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TMI Blog2022 (1) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... seeking admission of the petition, initiation of corporate insolvency resolution process, granting moratorium and appointment of interim resolution professional as prescribed under the Code and Rules thereon. 2. The averments of the petition filed by the petitioner/operational creditor in brief are described hereunder : (i) It is averred that pursuant to an understanding between the operational creditor and the corporate debtor, against the oral purchase order given by the corporate debtor, the operational creditor supplied and delivered Mild Steel Billets to the corporate debtor as per the specifications and raised tax invoices for an amount of Rs. 1,77,15,636 during the year 2015- 16 with 90 days credit and no dispute was raised at the time of delivery of Mild Steel Billets by the corporate debtor. (ii) It is averred that after continuous persuasion for payment, both the parties have entered into a memorandum of understanding on February 13, 2016 in which M/s. Abhirama Steels Ltd./corporate debtor referred as first party of the second part and Mr. Palaparthy Abhishek, who is the director of the corporate debtor referred as second party of the second part. The second party a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition filed by the operational creditor is devoid of merits, not maintainable and therefore needs to be dismissed in limine. (ii) It is averred that before commencement of the present application as per the Insolvency and Bankruptcy Code, the operational creditor is bound to send statutory demand notice to the corporate debtor. The operational creditor has not sent any statutory notice to the corporate debtor more particularly under section 8 of the IBC along with the said statutory notice operational creditor is also liable to send copy of an invoice demanding payment of the amount involved in default to the corporate debtor but whereas in the present case the operational creditor failed to give any demand notice to the corporate debtor under section 8 of the IBC. As such, the present application is liable to be dismissed on this ground alone. (iii) The corporate debtor is relied on the order of the Supreme Court of India in the case of Mobilox Innovations P. Ltd. v. Kirusa Software P. Ltd. [2017] 205 Comp Cas 324 (SC) in which it was held that the notice under section 8 of the IBC is a mandatory provision and the provisions of the Code have to be followed and section 8 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties and the present company petition has to be dismissed on this ground alone. (ix) It is denied that the operational creditor supplied Mild Steel Bil lets to the corporate debtor to the tune of Rs. 1,77,15,636. It is averred that the operational creditor is due and payable a sum of Rs. 57,50,785 to the corporate debtor due to loss faced by the corporate debtor because of defective material supplied by the operational creditor and the dispute is pending before the Xth Additional Chief Judge, City Civil Court, Hyderabad and the operational creditor has not filed any counter in the matter. This clearly establish the dispute between the parties, as such, the claim of the operational creditor is not maintainable and liable to be rejected. (x) It is averred that when the corporate debtor is not liable to pay principal amount, the question of interest much less the interest at 18 per cent. per annum does not arise. Further, it is also averred that the corporate debtor has never accepted any interest payment at any point of time. (xi) It is averred that the operational creditor filed C. P. No. 186 of 2006 before the hon'ble High Court of Telangana is not within the know ledge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is a dispute with regard to debt by the corporate debtor to the operational creditor as such the application of the operational creditor is liable to be dismissed on this ground alone. It is averred that in the present case, the operational creditor has used this hon'ble Tribunal as a tool for recovery of monies and such this application is liable to be dis missed with heavy cost on the operational creditor for wasting the precious time of the hon'ble Tribunal and creating multiplicity of disputes. (xv) It is averred that the present case before this hon'ble Tribunal is not maintainable and liable to be dismissed. It is also averred that when the civil suits are pending between the parties with regard to claim of amount by both the parties, filed by both of them apart from the matter under proceedings of section 138 of the NI Act, would clearly establish a dispute between the parties as such the case before this hon'ble Tribunal is liable to be closed on the said ground alone. 