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TMI Blog2022 (5) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... ar that there is pre-existing dispute with regard to the Operational Debt claimed by the Respondent No.1 in its Section 9 Application. The Notice under Section 8 was replied and in the reply pre-existence of dispute has been claimed and referred which was neither spurious nor illusory, hence, the Adjudicating Authority was obliged to reject the application. The Adjudicating Authority relying on the post-dated Cheque dated 15.03.2018 observed that the said Cheque prove that the Corporate Debtor has accepted his liability and agreed to pay GST additional over amount of consideration, which observation is erroneous. Even before the date of the post-dated Cheque i.e. 15.03.2018, the Corporate Debtor informed to the Respondent No.1 on 12.03.2018 that there is no liability to pay GST by the Corporate Debtor and instruction of Stop Payment is being issued to the Bank. Thus, the issue of issuing Cheque became redundant and further when Cheque was presented in June, 2018 it was dishonoured as per instructions dated 13.03.2018 - The preexisting dispute was demonstrated in correspondence and complaints filed by the Corporate Debtor against the Respondent No.1. The Adjudicating Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was stated that offer of purchase of Trademark is subject to resolution of trademark issue with NPD. An Assignment Deed dated 19.01.2018 was executed between the Respondent No.1 and the Corporate Debtor for assignment of Trademark NDP Endura Mass to Corporate Debtor for total consideration of Rs.4.40 Crores. The payment of entire consideration was made by two Demand Drafts by the Corporate Debtor after deduction of TDS. A post-dated Cheque of Rs.52,80,000/- dated 15.03.2018 was handed over by the Corporate Debtor in the name of Respondent to Shri K. N. Mahesh Prasad as security. By letter dated 12.03.2018, the Corporate Debtor informed that Cheque issued to Respondent No. 1 was only to help Respondent No.1 and on his request and not because of Corporate Debtor s liability to pay any amount towards GST. Respondent No. 1 was communicated that the Board of Directors of the Corporate Debtor have not approved and declined the request of the Respondent No. 1 for GST payment. Respondent No. 1 was informed that the Corporate Debtor is instructing its Bank to Stop Payment of Cheque No. 000696 dated 15.03.2018. On 21.05.2018, the Corporate Debtor filed complaint against Respondent No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rasad has been mentioned, in the reply details of the dispute regarding the claim of the Applicant (Respondent herein) were also raised by the Corporate Debtor. After receipt of reply of the notice, Application under Section 9 was filed by the Respondent No.1 to which detailed reply was submitted by the Corporate Debtor dated 03.01.2020. In the reply, details of litigation between the parties including the Criminal Complaints filed by the Corporate Debtor prior to Demand Notice have been elaborated. The Adjudicating Authority by the impugned order admitted the Section 9 Application observing that the Corporate Debtor having issued a Cheque for payment of GST amount to the applicant, the Corporate Debtor has failed to prove that GST was not payable by him. 3. Shri Saurabh Kirpal, learned counsel appearing for the Appellant challenging the impugned order submits that the Assignment Deed dated 19.01.2018 was entered between the parties for full consideration of Rs.4.40 Crores. The Corporate Debtor has the Trademark of the Respondent No.1 after payment of Rs.4.40 Crores (less Tax Deduction at Source @10%) as full consideration for the assignment, there is no liability to pay GST on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 018, in response to which Cheque was issued which prove that Cheque was issued to clear the GST liability. 5. We have considered submissions of learned counsel for the parties and perused the record. 6. The Deed of Assignment dated 19.01.2018 following statement has been made in the beginning and in Para 11:- NOW IT IS HEREBY AGREED AS FOLLOWS that for good and valuable consideration of INR 4,40,000/- (Rupees Four Crores And Forty Lakhs only) ( Consideration ) the receipt and sufficiency whereof the Assignor hereby acknowledges: X X X 11. That Consideration is the full and final purchase consideration and by agreeing to the said Consideration, the Assignor agrees to give up forever any right to seek further monetary and/or other relief and will not have any further right (whether directly or indirectly) to claim and/or seek any recourse of claiming any additional consideration over and above he agreed Consideration, for any reason whatsoever. 7. A receipt was also issued by Respondent No.1, where it was clearly mentioned that the amount has been received in full and final consideration of the assignment of the Trademark. The thrust of submission of le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of Cr.P.C. before the Chief Metropolitan Magistrate, Delhi West, Tis Hazari Courts, Delhi has been filed, which was directed to be filed before EOW, Police Station. On 19.10.2018, an email was issued by the Respondent No.1 claiming payment of GST from the Corporate Debtor. The email dated 19.10.2018 is as follows:- BY E-MAIL Dated: 19.10.2018 Shri D. K. Singhal, Director M/s Medinnbelle Herbalcare Pvt. Ltd., 12/35, 1st Floor, Main Rohtak Road, West Punjabi Bagh, New-Delhi Sub: Regarding want of release of IGST of Rs.52,80,000/- Sir, This is with reference to purchases as made by you from me of Trademark 1858441 of NPD Endura Mass wherein sale invoice no. NPDTM001 dt. 6.2.2018 of Rs. 4,40,00,000/-+ IGST @ 12% of Rs.52,80,000/-, total Rs.4,92,80,000/- was raised by me on your company and copy of which is also attached herewith. That out of above invoice a sum of Rs.3,96,00,000/- (Rs.3,55,00,000/- + Rs.41,00,000/-) have only been released by you. Still IGST of Rs.52,80,000/- have not been released to me. Further TDS amount of Rs.44,00,000/- as deducted from above sales have invoices is still not showing in Form 26AS. