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TMI Blog2019 (10) TMI 1476X X X X Extracts X X X X X X X X Extracts X X X X ..... ower Services private Limited was incorporated on 27.09.1999 having its registered office situated at 7 - Institutional Area, Lodhi Road, New Delhi - 110003. Since the registered office of the respondent company is in New Delhi, this Tribunal having territorial jurisdiction over the NCT of Delhi is the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process in respect of the respondent corporate debtor. 3. The Applicant, M/S New Engineering Works, is a sole proprietorship construction firm, engaged mainly in mechanical construction work and has its office at 144, Narasingha Dutta Road, 1st Floor, Block-C, P.O. Kadamtala, Howrah 711101. The instant Application has been filed by Mr. Utpal Kumar Guha, being the sole proprietor and authorized representative of the applicant sole proprietorship firm. 4. It is the case of the applicant that the Respondent Company issued work order, inter-alia, on 10th June 2015 for carrying out Electrical Erection Works and electrical works with Project Narne GSECL UKAL ESP 2X200 MW at Unit 3 & 4 for a total price of Rs. 50,00,000/- (Rupees Fifty Lakhs only). 5. The work order provided for payment ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dred and Sixty Six only) both aggregating to Rs. 1,42,72,787/- (Rupees One Crore Forty Two Lakhs Seventy Two Thousand Seven Hundred and Eighty Seven only) were also raised during 19.04.2016 to 20.04.2018 for the additional work done. 10. It is also asserted that the Respondent Company issued the work completion certificate on 31/07/2017 to the Applicant certifying that the work assigned was completed to their entire satisfaction. 11. It is alleged that the Applicant approached the Respondent Company by way of several emails and telephone calls for the release of its outstanding payments but the respondent has failed to make payment in respect of the invoices submitted to them. 12. Consequently, applicant served a Demand Notice in Form 3 in accordance with Section 8 of the Code read with Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 dated08.03.2019 on the Respondent Company. It is submitted that the Respondent Company wrote a letter dated 18.03.2019 to the Applicant enquiring about the nexus between the Applicant and the Advocate and failed to bring out any dispute. 13. The Respondent company has filed its reply on 13.08.2019 allegin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was rightful on part of the Corporate Debtor to withhold the liquidated damages as per clause 17.4 of the General Conditions of Contract which provides that "the liquidated damages amount, if any shall be deducted from the payments under the contract or by invoking the contract perforrnance guarantee and/or otherwise". 20. It is argued that there is serious and genuine dispute between the parties and that the respondent has an offsetting claim. A letter dated 26th July, 2019 of the applicant asking Indian Overseas Bank to stop encashment of guarantee invoked by the respondent and the reply dated 30.07.2019 of the bank requiring to produce specific court orders for restraining payment of guarantee, have been placed on record. 21. The precise case of the respondent is that the operational debt in question is disputed and as the dispute has been raised much prior to the Section 8 notice, the present application filed under Section 9 of the Code is liable to be rejected. 22. Heard the learned counsels for the parties and perused the case records. 23. Before discussing the merits of the elaborate contentions of the parties, it is relevant to point out certain provisions and prece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services, inter-alia, Mechanical and electrical services ESP retrofit for U#3 & 4 for Ukai TPS. 2. The said purchase orders included, inter-alia the following clauses- a. Maximum liquidated damages would be levied @ of the contract value in case of WO 0028 and 20% in case of WO 0029 in case of delay in execution of works. b. "Scope of services under this order shall also include all such services which have not been specifically brought out in the technical specifications read in conjunction with your offer but are necessary for the execution of work". 3. Work execution is delayed considerably, and LD was levied as per the provisions of the Purchase Order. The amount of LD was adjusted against 4. Further your additional work bills were not confirmed bu us and shall be deemed to be covered under Para 2b mentioned herein above, forming part ofpurchase orders, without costs. 5. As such there are no dues payable to you. 6. We also invite your attention for the resolution of the differences/ dispute as per purchase orders. In case you are not in agreement, we request to settle the matter as mentioned above without project team. Thanking you, Yours faithfully ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application. " 33. Therefore, there is also no dispute that this is not the forum to examine and adjudicate as to what extent the claim of the petitioner is admissible as due and recoverable. Neither the Tribunal in the proceedings under Section 9 will examine the merits of the respective disputes. Moreover, even the adequacy of dispute is not to be seen. It is only to be seen whether the dispute raised by the corporate debtor qualifies as a 'dispute' as defined under sub-section (6) of Section 5 of the Code. 34. Therefore, the only issue before us is whether there is an existence of a dispute between the parties that would fall within the inclusive definition contained in Section 5(6) of the Code. 35. In the present case the respondent has disputed that the additional work bills dated 20.04.2018 amounting to Rs. 23,59,966/- and Rs. 1,19,12,821/- respectively have never been acknowledged and certified by the respondent company. It is specifically alleged that the said amount of the bills was never part of the work order and has been raised unilaterally by the applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, we request you to produce specific Court order upon our Bank restraining payment of Guarantee amount to the beneficiary, if not produced bank will be bound to make payment to the said beneficiary as per norms. Thanks & regards Kumar Satyam Chief Manager" 39. The aforesaid letter of the applicant shows that a request was made to Indian Overseas Bank to stop encashment of the bank guarantee invoked by the respondent. The bank guarantee invoked by the respondent company was for adjustment of the dues and therefore there appears to be clear dispute in respect of the operational debt in question. 40. In the facts there appears existence of a genuine dispute between the parties. The respondent has also an offsetting claim. These are matters of trial and enquiry. Tribunal in the present proceeding cannot go into roving enquiry into the disputed claims made by the parties. This is not the forum to examine and adjudicate as to which portion of the claims or counter claims are admissible. At this stage it is immaterial to consider who will succeed. Tribunal will not examine the merits of the dispute other than to see if there is in fact exists a real dispute having some substance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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