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TMI Blog2022 (7) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2019, 4th September, 2019 30th September, 2019 and 6th February, 2020, the Appellant in categorical term had denied regarding demand raised by Respondent No.1. Besides other documents letter dated 11th March, 2020 addressed to the Corporate Debtor issued on behalf of the Operational Creditor makes it clear that for reconciliation of account date was fixed to 14th March, 2020. However, record shows that thereafter no reconciliation of accounts had taken place in between the parties. It goes without saying that in accounting, reconciliation is the process of ensuring that two sets of records are in agreement. Accordingly it can be inferred that in absence of reconciliation of accounts there was pre-existing dispute between the parties. it is evident that date for reconciliation of account was fixed by the Operational Creditor to 14th March, 2020. It goes without saying that since there was no settlement of account in between the parties and there were some disputes, the Respondent No.1 had agreed for fixing a date for reconciliation of the account. This fact is itself enough to infer that demand raised by the Operational Creditor/Respondent No.1 was not undisputed rather the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order was passed. 3. One of the Member of the suspended Board of Directors and a shareholder of Sai Estate Consultants Chembur Pvt Ltd, Corporate Debtor, has filed the present Appeal. Initially in the Appeal the IRP was not arrayed as Respondent. On 18.08.2021, a Coordinate Bench of this Tribunal directed for impleading IRP as Respondent, besides issuing necessary directions. The order dated 18.08.2021 is quoted hereinbelow: Heard Learned Sr. Counsel for the Appellant 2. Learned Sr. Counsel vehemently argued and submitted that there is a preexisting dispute. The Learned Sr. Counsel referred to Letter at Page 178 of the Appeal Paper Book which was sent in the context of Letter dated 11th March, 2020 to point out that there is a pre-existing dispute. Ld. Sr. Counsel is trying to show that both the parties did agree that reconciliation was required. Ld. Sr. Counsel submitted that the CIRP needs to be stayed and Interim Relief to that effect may be ordered. 3. We have gone through the Record and Impugned Order. The Impugned Order in Paragraphs 48 to 52 has discussed the respective cases of the parties. 4. Whether or not, a Letter communicating requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad IRP as 2nd Respondent no Stay order was passed by the Coordinate Bench of this Tribunal. The Appellant preferred an Appeal before the Hon ble Supreme Court which was number as Civil Appeal No.4967/2021. The Hon ble Supreme Court vide its order dated 31st August, 2021 disposed off the Civil Appeal primarily observing for passing suitable orders on Stay Application of the Appellant. It is better to reproduce the order dated 31st August, 2021 passed in Civil Appeal No.4967/2021 as follows:- Heard learned counsel for the appellant and perused the record. Considering the fact that the matter relates to non-grant of interim order by the Tribunal for which 07.10.2021 has been fixed and also keeping in view that in the meantime if certain actions are taken, the appellant would suffer irreparably, we direct that the matter be taken up by the NCLAT on 07.09.2021 instead of 07.10.2021 for passing suitable orders on stay application of the appellant. We further direct that any action taken in the meanwhile, will be subject to further orders passed by the NCLAT while considering the application for interim order. The appellant is at liberty to inform the other side about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent carries on the business of display of advertisements on hoardings within the area of Mumbai, Thane and rest of Maharashtra for several years. 7.2 Since the inception of the Respondent s commercial relationship with the Corporate Debtor, on account of a close friendship between the Respondent s representative Mr. Vicky Gupta and the Corporate Debtor s representative Mr. Amit Wadhwani i.e. the Appellant and the Corporate Debtor s Managing Director, it had always been the understanding that in respect of the services being provided by the Respondent, the Corporate Debtor would only pay on a payable when able basis. 