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TMI Blog2022 (2) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... ne the merits of the dispute . If the dispute is not an imaginary one or a hypothetical one and if the dispute really exists, the application is liable to be rejected, as opined by this Tribunal. If there is plausible contention raised on behalf of the concerned party, which requires a further investigation, then the application cannot be admitted. The dispute in whatever form, ought to have been raised before the Demand Notice under section 8 of the Code was served on the Corporate Debtor . The I B Code, 2016 is not a Debt Enforcement Procedure . The application of an operational creditor is not maintainable, if the Corporate Debtor has a dispute about its outstanding/debt. The dispute is to be seen by the Adjudicating Authority as one based on tenable substantial grounds. In this connection, it is relevantly pointed out that if there is a dispute about the debt, then, it is for the applicant to approach the competent Civil Court to decide the triable issues. In short, the Adjudicating Authority/Appellate Tribunal is not to be utilised as a Debt Collecting Agent . The Appellant/Operational Creditor/Applicant is not in a position to establish that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Creditor. Taking into consideration this aspect, this Tribunal as early as on 05.12.2018 has directed the parties to reconcile their Statement of account and to report the difference if any on the next date of hearing. Subsequently, the time was again granted to reconcile the account for the parties on 05.02.2019, 11.03.2019, 29.03.2019, 26.04.2019, 28.08.2019, 15.11.2019, 19.11.2019, 29.01.2020, 11.02.2020 and 09.03.2020. Since the parties have failed to comply with the directions, the Orders were finally reserved on 09.03.2020. 11. As to the facts of the case, from the records it is evident that a series of notices and reminders have been exchanged between the parties from the year 2018 and even the Corporate Debtor by their letter dated 09.03.2017 has disputed the claim of the Operational Creditor. Further, it may be seen that the Corporate Debtor at no point of time has admitted the liability of the Operational Creditor. In so far as the e-mail dated 29.10.2015 which is referred by the Operational Creditor as an admission of liability by the Corporate Debtor, a perusal of the same shows that nowhere the Corporate Debtor has stated that the sum is due and payable by them t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged statements of accounts and corresponding credit/debit notes of different dates/occasions. 4. The Learned Counsel for the Appellant contends that the Adjudicating Authority had committed an error in entertaining and placing reliance upon the forged and fabricated documents of the Respondent at a belated stage of which not even a whisper was made in the reply of the Respondent to the Statutory Notice in Form IV sent by the Appellant. 5. It is the stand of the Appellant that the impugned order was passed by the Adjudicating Authority , resting on presumption and assumption and there was no proper appreciation of Documents on Record and therefore, the impugned order is liable to be set aside. 6. The Learned Counsel for the Appellant advances an argument that the Adjudicating Authority had disregarded and brushed aside the facts and circumstances of the case that the sum and details of Invoices reflecting in Statutory C-Forms issued for the concerned period and the amount and details appearing in corresponding invoices were matching. As such, there is no question of raising the impugned debit/credit notes must have taken place, because there was no impact on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst the Respondent/Corporate Debtor. As a matter of fact, in the Form 5, under Part IV, Particulars of Operational Debt , it is mentioned as under:- 1 TOTAL AMOUNT OF DEBT, DETAILS OF TRANSACTIONS ON ACCOUNT OF WHICH DEBT FELL DUE, AND THE DATE FROM WHICH THE DEBT FELL DUE. A) The total outstanding Debt due and payable by the Corporate Debtor to the Operational Creditor stands at ₹ 53,52,607.73 (Rupees Fifty three lakhs fifty two thousand six hundred and seven Rupees and Seventy three Paisa) as on date (hereinafter referred to as Operational Debt ). The above total Outstanding Dues is excluding the contractual rate of interest mutually agreed at 30% p.a. B) The Operational Creditor is engaged in the manufacturing of Kraft Paper and Duplex Board ( Business of the Operational Creditor ) and are well known in the market for their high quality products. The Operational /Creditor has supplied /Duplex Boards to the Corporate Debtor based on purchase order placed in the Corporate Debtor upon the Operational Creditor. The Operational Creditor has against very such purchase order performed the supply of Duplex Boards against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed to make the lawful and legitimate payments due under the said Invoices raised by the Operational Creditor. 14. The Appellant had issued a Statutory Winding Up Notice dated 03.08.2016 (under Section 433(e) and 433(f) r/w Section 434(1)(A) of the Companies Act, 1956) to the Corporate Debtor , its Managing Director and the other Directors of the Corporate Debtor , wherein a demand for payment of ₹ 53,52,607.73 along with interest @ 30% per annum (outstanding amount due to the Appellant) was made. Also the Respondent and others were informed that the Appellant is separately entitled to recover all or any of the losses suffered due to the non-payment. 15. It transpires that the Appellant on 31.08.2015 under the subject payment due against goods sold had addressed a communication to the Managing Director of the Corporate Debtor/ICMC Corporation (with a copy being marked to Mr. Nand Lal of the Respondent) wherein it was mentioned that inspite of several requests made to the Manging Director of the Respondent and Mr. Nand Lal, they had not completed the payment for goods invoice as on date and further that the Appellant received the last payment 30. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notice of Dispute given by the Corporate Debtor satisfies the conditions prescribed in Section 8(2) of the Code. The Adjudicating Authority is to scrutinise the attendant circumstances to the issue of Demand Notice with a view to decide whether a bona fide dispute exists between the parties. The dispute must be one which necessitates more investigation and at this juncture, the Adjudicating Authority will not examine the merits of the dispute . If the dispute is not an imaginary one or a hypothetical one and if the dispute really exists, the application is liable to be rejected, as opined by this Tribunal. 21. If there is plausible contention raised on behalf of the concerned party, which requires a further investigation, then the application cannot be admitted. The dispute in whatever form, ought to have been raised before the Demand Notice under section 8 of the Code was served on the Corporate Debtor . 22. The I B Code, 2016 is not a Debt Enforcement Procedure . The application of an operational creditor is not maintainable, if the Corporate Debtor has a dispute about its outstanding/debt. The dispute is to be seen by the Adjudicating Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersarial . Of course, the dispute must be an existing and genuine one. 27. In the present case on hand, the Respondent/Corporate Debtor in its Counter to CP 328/IB/2018 at paragraph 7 had clearly averred that due to supply of sub-standard/inferior quality of materials by the Appellant/Applicant, the Respondent has suffered loss and was taking steps to recover damages from the Appellant. Therefore, it is quite evident that the Respondent/Corporate Debtor had raised a dispute in regard to the quality of goods and it can be safely and securely said that a dispute is pending about the Debt . 28. In regard to the rate of interest at 30% per annum claimed by the Appellant/Operational Creditor in respect of the due amount, the Respondent comes out with a plea that never at any point of time, it had agreed for the said rate of interest by duly signing the contract in this regard. Significantly, the Respondent/Corporate Debtor had not admitted its liability and even in the Reply Notice dated 09.03.2017 of the Respondent/Corporate Debtor addressed to the Appellant it was categorically mentioned that the Appellant owes money to the Respondent in respect of the business transactio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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