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Debtor by Reply dated 26.09.2019. In the reply to the Section 8 Notice, the Corporate Debtor has given details of proceedings initiated by the Corporate Debtor against the Respondent No.1. The entire correspondence which took place between the parties before filing of the Demand Notice was mentioned including that the Stop Payment issued by the Corporate Debtor. It was specifically stated the Cheque of Rs.52,80,000/- was handed over to Shri K. N. Mahesh Prasad as a security and after payment of Rs.4.40 Crores, no further payment was required to be made by the Corporate Debtor to the Respondent No.1. Further, after filing of Section 9 Application, detailed reply was filed by the Corporate Debtor and in the Reply details of preexistence of dispute has been narrated in Para 11, which is to the following effect:- 11. Admitted pre-existence of the dispute: That the OC has filed his email dated 19.10.2018 along with the Application by which OC had first time demanded alleged amount of GST as annexure-F at page 47 of Application. It is pertinent to mention that in the letter dated 19.10.2018, the OC has not mentioned about the cheque no. 000396 dated 15.03.2018 for Rs.52,80,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest of justice. The copy of the letter dated 19.10.2018 of the Applicant/OC is annexed as Annexure R-4 . The copy of reply/ letter dated 24.10.2018 of the Respondent/ CD is annexed as Annexure R-5 . 13. The Notice under Section 8 was issued by the Corporate Debtor on 11.09.2019 prior to which there has been following written communication sent by the Corporate Debtor to the Applicant (Respondent No.1), which evidences pre-existing dispute:- (i) Letter dated 12.03.2018 informing the Respondent No. 1 that Corporate Debtor is not liable to pay any further amount apart from Rs.4.40 Crores and with regard to post-dated Cheque of Rs.52,80,000/- the Corporate Debtor issued instruction to the Bank to Stop Payment. (ii) Further, demand of GST payment of Rs.52,80,000/- by email dated 19.10.2018 was specifically denied by the Corporate Debtor vide reply letter dated 24.10.2018 (which has already been extracted above). The Criminal Complaint filed by the Corporate Debtor on 21.05.2018 against Respondent No.1 and other accused also give credence to the preexisting dispute between the parties. 14. Learned counsel for the Respondent No. 1 Shri Harsh N. Gokhale has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Appellant refuted any liability to make payment of GST. Learned counsel for the Respondent has also placed reliance on the judgment of this Tribunal in Company Appeal (AT) (Ins) No. 366/2020 Rajendrakumar Kundanmal Jain vs. Vijal A. Jain Anr. , which was a case where Cheque was dishonoured due to stop payment, where it was observed that issuance of Cheque on 12.01.2016 amount to acknowledgment of debt although the Cheque was dishonoured for reason of stop payment. The above observations were made in the facts of the said case. The issue before this Tribunal was not regarding a preexisting dispute nor before date of presentation of the Cheque any intimation was given refuting the entitlement to pay liability. The said judgment, thus, does not help Respondent in the facts of the present case. 19. Learned counsel for the Respondent also relying on the judgment of Hon ble Supreme Court in Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software Pvt. Ltd. sought to contend that the defense taken by the Appellant is only moonshine and is not a bonafide dispute. When we look into the facts in the present case and sequence of events, we are satisfied that the dispute raised by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated Cheque dated 15.03.2018 observed that the said Cheque prove that the Corporate Debtor has accepted his liability and agreed to pay GST additional over amount of consideration, which observation is erroneous. Even before the date of the post-dated Cheque i.e. 15.03.2018, the Corporate Debtor informed to the Respondent No.1 on 12.03.2018 that there is no liability to pay GST by the Corporate Debtor and instruction of Stop Payment is being issued to the Bank. Thus, the issue of issuing Cheque became redundant and further when Cheque was presented in June, 2018 it was dishonoured as per instructions dated 13.03.2018. Thus, giving Cheque in the name of Respondent No.1 by the Corporate Debtor has no bearing and dispute was in existence even before the date of presentation of Cheque. The preexisting dispute was demonstrated in correspondence as above and complaints filed by the Corporate Debtor against the Respondent No.1. 22. We, thus, are of the view that the Adjudicating Authority has committed error in admitting the application under Section 9 there being pre-existing dispute between the parties which dispute was in existence even prior to the date of issue of Notice under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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