7.3 Apart from the friendly relations between the Respondent and the Corporate Debtor, the reason for such an understanding was also the nature of the services being provided by the Respondent. Given the peculiar nature of the services that were to be provided by the Respondent to the Corporate Debtor, for a meaningful scrutiny of invoices and release of payment, the Corporate Debtor would have to reconcile its accounts and also verify the supporting materials evidencing the actual provision of services, which would demonstrate the proof of services being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the receipt of some of the tabulated statements at different / random points in time, the Corporate Debtor vide correspondence issued by it in February and March 2020 (i.e. much prior to the issuance of Section 8 Notice in June 2020) sought reconciliation of accounts and verification of material evidencing the actual provision of services, the specifications thereof, locations, etc. and listed out the specific information and documents that were needed for the same. The Respondent, however, avoided the same by not providing the specific information / documents sought and rushed to issue the Section 8 Notice on 12th June 2020 and then filed the present Petition to try to coerce the Corporate Debtor to pay amounts which are disputed and not payable, which speaks volumes in itself. 7.7 Further, this was also in line with the understanding between the Corporate Debtor and the Respondent. The payments were to be made on a payable when able basis, and hence the Corporate Debtor was not liable to pay the Respondent any monies unless it was able to undertake and complete a reconciliation of accounts and verification exercise. This is borne out from the conduct of parties and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecifying the details / documents required much prior to the issuance of the Section 8 notice. 7.11 The Respondent had however sought to avoid the reconciliation / verification exercise and instead sought to invoke the provisions of the Code in a mala fide attempt to coerce the Corporate Debtor to make payments to the Respondent, which are not due to it and avoid the verification exercise. 7.12 It was an undisputed in the Application that the Respondent despite being in custody of 10 postdated cheques, returned to the Corporate Debtor 8 cheques (aggregating to Rs. 40 lakhs). It was the Corporate Debtor s case that it is inconceivable commercial conduct that when the Respondent claims to be entitled to an alleged debt of Rs.1,98,47,520/-, and after two out of the 10 postdated cheques were dishonored, the Respondent would return 8 cheques aggregating to Rs.40 lakhs. In this regard, the Corporate Debtor had in its Reply to the Application, pointed out that the Respondent had made a false statement in the Application by alleging that 8 postdated cheques were returned back to the Corporate Debtor on an alleged assurance that the Corporate Debtor would discharge its alleged liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments were pending even in respect of the on account of payment of Rs.1.25 Crores. It was in this letter, reiterated that the Corporate Debtor through its representatives Mr. Amit Wadhwani and the Respondent s representative Mr. Vicky Gupta always had an understanding that money would only be payable by the Corporate Debtor when it was able to do so. Integral to this understanding was the requirement of reconciliation of records and accounts. The Corporate Debtor vide its reply dated 20th February 2020 correctly asserted that the understanding that was always followed was that the liability to make payment was on a payable when able basis . 7.15 It is significant to note that in response to the Corporate Debtor s letter dated 20th February 2020, the Respondent in its letter dated 11th March 2020, did not deny the assertion made by the Corporate Debtor that the understanding between the Parties was always that payment would be made on payable when able basis. Moreover, if there was no need for reconciliation of accounts and records and the understanding of payable when able was not the understanding between the parties, then no occasion would have arisen for the Respond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 2021. A perusal of the Affidavit in Reply demonstrates that the following was the broad stand taken: (i) since the understanding between the parties was that the Corporate Debtor would make payments on a payable when able basis which meant that liability accrued upon completion of a reconciliation of accounts and verification exercise (which was yet to be carried out), there was an existence of a dispute between the Corporate Debtor and the Respondent and the Corporate Debtor was not liable to make any payment to the Respondent until that exercise was completed; (ii) The Corporate Debtor had specifically stated that the postdated cheques aggregating to Rs.40 lakhs had been returned by the Respondent to the Corporate Debtor since the Corporate Debtor had refused to make any payments to the Respondent unless the exercise of reconciliation and verification had been completed. (iii) The invoices did not stipulate any date of default. (iv) The application was not maintainable as each invoice pertained to different and distinct transactions/ contracts. A copy of the Affidavit in Reply dated 6th July 2021 is annexed hereto and marked as Annexure D . 