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TMI Blog2022 (8) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... ted:- 4-8-2022 - [ Justice Rakesh Kumar ] Member ( Judicial ) And ( Dr. Ashok Kumar Mishra ) Member ( Technical ) For the Appellant : Mr. Vinay Navare , Sr. Advocate , Mr. Bhaskar Vali , Mr. Rajat Jain , Advocates For the Respondents : Mr. Krishnendu Datta , Sr. Advocate and Mr. Ashish Verma , Advcoates JUDGMENT DR. ASHOK KUMAR MISHRA , TECHNICAL MEMBER 1. The Appeal has been filed by the Appellant under Section 61 of the Insolvency and Bankruptcy Code 2016 (the Code) against the impugned order dated 30.09.2019 passed by the National Company Law Tribunal, Principal Bench, New Delhi (the Adjudicating Authority) in C.P. No. IB-1377(ND)/2019. The Appellant has sought the followings reliefs: To set aside the impugned order dated 30.09.2019, passed by the Adjudicating Authority in C.P No. (IB) 1377 (ND)/2019 as challenged in the present appeal and admit the application filed by the appellant under Section 9 of the Code etc. 2. The Adjudicating Authority, while passing the impugned order dated 30.09.2019 has observed the followings: 12. After hearing submissions of both the parties, this Bench is of the view, that the Debit Notes (Dated 31.03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of these supplies and the CD would make lump sum, on account, payments against the dues outstanding in the said running account. The period of payment allowed to the Respondent was 120 days from the date of transaction and as per the agreed terms interest of 18% p.a. on the delayed payment. The lump sum payment would get adjusted against the earliest pending bills first and the remaining amount would be adjusted against the next earliest pending bill. b) It is submitted by ld Sr. Counsel for the Appellant that the Appellant has placed the order on Bharat Aluminum Company Limited (BALCO) and goods were delivered to the Respondent /CD directly by BALCO. It is the case of the Appellant that last 11 invoices, dated 18.04.2015 to 08.05.2015 remain unpaid and the amount of the 11 invoices is Rs. 3,85,90,422/- out of which the unpaid amount is Rs. 3,15,39,380/-. c) Ld. Sr. Counsel for the Appellant has stated that demand notice dated 19.11.2018 was issued under Section 8 of the Code and the reply was sent by the Respondent on 30.11.2018 purportedly raising a dispute. The Appellant is also stated that the Respondent alongwith reply has produced three fabricated and manufactured Deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the contract. f) The Ld. Sr. Counsel for the Appellant has alleged that the Adjudicating Authority has completely overlooked the email dated 07.05.2015 appearing at page no. 192 Annexure A-12 vide which the Appellant has already sent its ledger to the Respondents thereby seeking confirmation of accounts. These ledgers attached with the said email pertains to the Appellant and its various sister concern transaction with the Respondent. g) The Ld. Sr. Counsel for the Appellant has also submitted that the Respondent placed on record four debit notes allegedly issued to the Appellant as its sister concerns on account of short supply, as detailed in the chart below. The Respondent s claim as put forth through these four debit notes is that the Appellant alongwith its sister concerns, collectively, was obligated to supply a total of 2350 MT of Aluminum Ingot. The debit notes raised against the sister concerns formed part of the record before the Adjudicating Authority. h) It was also submitted even though written submission received in this Tribunal vide Diary No. 31527 dated 31.05.2022 that the Respondent placed on record a chart showing the calculation of quantity goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irst time on 03.12.2018 in response to the section 8 notice. However, the said case is patently false on a bare perusal of the facts/record of the present case. At the first instance, the said debit notes dated 31.03.2015, 31.05.2015 and 12.04.2016 bear a sign and stamp of the Appellant. The sign and stamp clearly evidence receipt of the debit notes by the Appellant. Therefore, the Appellant at this stage cannot take the plea that they received the debit note for the first time on 03.12.2018. Without prejudice to the aforestated, it is submitted that the Appellant s contention that the debit notes are forged and fabricated are required to be proved in Trial in accordance with the rules of evidence and cannot be accepted ex facie. The said very contention that the said debit notes are forged and have not been issued by the Respondent, in the light of the same having been duly stamped and signed by the Appellant as per the Respondent, constitute a dispute between the parties which requires adjudication. In light of the existence of the said very dispute the petition was filed by the appellant has been rightly rejected by the Adjudicating Authority. c. The Ld. Sr. Counsel has also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any amount due and outstanding. On 03.09.2015. An email was issued by the Director of the Appellant Company containing the statement of accounts of a company by the name of Laxmi Metals Works (sister concern of the Respondent) . The 'Respondent on 03.09.2015 herein replied to the said email requesting for the accounts of all other companies with which the Respondent was doing business. This would naturally include the accounts for the transactions between the Appellant and the Respondent. The director of the Appellant however never sent the accounts for the transactions between the Appellant and the Respondent, on the pretext that they were under income tax assessment. It is submitted that despite having an opportunity to share account confirmation, and categorically refute the debit notes, the Appellant did not even make a reference to any outstanding amount between the Parties. It is pertinent to note that at no point after did the Appellant ever share the accounts between the parties. The logical inference of this is that the debit notes stood accepted by the Appellant. On 26.12.2015, the Appellant once again issue an email to the Respondent, this time requesting for C Form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the firm. All these are also mingled up. There is a Memorandum of Understanding(MoU) Financial Year 2018-19 between the Respondent and BALCO also appearing at page 67 of the Reply where price computation is a derived price from the various pricing options perhaps this is prevailing business practices in this field. e. The claim of the Respondent is that the Appellant has never delivered the contracted quantity and they are supporting it by way of emails dated 16.07.2015 appearing at page 73 of the Reply. What is not in dispute that the Operational Creditor/Appellant is supplied of raw material and the CD /Respondent is a manufacturer and supplier of qualitative range of aluminum Hot rolled plats etc. f. It is also apparent while going through both the Appeal and the reply by the Respondent that the industry practice for adjustment of rates and quantity/quality adjustment in release of payments is generally done through Debits Notes or Discounts. g. It is also not in dispute that since May, 2015, there has been no purchase of any material from the Operational Creditor. h. There is some dispute with respect to supply of Form-C. Even the Operational Creditor claims for no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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 reject the application. k. It is apparently very much clear that the there is a dispute between the parties in relation to either issue of Form-C or in the issue of dues payable. The Code is very much clear and settled that Section 9 of the Code can be invoked only if there is no notice of dispute has been received by the Operational Creditor as per Section 9(5)(d) of the Code. For brevity and clarity, the same is depicted below: The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order- (1) admit the application and communicate such decis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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