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TMI Blog2020 (6) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... the receipt of such notice or invoice in relation to such dispute. The Corporate Debtor is also required to produce the documents to show that the amount if any has been paid. And after the expiry of the period of 10 days, if the Operational Creditor does not receive the payment from the Corporate Debtor or notice of dispute under sub-section 2 of Section 8 of IBC then the Operational Creditor has right to file an application before the Adjudicating Authority for initiating Corporate Insolvency Resolution Process. The Corporate Debtor shows that they made the payment or sent notice of dispute in that case the application under Section 9 of IBC is not maintainable. In other words, if notice of dispute has been received by the operational creditor or there is record of dispute in the information utility then the Adjudicating Authority may reject the application - in the present case, it is found that the Corporate Debtor has raised a dispute regarding the quality of goods prior to the receiving of Demand Notice. Mere plain reading of Section 5(6) of the IBC shows that the dispute includes a suit or arbitration proceedings relating to the existence of the amount of debt, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Pvt. Ltd. Others . 2. The business of the Operational Creditor of trading of goods such as Resin, Plastic and Granules, etc. Operational Creditor was a registered dealer in the UPVAT Act CST Act vide TIN No. 09365717288 and also registered under Excise Act. The Applicant is the Proprietor of M/s Standard Impex. 3. Officials of the Respondent company had various meeting with Petitioner and its authorized representative/officer pursuant to buying the goods from Petitioner and after consultation with each other regarding price of goods, quality of goods and quantity of goods had purchased the goods from its place of business at G-241, Basement, Sec.-63, Noida, G.B. Nagar Uttar Pradesh from time to time. 4. Pursuant to orders placed by Respondent/ Corporate Debtor, Petitioner has sold the material ex-godown delivery directly from their Business Premises to them against respective invoices. The transaction of sales and part payments received pertains to the Financial Year 2015-16, 2016-17 2017-18. 5. As per the Operational Creditor s Books of account duly maintained in normal course of business, the amount recoverable from opposite party is duly confirmed by the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon putting the goods into use. v. The Applicant did not respond to the quality complaint made by the Respondent and thereafter, respondent issued another letter dated 16.10.2015 requesting the Applicant to understand the seriousness of the matter and cooperate in handling the concerns raised. vi. The Respondent continued to release payments to the Applicant for the goods that were of satisfactory quality and has not with-held payments despite facing complaints, losses as well as losing its customers due to extremely poor quality of goods. vii. The Respondent has written off the frivolous amounts claimed by the Petitioner. viii. In the absence of existence of debt and default and a clear existence of dispute relating to the existence of the amount of debt , the instant Application deserves to be dismissed. 12. We have heard the Ld. Counsels for the Operational Creditor as well as Corporate Debtor and perused the averments made in the application, reply and documents enclosed with the same. 13. Ld. Counsel for the applicant in course of his argument submitted that the Operational Creditor has enclosed the invoices running from page no. 26 to 86 of the Paper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addressed to M/s Standard Impex, the applicant s firm, who supplied the goods to the Corporate Debtor. 18. At this juncture, we would like to refer the contents of the letters enclosed at page 19 21 of the reply and the same are quoted below:- letter dt. 9/10/2015 Dear Sir, This refers to our several verbal complaints made to you against the quality of PVC Resins supplied to us during September and October. Please be informed that it seems here is mixing of Calcium Carbonate and granules/foreign particles in the supplies made by you. It seems that this material is of some odd lat/sweeping repacked in bags. We had supplied the material to our customers on good faith they used the material for their production. Now suddenly we are receiving complaints that their batch is totally damaged and they are claiming huge compensation from us. We suggest that we make a joint inspection at the customer site to make an assessment of the damage. And Letter dt.16/10/2015 Dear Sir It is quite unfortunate that you are taking an evasive approach and net responding to our quality complaints in your supplies. While this is causing strain in our relati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bring to the notice of the operational creditor- (a) existence of a dispute, 1[if any, or] record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute; (b) the 2[payment]of unpaid operational debt- (i) by sending an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the corporate debtor; or (ii) by sending an attested copy of record that the operational creditor has encashed a cheque issued by the corporate debtor. Explanation.-For the purposes of this section, a demand notice means a notice served by an operational creditor to the corporate debtor demanding 3[payment] of the operational debt in respect of which the default has occurred. Section 9: Application for initiation of corporate insolvency resolution process by operational creditor: *9, (1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub-sentlan (2) of section 8, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoice or notice for payment to the corporate debtor; (d) notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility; or (e) any disciplinary proceeding is pending against any proposed resolution professional: Provided that Adjudicating Authority, shall before rejecting an application under sub-clause (a) of clause (ii) give a notice to the applicant to rectify the defect in his application within seven days of the date of receipt of such notice from the adjudicating Authority. (6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of this section. 22. Ifweshall read the Sections 8 9 of the IBC together then we find that before filing an application under Section 9 of IBC, an Operational Creditor is required to deliver a Demand Notice under Section 8 (1) of the IBC and the Corporate Debtor is required to file a reply to the same within 10 days of receiving the Demand Notice or copy of the invoices mentioned in sub-section (1) and bring to the notice of the operational creditor (a) existence of a dispute, if any, or record of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated in the aforementioned para that although the Corporate Debtor has enclosed the documents in its reply to show that they have raised a dispute prior to issuance of Demand Notice and despite several opportunities given to the Operational Creditor to file the rejoinder but no rejoinder has been filed by the Operational Creditor, therefore, there is no other document filed on behalf of the Operational Creditor to show that the dispute raised by the CD in the year 2015 was resolved. Hence we are of the considered view that the contention of the Corporate Debtor that they raised the dispute regarding the quality of goods is correct and liable to be accepted. As we have already stated that the last date of invoice is 05.10.2015 and soon thereafter, the dispute relating to quality was raised by the Corporate Debtor. 25. Under such circurnstances, we have no option but to hold that the Corporate Debtor had raised a dispute regarding the quality of goods and Operational Creditor had failed to convince us that the same dispute was resolved, therefore, we are of the view that the Operational Creditor has falsely sworn an affidavit under Section 9 (3) (b) that no notice was given by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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