7.21 The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Advertisers through its proprietor Mr. Sanjiv Gupta (hereinafter referred to -as the Original Petitioner for the convenience of this Hon'ble Appellate Tribunal) for the purpose of opposing the present Appeal as well as Interlocutory Application No. 1649 of 2021 filed by the Appellant seeking a stay of the order dated the 2nd of August, 2021, passed by the Adjudicating Authority in Company Petition No. (IB) 1393 of 2020 (hereinafter referred to as the impugned order for the convenience of this Hon'ble Appellate Tribunal). Through the impugned order, the company by the name of Sai Estate Consultants Chembur Private Limited (hereinafter referred to as the Corporate Debtor for the convenience of this Hon'ble Appellate Tribunal) was ordered to undergo Corporate Insolvency Resolution Process (hereinafter referred to as CIRP for the convenience of this Hon'ble Appellate Tribunal). 2. The Appellant abovenamed has filed the present appeal under section 61 of the Insolvency and Bankruptcy Code, 2016, (hereinafter referred to as the IBC for the convenience of this Hon'ble Appellate Tribunal) seeking to challenge the impugned order on the ground better set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the arrangement between the parties, the interpretation which is now sought to be put on the phrase payable when able by the Appellant is clearly facetious and erroneous. As per its literal interpretation, the phrase payable when able suggest that the Corporate Debtor sought to make payment only when it is financially capable of doing so. In other words, the very usage of the defence of payable when able shows that the Corporate Debtor is an insolvent entity. It is only now that the Appellant seeks to suggest that this phrase means that payment was to be made by the Corporate Debtor to the Original Petitioner after reconciliation of accounts. This could not possibly be the true meaning behind the arrangement of payable when able . 6. Furthermore, in the paragraphs under reply, the Appellant also seeks to suggest that the invoices raised by the Original Petitioner did not specify any due date. However, a perusal of the chart at pages 73-74 of the memorandum of appeal (which forms part of the ~ Form V filed by the Original Petitioner with the Adjudicating Authority) sets out the date of defaults with respect to each of the unpaid invoices. As per the Confirmation L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btor has never raised any objections to any of the invoices. It is certainly a moonshine defence to seek to cast doubt upon the invoices years after they are raised and only after receiving notices for payment. The Appellant has admitted that the Corporate Debtor had received all of the invoices which is clear from the fact that each of them also contains an endorsement to that effect along with the seal on stamp of the Corporate Debtor. Notably, the invoices have not been denied. 8. With respect to paragraph 7.5 of the memorandum of appeal, the Original Petitioner denies the contents therein as they are false and misleading. The falseness of the assertion of the Appellant is clear from the fact that each of the tabular statements containing details of the services rendered bears the stamp and seal of the Corporate Debtor. Furthermore, these tabular charts can easily be co-related b with the confirmation letters insofar as the total amounts payable under both match. It is clear that these are baseless assertions being put forth by the Appellant with the sole intention of avoiding the admitted liability owed by the Corporate Debtor to the Original Petitioner. 9. With respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting forward any actual dispute cannot amount to a pre-existing dispute as understood under the provisions of the IBC. 11. The falsity in the case of the Appellant is further clear from the fact that the Original Petitioner agreed to meet with the Corporate Debtor on the 14th of March, 2020, for the purpose of reconciliation of accounts. However, instead of meeting the Original Petitioner, the Corporate Debtor sent a letter to him on the 14th of March, 2020, (i.e., the date upon which reconciliation was to take place) seeking to stall the meeting by calling for documents which were already available with it. In fact, a perusal of this letter dated the 14th of March, 2020, itself shows that the Corporate Debtor could not put up any case beyond making bare denials. Even through this letter, the Corporate Debtor has not raised any dispute in terms of section 5 (6) of