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TMI Blog2022 (2) TMI 799X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the Adjudicating Authority . One cannot remain oblivion to the prime fact that in the case on hand, the Appellant/Operational Creditor and Respondent/Corporate Debtor were supplying materials mutually and under such circumstances the Appellant/Applicant singly to be considered as an Operational Creditor qua the Corporate Debtor - it cannot be brushed aside that the Appellant had received the services/goods from the Respondent/Corporate Debtor and in that context, the claim arose between the parties. A Debt may not be due if it is not payable in law or in fact. The application must be complete with a view to enable an Adjudicating Authority to admit the same. While scrutinising an application under Section 9 of the Code, an Adjudicating Authority is to determine (a) whether there is an operational debt as per Section 4 of the Code (b) whether the material/documentary evidence submitted with the application indicates that the aforesaid debt is due and payable and the same was not paid. (c) whether there is existence to a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed prior to the receipt of the Demand No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o enclose the copy of those invoices per se and in the absence of those invoices which sets out the date, the seal of the Operational Creditor and other details, Application which are filed by the Operational Creditor are required to be treated as incomplete. It is also required to be noted that the Applicant even though in his Application has averred in Part IV of the Application that as per the Books of Accounts that a sum of ₹ 14,41,728/- is balance outstanding, however has miserably failed to place on record the copy of the said Ledger Account in the typed set filed alongwith the Application. All these documents are least required for the Adjudicating Authority to properly adjudicate the Application on hand and the present application filed by the Operational Creditor is bereft of all these details and hence on the said count itself, the present application is required to be dismissed. 15. Further, the nature of transaction which transpired between the parties would show that at first the Operational Creditors will supply the materials to the Corporate Debtor and the Corporate Debtor would convert the said materials into finished products and in turn supply the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12) default means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not (Paid) by the debtor or the corporate debtor, as the case may be; Section 5(20) operational creditor means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred; Section 5(21) operational debt means a claim in respect of the provision of goods or services including employment or a debt in respect of the payment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority; 18. It is required to be noted that for a debt to qualify as an Operational Debt , it has to undergo the following percolation process; a) The amount in default should fall within the definition of claim as defined under Section 3(6) of IBC, 2016. b) Such a Claim should be capable of being treated as a debt as defined under Section 3(110 of IBC, 2016. c) And such debt should fall within the confines of Operational Debt as defined under Section 5(21) of IBC, 2016. d) And the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d time to the Corporate Debtor for the purchased made by the Corporate Debtor from the Operational Creditor . 6. The Learned Counsel for the Appellant points out that as the quality of materials supplied by the Respondent/Corporate Debtor was of inferior quality, as also there was a huge delay in delivery had caused huge business and goodwill loss to the Appellant s customers and hence the Appellant discontinues purchases from the Respondent from 2017. 7. It is the version of the Appellant that there was an unpaid amount of ₹ 14,41,728/-, standing as outstanding from the Respondent towards the paid supplies made by the Appellant for the period between 01.05.2017 to 10.12.2017. 8. The Learned Counsel for the Appellant takes a stand that during the period between 01.05.2017 to 10.12.2017, the Appellant supplied materials to the Respondent/Corporate Debtor amounting to ₹ 2,69,95,970 but received only ₹ 2,55,54,242/- and the balance of ₹ 14,41,728/- remains unpaid by the Responded till date despite several requests. In this period the Appellant had raised about 1100 Invoices. 9. The Learned Counsel for the Appellant points out that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d amount, standing as outstanding from Corporate Debtor towards Operational Creditor s supplies to the Corporate Debtor for the period from 01.05.2017 to 10.12.2017. 17. The Appellant/Operation Creditor had proceed to mention in its Application that the Debt fell due on 11.12.2017 and that the Demand Notice in form -3 dated 23.05,2019 sent to the registered Office of the Corporate Debtor and Director was returned unserved and the Demand Notice to the Managing Director Mr. Janartnan Mohanakrishnan was served on 25.03.2019. In fact, the Corporate Debtor in its reply dated 08.06.2019 (after the mandatory period of 10 days received on 12.06.2019) had not disputed or refuted the subject Debt . The said payment of ₹ 14,42,728/- was due from 11.12.2019, as no payments were made thereafter. 18. The Respondent/Corporate Debtor through its Managing Director before the Adjudicating Authority had filed a counter to IBA No. 134 of 2020, interalia, stating that till date no payment was made to the Operational Creditor by the Corporate Debtor . Further, the understanding between the Appellant/ Operational Creditor and the Respondent/Corporate Debtor is that the th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ENT UNDER WHICH DEBT HAS BECOME DUE 1.Section 3(1) of IBC, 2016(Debt) 2.Sec.4(21) of IBC, 2016 (Operational Debt in respect of provision of goods). 3.Various Invoices (appx. 1110 Nos) from 01st May, 2017 to 10th December, 2017. 4.Account Statement in the books of M/s Mando Automotive India Pvt Ltd. 7 LIST OF DOCUMENTS ATTACHED TO THE APPLICATION IN ORDER TO PROVE THE EXISTENCE OF OPERATIONAL DEBT AND THE AMOUNT IN DEFAULT. 1.Account Statement in the books of M/s Mando Automotive India Pvt Ltd from 01.05.2017 to 31.12.2017 2.Legal Notice dated 3.10.2018 3.Email dated 21.10.2018 for proof of deliver of Legal Notice dated 3.10.2018 vide email. 23. For the Notice dated 23.05.2019 of the Appellant, the Respondent/Corporate Debtor had issued a Reply (through its Managing Director on 08.06.2019) inter alia mentioning that .our company has invested huge sums in the land and building and due to gradual slowdown of your take off and business volume we had incurred huge losses to meet out Fixed Expenses planned based on your business volume which was against your assurance. Our company incurred l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt/Applicant singly to be considered as an Operational Creditor qua the Corporate Debtor . 30. In fact, it cannot be brushed aside that the Appellant had received the services/goods from the Respondent/Corporate Debtor and in that context, the claim arose between the parties. 31. A Debt may not be due if it is not payable in law or in fact. The application must be complete with a view to enable an Adjudicating Authority to admit the same. 32. To put it succinctly, while scrutinising an application under Section 9 of the Code, an Adjudicating Authority is to determine (a) whether there is an operational debt as per Section 4 of the Code (b) whether the material/documentary evidence submitted with the application indicates that the aforesaid debt is due and payable and the same was not paid. (c) whether there is existence to a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed prior to the receipt of the Demand Notice of the unpaid operational debt pertaining to a dispute as per Hon ble Supreme Court decision in Mobilox Innovations Pvt Ltd V. Kirusa Software Pvt Ltd reported in AIR 2017 SC 4532. 33. If anyone o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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