notes. The details of the said Cheques of ₹ 5,00,000/- each are as follows:- S No. No of cheques Status 1 10 Honoured 2 2 Dishonoured (Fund Insufficient) 3 8 Not Deposit , Returned Back to the Corporate Debtor 9. The Counsel for the Petitioner submits that the remaining 8 cheques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sement that they had been received for verification which further substantiates the stand of the Corporate Debtor that verification was mandatory and, in the absence, thereof, the Operation Creditor cannot claim monies to be due or the Corporate Debtor to be in default. 17. The Counsel for the Corporate Debtor/Respondent submits that Corporate Debtor has also always maintained that it's the arrangement with the Operational Creditor that the payment would be made on a payable when able basis; meaning thereby that the Corporate Debtor would be liable to pay when it was able to pay. Even the correspondence between the Parties bears out that both understood that payable when able was intrinsically linked with the necessity to complete a proper reconciliation and verification exercise. 18. The Counsel for the Corporate Debtor/Respondent submits that Demand Notice under Section 8 of the Code was issued on 12th June 2020. The conduct of the Parties and stand taken in correspondence exchanged prior to 12th June 2020 plainly and indisputably demonstrates the existence of a pre-existing dispute. 19. The Counsel for the Corporate Debtor/Respondent submits that the Corporate D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orate Debtor/Respondent submits that due to the pre-existing dispute, the Operational Creditor sent Demand Notice Section 8 Notice of IBC in June 2020 in haste; without providing the documents or carrying out the reconciliation. No documents or materials are submitted by the Operational Creditor to show that the hoarding advertisement services were provided by the Operational Creditor. 26. The Counsel for the Corporate Debtor/Respondent submits that it is necessary for the Operational Creditor to submit documents and materials on record as evidence to show the actual provision of the hoarding advertisement services, in view of the dispute/denial raised by the Corporate Debtor in its letters prior to the Demand Notice under Section 8 of IBC. 27. The Counsel for the Corporate Debtor/Respondent submits that the Operational Creditor cannot seek initiation of the CIRP without placing on record documents to prima facie demonstrate the actual provision of services, especially when a dispute was raised in relation thereto prior to invocation of the provisions of the Code. 28. The Counsel for the Corporate Debtor/Respondent submits that given the nature of the advertisement service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strate that the services were provided. In any case, all the invoices in fact bear an endorsement that they had been received without being checked and/or bear an endorsement that they had been received for verification. This further substantiates the stand of the Corporate Debtor that verification was mandatory and, in the absence, thereof, the Operational Creditor cannot claim monies to be due or the Corporate Debtor to be in default. 35. The Counsel for the Corporate Debtor/Respondent submits that the Petitioner claims that the invoices were issued pursuant to certain written confirmations (which are annexed after each invoice in the Petition), factually the invoices do not even refer to the date or number of the written confirmation. 36. The Counsel for the Corporate Debtor/Respondent submits that the Petitioner has sought to rely upon certain tabulated statements in the Petition and an impression is portrayed as if the same were part of the invoices/written confirmations. The said statements were not provided with the invoices/written confirmations and most of them do not even co-relate to the invoices. There is/are no tabulated statements in support of some of the invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational Creditor, whilst seeking an accounts reconciliation and verification exercise. Moreover, no TDS certificates or any other documentary material on record as evidence to show the deposit of TDS has been produced by the Operational Creditor; there is no document on record which indicates the payment of the TDS. 41. The Counsel for the Corporate Debtor/Respondent submits that the deposit of TDS is at best an acknowledgment of an expected liability and by itself, it does not give any basis for claiming recovery of dues/monies; established via judicial precedents in the past. 42. The Counsel for the Corporate Debtor/Respondent submits that the Operational Creditor has sought to compute the date of default to be 60 days from the date of each of the invoices on which the Petition is filed. None of the invoices provide that the payment was to be made within 60 days of the date of the invoice or that interest was to be computed on payments not made within 60 days of the date of the invoice. Even the written confirmation letters/purchase orders do not contain any such stipulation. 43. The Counsel for the Corporate Debtor/Respondent submits that it was required to make payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due and payable by the Corporate Debtor to the Operational Creditor [Ref. Exhibit 3, Pg. 18]. As per provisions of the Income Tax Act, TDS is to be deducted on payment to the payee or crediting the amount, whichever is earlier. Here, TDS has been deducted on all invoices including unpaid invoices. Further, Section 194C of the Income Tax Act provides as follows: 194 C. (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to-- (i) one per cent where the payment is being made or credit is being given to an individual or a Hindu undivided family; (ii) two per cent where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family, of such sum as income-tax on income comprised therein. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst Sai Estate Consultants Chembur Private Limited. a. This Bench hereby appoints Mr. Vasudev Ganesh Nayak Udupi insolvency Professional, Registration No: IBBI/IPA-001/IP-P00019/2016-17/10043 having Email: [email protected] and Contact No. 9869637407; as the Interim Resolution Professional to carry out the functions as mentioned under the Insolvency Bankruptcy Code, 2016. b. The Operational Creditor shall deposit an amount of ₹ 5,00,000/- (Rupees Five Lakh only) towards the initial CIRP cost by way of a Demand Draft drawn in favor of the Interim Resolution Professional appointed herein, immediately upon communication of this Order. c. That this Bench hereby prohibits the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property ..... X X X X Extracts X X X X X X X X Extracts X X X X
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