4. The averments of the rejoinder dated December 6, 2019 filed by the petitioner/operational creditor in brief are described hereunder : (i) In reply to paragraph 4 of the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancies in the claim of the present operational creditor. It is only presentation of the application in proper form as required under IBC Code and cannot be termed as "new filing" by any stretch of imagination and that the claim of Rs. 1,77,15,636 as has been mentioned in the present claim is only the claim which has been referred to in the company petition without adding any interest. (ix) It is averred that providing the statement of the case pending cannot be taken to as dispute with respect to the outstanding amount, but according to the judgment of the hon'ble Supreme Court reported in Mobilox Innovations P. Ltd. v. Kirusa Software P. Ltd. [2017] 205 Comp Cas 324 (SC), this Tribunal needs to take into consideration "whether the dispute is a spurious one or in fact a real dispute". (x) It is false and baseless to state that the corporate debtor is running its business and is also paying all other dues to its creditors and that the financial health of the corporate debtor is also in good condition. 5. On February 26, 2021 the operational creditor filed an I. A. No. 79 of 2021 under section 60(5) of the I and B Code, 2016, read with rules 8, 11 and 32 of the National Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the required format and the operational creditor has failed to give their list of documents as mentioned in column 7 of the said notice, i. e., tax invoice, ledger account and memorandum of understanding and the same is never denied by the operational creditor. All these papers run into more than 40 pages and if the said documents would have been sent along with the notice dated March 13, 2019 it would have been weighed around 160 to 250 gms. It is also averred that upon perusal of RPAD receipt filed by the operational creditor along with receipt of documents petition shows the weight of 20 gms and made payment of Rs. 25 for RPAD. As such, the very basis of initiative of this application through form 3 notice which is not as per the prescribed format and condition as laid down under section 8 of the IBC, 2016 is bad in law and as such the present application is liable to be dismissed at threshold only. (iv) It is averred that in the reply notice the corporate debtor denied the execution of memorandum of understanding as the same was under coercion and threat by the operational creditor due to which the corporate debtor was forced to issue blank cheques against which section 138 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017] 205 Comp Cas 57 (SC) ; [2018] 1 SCC 407 (paragraph 30) (2) Mobilox Innovations P. Ltd. v. Kirusa Software P. Ltd. [2017] 205 Comp Cas 324 (SC) ; [2018] 1 SCC 353 (paragraphs 27, 33, 37, 38, 51, 56). 10. The applicant has also filed I. A. No. 79 of 2021 submitting form 3 demand notice issued by the operational creditor. It is also mentioned that wherein a certificate of memorandum was also enclosed to form 3 which says that no dispute was raised in relation to the relevant operational debt filed by the corporate debtor at any point of time and pleaded for admission of the application and to initiate the CIRP proceedings against the corporate debtor. 11. However, the corporate debtor while admitting, the operational creditor has supplied material to the corporate debtor and contended that the material supplied by the operational creditor were totally defective and the same was informed to the operational creditor but operational creditor failed to come forward and rectify the same. He also countered statement that the corporate debtor has agreed to pay 18 per cent. interest to the operational creditor on the invoice amount if the corporate debtor failed to make the payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the memorandum of understanding and also questioned the interest at 18 per cent. per annum which he never agreed for the same. Counsel for corporate debtor finally submitted that as there exists a pre-existing dispute, the application filed by the operational creditor has to be dismissed. 15. We have thoroughly verified the records placed before us and also submissions made by learned counsels for operational creditor as well as the corporate debtor. The memorandum of understanding that has been executed by the corporate debtor and we also found that the cheques which were given as per memorandum of understanding were dishonoured. Taking into consideration of the fact that the cheques which were given as part of the memorandum of understanding were also not honoured by the corporate debtor, the contention of the corporate debtor does not hold any water that the memorandum of understanding was taken under coercion. Further, the cheques were given as a security is also not convincing. It clearly demonstrates that there exists a debt which was substantiated by the memorandum of understanding as well as the cheques issued as per the memorandum of understanding for repayment of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght or beneficial interest therein ; any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002) ; the recovery of any property by an owner or lessor where such property is occupied by or in possession of the corporate debtor. (ii) Notwithstanding anything contained in any other law for the time being in force, a license, permit, registration, quota, concession, clearances or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force, shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concessions, clearances or a similar grant or right during the moratorium period. (iii) That the supply of essential goods or services to the corporate debtor, if continuing, shall not b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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