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TMI Blog2022 (4) TMI 995X X X X Extracts X X X X X X X X Extracts X X X X ..... hese dates mentioned supra are much later than the MOU dates which were 15.02.2012 and 08.09.2017. There exists a dispute between the parties which is much prior to issuance of the From-III Demand Notice by the operational creditor to the corporate debtor which relates to not investing the amounts in the share capital of the Corporate Debtor and not honoring their financial and contractual commitments and the differences in the accounts which are evident from the reconciliation statement filed by the Operational Creditor that invoices are disputed. Further, as per the decision of the Supreme Court in Mobilox Innovations Private Limited vs. Kirusa Software Private Limited [ 2017 (9) TMI 1270 - SUPREME COURT] , this Tribunal need not be satisfied as to whether the said defense is likely to succeed or not and also need not examine the merits of the dispute. The fact that dispute truly exists between the parties in fact is sufficient for this Tribunal to reject the Application, so long as the said defense is not spurious, hypothetical or illusory. Thus, by perusing the documents filed by the parties, it is manifestly clear that the Corporate Debtor raised disputes much prior t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Affidavit as the authorized representative of the Operational Creditor. 4. From Part-IV of the Application, it is seen that a total sum of ₹ 6,63,82,605.84/- (Rupees Six Crore Sixty Three Lakhs Eighty Two thousand Six Hundred and Five and paisa Eighty Four) is being claimed by the Operational Creditor as the 'Operational debt'. The date of default is stated in the Application to be 23.09.2019. 5. Part - V of the Application discloses about the details of the documents which have been filed by the Operational Creditor in order to prove the 'Operational debt', which are as follows; a) Tabulation of outstanding invoices (Annexure-I) b) Invoices outstanding (Annexure-2) c) Purchase Orders (Annexure-3) d) Reconciliation and Confirmation of Balance dated 19.03.2019 (Annexure-4) e) Statements of Accounts/Ledger (Annexure-5) f) Copy of Cheques issued by the Corporate Debtor, Cheque dishonour memos (Annexure-6) g) Demand Notice Form-3 along with the Proof of Service (Annexure-7) APPLICANT'S SUBMISSIONS: 6. The Operational Creditor had supplied castings and pattern from time to time to the Corporate Debtor and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prior to the issuance of the Statutory Demand Notice, Form-III. RESPONDENT'S SUBMISSIONS 12. The Respondent/Corporate Debtor in this matter had filed the Counter statement and Surrejoinder in this present Application on 03.04.2021 and 15.09.2021. 13. The Ld. Counsel for the Respondent submitted that, the alleged Operational debt amounting to ₹ 6,63,82,605.84/- as claimed by the Applicant herein is disputed figure. Operational Creditor had delayed shipment, supplied poor quality products leading to cancellation of contracts, reliance was placed on various correspondences between the Corporate Debtor and Operational Creditor. It was further submitted that operational Creditor in some cases bye passed the Corporate Debtor and tried to make direct supplies. 14. Subsequently, the Ld. Counsel stated that as the goods were of substandard quality, it resulted in huge losses for the Corporate Debtor and the same inferior quality goods was returned to the Operational Creditor through delivery challans to the tune of ₹ 21.58 Lakhs and the Operational Creditor is yet to replace materials. 15. It was submitted that Civil Suit in OS No. 712 of 2019 is pending on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on.9 Application of the Operational Creditor is liable to be dismissed in limine as the averments made by the Operational Creditor is non-est in the eyes of law. 21. Heard the submissions of both the parties and also perused the file including the pleadings and written submissions placed on record. From the submission made by the Learned Counsels for the Operational Creditor and the Corporate Debtor this Tribunal feels the necessity to discuss the following:- DEMAND NOTICE UNDATED: 22. The Ld. Counsel for the Corporate Debtor had submitted categorically in his arguments before this Tribunal that the Form-Ill Statutory Demand Notice is undated and the Operational Creditor had failed to demonstrate when it was sent. In this regard, the main point of contention before this Tribunal is whether this satisfies the statutory mandate under Section 8 of the IBC, 2016 and the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. At this juncture, it becomes relevant to extract the relevant provisions. 8. Insolvency resolution by operational creditor (1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication typeset which proves the delivery of the demand notice. Thought the, the stand of the Corporate Debtor that the Demand notice undated stands admitted, the validity of the defence does not sustain. As per the submissions of the Operational Creditor in the Rejoinder statement filed before this Tribunal, that no reply was ever received for the Form-III Demand Notice within 10 days from the receipt of the demand notice, does not preclude the Corporate Debtor from raising the existence of a dispute. In this regard the Hon'ble NCLAT order in Brand realty Services Limited Vs. Sir John Bakeries India Private Limited [Company Appeal (AT) (Insolvency) No. 958 of 2020] which categorically states that 'Failure to Reply To Demand Notice U/S. 8(1) Within 10 Days Does Not Preclude The Corporate Debtor From Raising The Existence Of A Dispute In A S. 9 Application becomes relevant herein. The said para is extracted hereunder:- 13. Our above conclusion is further fortified then we look into the scheme of Section 9(5)(ii) which provides that the Adjudicating Authority can reject the Application if- notice of dispute has been received by the Operational Creditor or there is a r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Memo on 3.9.2021 which is extracted below:- 27. A perusal of the aforesaid reconciliation of accounts would show that certain disputes were raised in relation to invoices for the period from 15.06.2017 till 18.03.2019. It is seen that the remarks column would show that 'Approval not obtained' and 'invoice received after the cut off period'. These remarks as raised in the Reconciliation of accounts would come with the term 'existence of dispute' as envisaged under Section 8(2) of IBC, 2016. FINANCIAL COMMITMENTS BY THE OPERATIONAL CREDITOR TOWARDS THE CORPORATE DEBTOR 28. Further, at this juncture, it is also apt to refer to the email as exchanged between the parties as early as on 26.09.2017, which is extracted hereunder; Balaji Jagadeesan To: Ramki - IndoShell Precision , Ramki Ramakrishnen Cc: Rajesh email Hi Ramki Please find the mail received from Investor. They are not agreeing to the fact that investment can be send immediately with huge overdue from ISPL India and USA. They have come up with a plan to sort of this issue. Hope this will solve both our problems. First phase investment US$550,000 app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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