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TMI Blog2021 (12) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Member ( Judicial ) : Mr. Ashok Kumar Borah And Hon'ble Member ( Technical ) : Mr. Shyam Babu Gautam For the Operational Creditor : Mr. Gauraj Shah a/w Mr. Jeet Gandhi , Advocates For the Corporate Debtor : Mr. Jamsheed Master , Advocate i/b Ms. Asha Nair , Advocate ORDER Per : Shyam Babu Gautam , Member ( Technical ) 1. This is a Company Petition filed under section 9 ("the Petition") of the Insolvency and Bankruptcy Code, 2016 (IBC) by Mohite Infraprojects Private Limited ("the Operational Creditor"), seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Polo Queen Industrial and Fintech Limited ("the Corporate Debtor"). 2. The Corporate Debtor was incorporated 19.07.1984 under the Companies Act, 1956. Its Corporate Identity Number (CIN) is L72200MH1984PLC094539. Its registered office is at 304, A to Z Industrial Estate, Ganpat Rao Marg, Lower Parel, Mumbai - 400013. Brief Facts of the case: 3. On 5th February, 2016, the Corporate Debtor, through its Architects M/s. Parelkar-Ovalekar-Paria (Architects and Interior Designers) floated a Tender Notice and invited Tenders from interested contractors who were willing to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r further submits that they have raised in all 9 bills and all were admitted. 8 of the 9 bills were paid. The procedure as per the agreement for payment of bills raised by Operational Creditor required Corporate Debtor Architect's Architect certifying the works. This procedure is admittedly also completed. 10. The Operational Creditor further submits that the Corporate Debtor has on the basis of certification of work by the Architect of the Corporate Debtor booked the 9th bill in its accounts and had paid applicable TDS thereon and has filled from 26As. In the form 26AS, Corporate Debtor has in accordance with the certification deducted tax at source on the sum of ₹ 28,14,197/- and ₹ 5,39,368/-. Hence, the amount is due and payable as has been admitted. 11. Procedure for certification of bill and payment: i) As per Clause 4 of the Articles of Agreement, the special conditions (page 75 to 88 of the petition) and appendix (pages 889 to 93 of the Petition) of the tender document was to be read and construed as forming part of the Articles of Agreement dated 20th December 2017. ii) The relevant clause are 21, 32 and 34. Page 889 of appendix is also relevant- Clause 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orks or materials or to any manner dealt with in the Certificate, and in case of all the defects and insufficiencies in the work or material which a reasonable examination would not have disclosed. No Certificate of the Architect shall of itself be conclusive evidence that any works or materials to which it relates are in accordance with the Contract, neither will the contractor have a claim for any amounts which the Architects might have certified in any interim bill and paid by the Employer and which subsequently be discovered as not payment and in this respect the Employer decision shall be final and binding. The Architect shall have power to withhold any certificate if the work or any parts thereof are not being carried out to his satisfaction. The Architect may be any certificate make any correction in any pervious certificate which shall have issued by him. No Certificate of payment shall be issued by Architect if the Contractor fails to insure the work and keep them insured till the issue of Virtual Completion Certificate. Payments upon the Architects Certificate shall be made within the period named in the Appendix as Period of honoring Certificates have been delive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the mannerism of carrying out the work and the quality of work undertaken by the Operational Creditor as well as the defaults committed by the Operational Creditor are a matter requiring evidence to be led before a Civil Court of competent jurisdiction, therefore, the issues under consideration in the present Petition cannot be decided in a summary fashion as it would cause grave prejudice and unjust harm to the Corporate Debtor who will be deprived from putting forth his case. iii. The present Petition emanates out of a work contract for construction of a residential building towards a total consideration of ₹ 2,15,74,742/- against which the Operational Creditor has already been paid ₹ 2,85,51,818/- which is about ₹ 70,00,000/- in excess of the total construction value. The Corporate Debtor has the funds available to even pay the value of ₹ 34,00,000/- as has been claimed in the present Petition. The Petitioner has chosen to not complete the work as agreed under the contract and is clandestinely using the Insolvency & Bankruptcy Code as a tool to extort money from the Corporate Debtor. It is trite law that the Insolvency & Bankruptcy Code should n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the Architect's Certificate and the Petitioners themselves by their letter dated 13th September, 2019 (Exhibit "F" at page 254 to the Reply dated 24th February, 2021) stated as under: "Regarding the rectification work we have never denied our responsibility. We will execute the same as and when the weather conditions normalize. Also inform your site engineer / architect to certify our rectification work as it progresses. The said letter dated 13th September, 2019 bearing reference No. MIPL/PM/2019-20/015 is also copied to the structural architect mutually appointed by the parties being Parelkar Ovalekar Parpia." Further, it is pertinent to note that the Petitioners themselves had told the Respondents that they will obtain a fresh certificate from the Architect, however, no such certificate has been received till date and therefore, the submission made by Counsel relying upon an earlier certificate is wholly inconceivable. 16. The Construction Completion Certificate on the basis of which the Petitioners rely itself mentions a defect liability period which starts from 1st May, 2019 and continued till 30th April, 2020 and uses the words "virtually completed" which in itself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the "existence" of a dispute or the fact that a suit or arbitration proceeding 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 adjudicating authority has to reject the application." (Emphasis supplied) 22. In Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC 407 : (2018) 1 SCC (Civ) 356 : 2017 SCC On Line SC 1025 at page 438 The Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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