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TMI Blog2022 (7) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... debit note is being raised on account of bad and rejected material dispatched by the Appellant Company. The Hon ble Supreme Court in MOBILOX INNOVATIONS PRIVATE LIMITED VERSUS KIRUSA SOFTWARE PRIVATE LIMITED [ 2017 (9) TMI 1270 - SUPREME COURT] , has observed 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. Merely because there were settlement talks between the parties it cannot be construed that the debt is due and payable as envisaged under the Code, specifically keeping in view the ratio of the Hon ble Supreme Court in Mobilox Innovations Private Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority has rejected the Application, preferred by the Operational Creditor , under Section 9 of the Code. 2. Succinctly put, the facts in brief are that the Appellant Company engaged in manufacturing, trading and selling of Refractories items used in Steel Plants. It is averred that pursuant to the Purchase Orders placed by the Respondent Company, the Appellant had supplied Laddle Refractories, to the Respondent from time to time and raised 7 invoices with respect to supply of goods for the period between November 2016 and January 2017. It is stated that the sum total of the amounts due and payable excluding interest is Rs.3,05,809/-. 3. Learned Counsel for the Appellant submitted that a Demand Notice dated 16.05.2018 was issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tract (India) Limited Vs. Raheja Developers Ltd. decided on 23.07.2019 wherein it was held as follows: 18. From the aforesaid decision, it is clear that the existence of dispute must be pre-existing i.e., it must exist before the receipt of the demand notice or invoice. If it comes to the notice of the Adjudicating Authority that the operational debt is exceeding Rs.1 Lakh and the application shows that the aforesaid debt is due and payable and has not been paid, in such case, in absence of any existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt , the application under section 9 cannot be rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MR/60428/02 17.01.2017 39,245 VI. MR/63293/02 17.01.2017 78,483 VII. MR/63294/02 17.01.2017 30,983 7. The Learned Counsel for the Respondent Company submitted that seven different Debit Notes were issued to the Appellant Company on account of defective goods, the details of which are as follows: Sl. No. Debit Note No. Date Amount I. ASML/DEBITNOTE/_74_/2016/17 16.11.2016 30,983 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count of bad and rejected material dispatched by the Appellant Company. The Hon ble Supreme Court in Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited , (2018) 1 SCC 353, has observed as follows: 51. 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 bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yable as envisaged under the Code, specifically keeping in view the ratio of the Hon ble Supreme Court in Mobilox Innovations Private Limited (Supra). In their Reply to the Section 8 Notice, the Respondent Company has clearly raised a dispute and the material on record evidences that the Debit Notes were raised on account of rejection of poor quality material and therefore we are of the considered view that 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. This Tribunal is satisfied that the dispute truly exists in fact and is not spurious, hypothetical or illusory and hence we find no substantial grounds t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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