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TMI Blog2022 (8) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... these later invoices occurred when the dispute regarding non-delivery of drawings/services by the Operational Creditor arose and lends credence to the claim of the Corporate Debtor that he had repeatedly raised the issue of non-delivery of drawings by the Operational Creditor and which the Operational Creditor had failed to provide timely as per the agreement. There is therefore, a pre-existing dispute and all the claims of the Corporate Debtor were mentioned in the relevant emails annexed under 'Annexure R1' and 'Annexure R2' of the Reply filed by them. After giving careful consideration to the entire matter, hearing the arguments of the learned counsels for the Operational Creditor and the Corporate Debtor; and upon appreciation of the documents placed on record to substantiate the claims, this Adjudicating Authority is of the view that there is a pre-existing dispute under S. 8 r/w S. 9 of Insolvency and Bankruptcy Code, 2016 - Application dismissed. - IB-3168/(ND)/2019 - - - Dated:- 19-7-2022 - P.S.N. Prasad, Member (J) And Rahul Bhatnagar, Member (T) For the Appellant : Rahul Gupta and K. Datta Associates ORDER Rahul Bhatnagar, Member (T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puted or paid. v. That the Operational Creditor issued three reminder emails in relation to pending invoices between January to March 2019. However, they were not replied to. vi. That constrained by the adamant attitude of the Corporate Debtor, the Operational Creditor issued a Demand Notice under S. 8(1) of the Insolvency and Bankruptcy Code, 2016 read with clause (a) of sub-rule (1) of Rule 5 of the IBC (Application to Adjudicating Authority Rules) 2016 on 23.10.2019 by speed post and courier to the registered office of the Corporate Debtor and further by way of email to the registered email address of the Corporate Debtor but the Operational Creditor did not receive any reply from the Corporate Debtor to the said demand notice within 10 days. vii. It is averred that the said behavior of the Corporate Debtor is extremely unethical and wrongful. The Corporate Debtor has grossly defaulted in making payment of the outstanding dues, amounting to INR 27,00,000/- (Twenty-Seven Lakhs) of the Operational Creditor (on account of 5 unpaid invoices) and therefore, the Applicant has filed the present application under Section 9 of the Insolvency and Bankruptcy Code, 2016 to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the work was completely stopped by the Contractor in July, 2018 for requirement of structural drawings of non-tower area NT-2 NT-3 NT-4. In addition, thereto, services like plumbing, electrical, including ESS, panels/transformers, fire-fighting, STP, electricals including ESS, panels/transformers, firefighting, STP have not been delivered till date. (ii) It has been submitted that the Respondent Company is suffering huge losses @ 10/- per sq. ft. per month which is to be paid to the customers. (Total Saleable Area 13,56,213 sq.ft. @ Rs. 10/- =1.356 Cr. per month = Rs. 16.27 Cr upto December, 2019). (iii) It has been submitted that EWS-1 drawings are not available with the Respondent Company. As per DTCP Approvals, EWS is also to be constructed and to be handed over to the clients. The non-availability of these drawings is also delaying the completion of the project. (iv) It has been submitted that due to the delay incompletion of the project which has been caused due to non-delivery of drawings by the Architect/Operational Creditor, the Respondent Company had to spend an amount of INR 68,45,000/- for renewal of license which is an additional cost for the Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim and that therefore, in absence of any admission and due crystallization of any amount as allegedly due and payable, the default clause under the provisions of Insolvency and Bankruptcy Code, 2016 is not triggered. 8. Lastly, it is argued that the provisions of the Insolvency and Bankruptcy Code, 2016 cannot be used as a recovery mechanism to extract undue amounts and the filing of the captioned insolvency petition is nothing but an abuse of the process of law. 9. Also, the Insolvency Petitions are not Recovery Petitions as held by the Hon'ble Supreme Court in the matter of Transmission Corporation of Andhra Pradesh Limited vs. Equipment Conductors and Cables Limited (Judgment dated 23.10.2018 in Civil Appeal No. 9597/2018), hence, the Adjudicating Authority does not have jurisdiction to go into bonafide of a dispute and the existence of disputes is sufficient to dismiss the insolvency petition. 10. All the claims of the Corporate Debtor were mentioned in the relevant emails annexed under Annexure R1' and Annexure R2' of the Reply filed by them. 11. It is the argument of the operational creditors that the allegation of the deficiency of services is not ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem. It is also apparent that the Operational Creditor is trying to use this forum and the proceedings under S. 9 under Insolvency and Bankruptcy Code 2016 as a means to secure the payment of certain invoices i.e. as a debt recovery mechanism which is not the purpose or intention of the IBC 2016. This has been held by the Hon'ble Supreme Court in cases such as Parker Hannifin India Pvt. Ltd. v. Prowess International Pvt. Ltd., (para 17) and M/s. Kuntal Construction Pvt. Ltd. v. M/s. Bharat Hotels Ltd. in Company Appeal (AT) (Insolvency) No. 542 of 2020 (para 18). Further, the Court has held in cases such as M/s. Brand Realty Services Ltd. v M/s. Sir John Bakeries India Private Limited (Company Appeal (AT) (Insolvency) No. 958 of 2020) and Neeraj Jain v Cloudwalker Streaming Technologies Private Limited (Company Appeal (AT) Ins No. 1354 of 2019) that the mere fact that Reply to notice under S. 8(1) has not been given within 10 days or no reply to demand notice having been filed by the Corporate Debtor does not preclude the Corporate Debtor to bring relevant materials before the Adjudicating Authority to establish that there is a pre-existing dispute which may lead to the rejecti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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