the IBC but has simply denied its liability in toto and called for documents. If the Corporate Debtor were genuinely interested in a reconciliation of accounts, then it would have participated in the meeting proposed by the Original Petitioner to do so. It is clear from a perusal of the documents on record that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g any concrete dispute about the same. 14. With respect to paragraphs 7.9 and 7.10 of the memorandum of appeal, the Original Petitioner denies the contents therein as they are false and misleading. The Appellant is seeking to raise this case for the first time in the present appeal. A perusal of the documents on record will go to show that there was no such practice between the parties as is now sought to be alleged in the paragraph under reply. Rather, the documents on record show that detailed confirmation letters were issued by the Original Petitioner and were countersigned by the Corporate Debtor. It is also clear that details of the services which are being provided by the Original Petitioner were contained in the form of tabular charts which were countersigned by the Corporate Debtor. At no point of time as the Corporate Debtor raised an allegation that services claim to have been rendered were not actually done so. Even today, this is not the case of the Appellant. The Appellant is merely stating that it seeks to conduct the exercise of reconciliation to ascertain whether or not there is any deficiency in .the services rendered by the Original Petitioner. This cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C. 17. With respect to paragraph 7.13 of the memorandum of appeal, the Original Petitioner denies the contents therein as they are false and misleading. The Appellant has not been able to produce any document corroborating his baseless assertion set out in the paragraph under reply. This assertion is nothing but an afterthought on the part of the Corporate Debtor with the intention of scuttling/avoiding the initiation of its CIRP. 18. With respect to paragraph 7.14 of the memorandum of appeal, the Original Petitioner denies the contents therein as they are false and misleading. As has been stated above, the Corporate Debtor was in receipt of invoices, confirmation letters, and tabular charts of services rendered, and had not raised any dispute upon the same for more than a year. In fact, even in its letters dated the 20th of February 2020, and the 14th of March, 2020, the Corporate Debtor did not raise any dispute or deficiency with respect to the documents which had admittedly been received by it. It only sought reconciliation for the purpose of stalling its liability to make payment. There was no positive denial of the debt owed by the Corporate Debtor to the Original Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been stated by the Original Petitioner above. It is clear that the bogeyman of reconciliation was raised by the Corporate Debtor for the sole purpose of delaying and avoiding the payments admittedly due and payable by it. Rather than accepting the request of the Original Petitioner to meet on the 14th of March, 2020, for the purpose of discussing reconciliation of accounts, the Corporate Debtor are sought to further obfuscate the matter by calling upon the Original Petitioner to submit documents which were admittedly in its possession. It is pertinent to note that the Corporate Debtor did not raise any dispute with respect to the services rendered by the Original Petitioner but only sought reconciliation of accounts. The Corporate Debtor did not deny its liability nor did it make any positive assertion as to its lack of liability to make payment to the Original Petitioner. In fact, as were set out in the said petition, the Corporate Debtor had paid TDS upon the outstanding invoices thereby acknowledging and admitting that it was liable to the Original Petitioner. The Appellant has no explanation as to why TDS was paid to the revenue on account of the invoices raised by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e much prior to issuance of Notice under Section 8 of the IBC by the Operational Creditor/Respondent No.1. According to Learned Counsel for the Appellant if there were pre-existing dispute, there was no reason for the Adjudicating Authority to entertain the Application under Section 9 of the IBC filed by the Operational Creditor/Respondent No.1. He submits that the Learned Adjudicating Authority ignoring those documents and also overlooking the pre-existing dispute has passed the impugned order. According to the Learned Counsel for the Appellant the order impugned is in the teeth of judgement of Hon ble Supreme Court passed in Mobilox Innovations Pvt Ltd V Kirusa Software Pvt Ltd (2018) 1 SCC 353. Besides making oral submissions the Learned Counsel for the Appellant has also filed Notes of Written Submissions which is reproduced hereinbelow:- 1.1 The Operational Creditor was to provide advertisement services through outdoor hoardings to the Corporate Debtor. 