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TMI Blog2022 (5) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst 'M/s. Satec Envir Engineering (India) Pvt. Ltd.'/the 'Corporate Debtor', observing as follows: 13. The Bench notes that in a letter dated 20.12.2018 addressed to IOCL, the Petitioner who are the contractors themselves had mentioned to IOCL, that the racking material due to exposure to rains and dust during installation and because of negligence and improper storage had corroded. Therefore, the Petitioner had strongly recommended that IOC should not use the racking system as the same is not certified for safe use. 14. It is clear to the Bench that and as admitted by Petitioner that there are serious problems with the racking system installed by them and also admits that the system has not yet undergone a safety audit and, therefore, was a non-certified weak racking. The Petitioner itself requested IOCL "not to use the system any further as the same has not been certified for safe use". The Petitioner ends the letter by saying that "Hope u find this in order and would ensure that the safety alert being raised is taken seriously and necessary correctives are undertaken without any further delay." The Bench notes that instead of rectifying the defective work, the Petitioner a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dates of default, cannot be clubbed together for alleged default of debt, the cause of action is being separate. For the said reasons, we hold that the joint application preferred by appellant under Section 9 is defective, as distinct from incomplete, and, was not maintainable." 2. Submissions of the Learned Sr. Counsel appearing on behalf of the Appellant: * It is submitted that the 'Corporate Debtor', engaged primarily in executing Orders from the Government and the other customers for Warehouse Development and three fabrications work Project approached the Appellant for supply and installation of a Multitier Racks for Heavy Duty Shelving for two separate work sites for the end user i.e., Indian Oil Corporation Ltd. (IOCL) at Haldia, West Bengal and Bongaigaon, Assam respectively. * A Purchase Order dated 18/05/2017, for the supply of Multitier Heavy Duty Shelving amounting to Rs.1,43,94,240/- was issued for the Haldia Project along with a corresponding Work Order dated 18/05/2017, for the installation of the Multitier Heavy Duty Shelving amounting to Rs.8,05,000/-. The payment terms for Purchase Order inter alia comprised of 30% advance along with 'Advance Bank Guarantee', ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... email to 'Engineering (India) Ltd.' (EIL) who were the Project Management Consultants of IOCL to register the Appellant's complaint against the 'Corporate Debtor' as an amount of Rs.1.44Crs./- was still unpaid for the Haldia site and Rs.89 Lakhs/- for Bongaigaon site. * Thereafter there was communication on 03/05/2018, 16/08/2018, 09/02/2018, 20/02/2018 and on 23/01/2018 between the Appellant and the IOCL. On 27/10/2018, there was a Meeting held between IOCL and the Appellant and EIL and payment terms for the completion was discussed. EIL addressed a letter dated 30/11/2018 informing the Appellant inter alia, that some shortcomings were noticed in the Inspection Report and requested the Appellant to deploy an experienced engineer for rectification of the same. On December 20, 2018, the Appellant addressed a letter to IOCL regarding the safety of the Godrej Racking System installed at the IOCL factory. It was pointed out that the racking material which was delivered, was lying outside in the open without adequate protection and exposed to direct rain and dust. The Appellant also stated that the same should be used after a safety check to avoid any mishaps. On December 27, 2018, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the sites and there were no 'Pre-Existing Disputes' between the parties. 3. Submissions of the Learned Counsel appearing for the Respondent/'Corporate Debtor': * Learned Counsel for the 'Corporate Debtor' submitted that after 2018, the 'Operational Creditor' had never contacted the 'Corporate Debtor' and was directly in touch with IOCL, the end user and a Comfort Letter dated 23/01/2018 was issued by IOCL to the 'Operational Creditor' which signifies that a fresh contract was executed between them. * Learned Counsel drew our attention to the letter dated 28/01/2018 in support of her contention that the entire communication was between IOCL and the Appellant with offers and counter offers having been exchanged. * It was further submitted that after rounds of negotiations, the Appellant had finally accepted the amounts offered by IOCL and that there was absolutely no privity of contract between the 'Corporate Debtor' and the Appellant subsequent to 2018 and that disputes were raised by IOCL which required rectification by the Appellant only. 4. The main point for consideration is whether there were any 'Pre-Existing Disputes' between the 'Corporate Debtor' and the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not present and it was held between IOCL and EIL and the Appellant herein. The Minutes too do not record the presence of the 'Corporate Debtor'. From the aforenoted communication, this Tribunal is of the considered view that the payments were to be made, as per the Comfort Letter, by IOCL to the Appellant herein. 13. Now we address ourselves to the main issue as to whether there is any 'Pre-Existing Dispute' existing between the parties prior to the issuance of the Notice mandated under Section 8 of the Code, based on the touchstone of the ratio of the Hon'ble Supreme Court in 'Mobilox Innovations Pvt. Ltd.' Vs. 'Kirusa Software Pvt. Ltd.' (2018) 1 SCC 353, where in the Hon'ble Apex Court has observed as follows:- "40. It is clear, therefore, that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application under Section 9(5)(2)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the "existence" of a dispute or the fact that a suit or arbitra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of the shortcomings observed in the quality of the racking materials supplied to IOCL. The letter dated 30/11/2018 addressed to the Appellant specifies that there are discrepancies and the test certificates of all plates/materials is absent. As the letter dated 30/11/2018 is the main document emphasizing the dispute raised, which is neither frivolous nor spurious, it is being reproduced hereunder: (Emphasis Supplied) 19. The Hon'ble Supreme Court in para 45 of 'Mobilox Innovations Pvt. Ltd.' (Supra) has observed as follows:- "45. Going by the aforesaid test of "existence of a dispute", it is clear that without going into the merits of the dispute, the appellant has raised a plausible contention requiring further investigation which is not a patently feeble legal argument or an assertion of facts unsupported by evidence. The defense is not spurious, mere bluster, plainly frivolous or vexatious. A dispute does truly exist in fact between the parties, which may or may not ultimately succeed, and the Appellate Tribunal was wholly incorrect in characterizing the defense as vague, got-up and motivated to evade liability." 20. For all the aforenoted reasons and the ratio of the H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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