1.2 Given the nature of these services, prior to payment being made under an invoice raised by the Operational Creditor, the Corporate Debtor would have to be convinced that the Operational Creditor had put up the hoa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute: (Pg. 174 para-viii) 2.2.1 The Corporate Debtor specifically took the stand in its letter dated 20th February 2020 (Pg.144- 145) that the alleged liability / claim was disputed / not admitted and that the supporting documents had not been provided despite repeated requests and reminders. Hence, it had not been able to verify whether the services had actually been provided or not, and there was a need for reconciliation/ verification (paras 2 to 4). The same are reproduced hereinbelow for ease of reference: 2. At the outset, we state and submit that the amount of debt sought to be claimed by you is denied by us in toto, even the debit note raised by your goodselfs are been denied. Infact you have sought to miss-appropriate the amounts paid by us as per your own whims and fancies, thereby causing a huge challenge for reconciliation of accounts, for this reasons alone the alleged claims raised by you along with interest is disputed. 3. At the further this is to place on record that there are no supporting documents provided for the bills raise and in good faith we have paid to you a on account payments to the tune of Rs.1,25,00,000/- for which the supporting d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s letter is set out hereinbelow for ease of reference: 4. From the aforesaid circumstances it appears that you have excessively billed us we will be only be in a position to a way forward only after the below mentioned are provided to us. i. Details ledger of global Advertisers. ii. Copies of all hoardings and supporting documents as a part of monitoring activities including dates on which hoardings were live iii. copy of creative used for every hoarding. iv. Signed hard copes of all invoices that need to be reconciled v. PO/Confirmation emails for all orders sent across from our side to Global Advertisers vi. Also allocation of 1.25 Crore which has already been paid to you. 2.2.4 It is most important to note that there was NO response whatsoever to the 14th March, 2020 letter from the Operational Creditor. No supporting documents were provided post 14th March, 2020 till date by the Operational Creditor to the Corporate Debtor in support of its alleged claim. The meeting fixed for reconciliation on 14th March, 2020 could not be held in view of the COVID 19 pandemic (see para 5(xv) at Pg.175 of Reply) that had started and also because the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the dispute is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defence is likely to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Reliance on Invoices / Written Confirmations is misplaced: 3.1 The written confirmation / purchase orders were necessarily issued prior to the provision of the services and hence are of no assistance to the Operational Creditor to prove whether services were actually provided or not. 3.2 As for the invoices, they are vague, devoid of basic particulars of the services actually provided such as period, specifications, locations, rates, etc. Some of the invoices were raised several months after the alleged provision of services. Hence, the issuance of the invoices by itself does not demonstrate that the services were provided. In any case, all the invoices in fact bear an endorsement that they had been received without being checked and / or bear an endorsement that they had been received for verification (see the handwritten endorsements at the bottom of pgs. 88, 94, 97,101,104,109,113,117,121,123,131,133,135). This further substantiates the stand of the Corporate Debtor that verification was mandatory and in the absence thereof, the Operation Creditor cannot claim monies to be due or the Corporate Debtor to be in default. (see para 5(iii) at Pg. No. 169 ). 3.3 Thoug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich they claim to have been provided; (b) these have also been only received by the Corporate Debtor subject to verification and do not constitute an acceptance of liability; and (c) in any event, it is post these purported certificates that parties agreed to carry out the exercise of accounts reconciliation and verification. 4. Re: Deposit of TDS does not amount of acknowledgment of liability: 4.1 The Operational Creditor has relied upon the fact that the Corporate Debtor has deposited TDS amounting to Rs.3,96,540/- in respect of the Operational Creditor. According to the Operational Creditor, this constitutes an acknowledgment of liability. In the Corporate Debtor s respectful submission, this, neither in fact nor in law can be stated to be an acknowledgement of liability in favour of the Operational Creditor. 4.2 Factually, the aforesaid chain of correspondence and stand taken therein clearly reflects that the Corporate Debtor had denied its liability towards the Operational Creditor, whilst seeking an accounts reconciliation and verification exercise. Moreover, no TDS certificate has been produced by the Operational Creditor. Apart from a bare statement in the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legal action as an afterthought insignificant dispute was raised by the Appellant. The Learned Adjudicating Authority considering the fact that there was no pre-existing genuine dispute, has rightly entertained the petition filed under Section 9 of the IBC and initiated CIRP. According to him the impugned order warrants no interference. The Learned Counsel for the Respondent has also filed Notes of Written Submissions in the present Appeal. Its written submissions is reproduced hereinbelow: 1. OC [M/s Global Advertisers] occupied in the work of putting up billboards and Hoardings. CD [M/s Sai Estate Consultants Chembur Pvt. Ltd.} is a real estate agent. OC and the CD are in business relationship regarding carrying out Display and Mounting of advertisements for the projects provided by the CD. 2.As per the written confirmation letters issued by the OC and duly signed by the CD, OC carried out display of advertisements on hoardings at various sites BETWEEN THE PERIOD COMMENCING FROM 10.03.2017 to 29.06.2019, and after displaying the advertisements, the OC raised 30 Invoices for the services rendered aggregating to a sum of Rs.4,74.55,683/- and against receipt of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of receipt of all the documents as called by him, never disputed, nor denied the contents/authenticity of documents, contending there is a pre-existing dispute. [Letter dated 23.06.2020@ Page 157-158 of Appeal] NOTE: Till date no dispute of any nature in respect of the display of the advertisement carried out, amount claimed in the petition or about the payment of TDS admitted paid by the CD on all the invoices, or denied or disputed the claim made by the CD in the petition save and except false and frivolous contention, with regard to any specific invoice or work mentioned therein is raised. Chart of page numbers of Invoices with dates and that of Confirmation with dates is at APPENDIX-1. 3. Statement of Account from 01.04.2020 to 30.06.2020 reflecting the total display of advertisements carried out by the OC (as per invoices raised) on behalf of the CD amounting to Rs. 4,74,55,683/-. [Statement of Account- Pg. 81} [Statement reflecting the payment made by the CD- Pg. 82-83} NOTE: That the statement of accounts has been verified and accepted by the RP and report to that effect is filed before NCLAT [@Pg. 87 (agenda 5) of the Status Report by RP dated 04.09.2021] T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CD and all invoices were duly submitted after execution of work as detailed in the confirmation letters. [@Page 146-147 of Appeal]. However, as a good gesture an appointment was also fixed on 14th of March. NOTE- CD never attended any the meeting. (Ld. Counsel verbally mentioned reason for non-meeting as 'COVID' during arguments, which otherwise is dehors the pleadings.) vi. On 14.03.2020, in order to avoid meeting, CD wrote a communication to OC, without raising any substantial dispute but by making a vague statement(s). CD sought certain documents from OC, which documents were in fact already available with the CD.[@ Page 178-179]. NOTE- Till this date there is no dispute of any nature raised by the CD. vii. On 12.06.2020, CD served Demand Notice to OC. [@ Page 151-156 of Appeal]. NOTE: All documents being Statements, Invoices, Confirmation Letters, Xerox of cheques, Out-standing sheets, letters etc. were attached with the demand notice. [Ref: S. No. 7 on Page 155]. viii. After having received all relevant documents as attachment to Demand Notice and the Demand Notice under the IB Code. CD failed to point out any dispute of substantial natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of last 3 invoices, cash payment is made. After 2-8-19, in response to the OC letter, CD issued 20 post-dated cheques of Rs.S,OO,OOO/- each, out of which 10 cheques were honoured and 2 dishonoured for FUNDS INSUFFICIENT, and 8 cheques were returned on the assurance that the same will replaced by pay order /RTGS and still no dispute raised. - 20.02.2020 - Without disputing the liability, the CD contended PAYABLE WHEN ABLE and failed to explain the said contention despite the honourable court repeated asked to explain the same. - Frivolous dispute is sought to be raised that the documents sought vide letter dated 14.03.2020 are not supplied, which is incorrect on record in as much as everything supposed to be supplied as per the understanding between the parties were duly furnished along with the 'demand notice' dated 12.06.2020. - The amount claimed in the Petition by the OC is duly reflected in the COs Books of Accounts as confirmed by the RP is due and payable in COs audited books of accounts. - The liability of the CD far exceeds its Assets and CD is unable to discharge its liabilities in the normal and ordinary course of business and several ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u, for providing Billboards for the various displays approved by you, wherein we had carried out the Display and Mounting of advertisement on your behalf at various location in Mumbai, Thana, Mira-Bhayandar Virat as set out in the Work Completion report and had submitted the necessary invoices issued to you and these invoices were duly accepted and acknowledged by you, without raising any objection as to the contents of display till date. In our previous meeting in May, 2019, at your office you had committed to Pay us Rs.1.30 cr by July, 2019 but out of this, we received only Rs.35 lacs till 1st August, 2019, thereby a shortfall of 95 lacs which was required to be paid till the 10th August, 2019. After a lot of follow-up, meetings and calls, and since no payments were forthcoming we wrote a letter dated 02.08.2019 (send by speed post) which was received by you. On receipt of our letter dated 02.08.2019, you called Mr.Vicky Gupta for a meeting to discuss and finalise the interest rate @ 18% p.a. which was levied on the total outstanding from the start till date of realisation or payment till 2nd August, 2019. The interest Debit note was accepted by you. Since the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and clear the entire overdue outstanding against your account at the earliest. We would appreciate your prompt action and would be pleased to receive your payment as this amount is long overdue from your end. We look forward to a better and cordial business relationship with you organisation in all our future business endeavour. Yours faithfully, For Global Advertisers Sd/- Rajiv Gupta CA to Proprietor. 13. The Appellant s letter dated 20th February, 2020 which was addressed to Respondent No.1 reflects regarding pre-existing dispute. In its letter dated 20th February, 2020 while referring to letters of Respondent No.1 dated 2nd August, 3rd August, 2019, 20th August, 2019, 4th September, 2019 30th September, 2019 and 6th February, 2020, the Appellant in categorical term had denied regarding demand raised by Respondent No.1. The letter dated 20th February, 2020 at Page 144 and 145 of the Memo of Appeal is reproduced herein below: - We the undersigned address you as under: 1. At the outset we deny each and every insinuations set out in the said letters and state and submit that the averments and insinuations are untenable and invalid. 2. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd payable. These amount per-se are contrary to the understanding and as such the demand of these amounts are premature and therefore the demand raised under the said letters are illegal and incorrect. 8. Without prejudice to our rights and contents and as we have had a friendly understanding, we forthwith invite you to meet the undersigned and resolve the difference, if any, hope better sense shall prevail. Yours Truly, For Sai Estate Consultants Chembur Private Ltd Sd/- Vicky Wadhwani Director 14. Besides other documents letter dated 11th March, 2020 addressed to the Corporate Debtor issued on behalf of the Operational Creditor makes it clear that for reconciliation of account date was fixed to 14th March, 2020. However, record shows that thereafter no reconciliation of accounts had taken place in between the parties. It goes without saying that in accounting, reconciliation is the process of ensuring that two sets of records are in agreement. Accordingly it can be inferred that in absence of reconciliation of accounts there was pre-existing dispute between the parties. At this juncture it is necessary to reproduce the letter dated 11th March, 2020 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Private Limited (2018) 1 SCC 353 has already set the present position at rest. It would be profitable to quote para 40 of the said Judgement, which is 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 arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the dispute is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defence is likely to succeed. The Court does n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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