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TMI Blog2022 (9) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed by the Operational Creditor is Rs.46,39,622/- along with interest @14% on and from 90 days from the date of invoice till the date of final payment. The Demand notice under section 8 of the Code was issued by the Operational Creditor on 22.11.2019. The Corporate Debtor replied to the same vide letter dated 11th December 2019. 5. Submissions on behalf of the Operational Creditor: 5.1 The Operational Creditor is engaged in the business of supplying agrochemicals, insecticides, herbicides, pesticides, etc. 5.2 Upon various purchase orders being placed by the Corporate Debtor, the Operational Creditor supplied different varieties of agrochemicals to the Corporate Debtor. After each delivery, a tax-invoice was raised, which was received by the Corporate Debtor at its office, in Kolkata. 5.3 The said goods were received by the Corporate Debtor without any protest or demur as to the quality, quantity, or branding of the goods. The Corporate Debtor's account with the Operational Creditor was a running and continuous one. 5.4 In ordered to escape its liability, the Corporate Debtor has raised issues regarding one supply of 20 liters of pesticide of 'Miteshot' Brand, stating that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the supply of chemicals and pesticides. Mr. Kailash Dhaundival, one of the directors of the Operational Creditor used to deal with the Corporate Debtor. Mr. Kailash Dhaundival along with the other officers of the Operational Creditor used to visit the tea garden of : liters the Corporate Debtor from time to time and used to suggest what chemical and pesticides would be beneficial for tea plantation and what would be effective to protect the tea plantation from damage from pest attack. 7.3 Since the Corporate Debtor used to place orders on the basis of the advice given by the Operational Creditor and relied upon the skill and judgment of the Operational Creditor, the parties were effectively in a fiduciary relationship for several years and the Corporate Debtor reposed faith and trust in the Operational Creditor. 7.4 Prior to 2012, the Corporate Debtor was using the chemical from 'Magister' brand for protecting tea plantation from being damaged by pest. After the Corporate Debtor started the business with the Operational Creditor in 2012, the Operational Creditor also recommended and supplied 'Magister'. 7.5 In the year 2018, when the Corporate Debtor required the supply of 'Mag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Debtor that Mr. Ishan Dhaundival is the son of Mr. Kailash Dhaundival. The representative of the Operational Creditor acknowledged and admitted that 'Miteshot' was not effective in controlling the pest resulting in huge loss. 7.10 The Corporate Debtor returned the balance chemical of 'Miteshot' brand to the Operational Creditor and the Operational Creditor in turn issued a credit note to the Corporate Debtor in respect of the returned `Miteshot' brand chemicals. 7.11 By a letter dated 29th July, 2019 the Corporate Debtor informed the Operational Creditor regarding the financial loss suffered by the Corporate Debtor due to the Operational Creditor. The Operational Creditor replied to the said letter by its letter dated 2nd August, 2019 and raised frivolous allegations. The Corporate Debtor thereafter made further enquiries and was shocked to find out that Mr. Kailash Dhaundival, a Director of the Operational Creditor has a company named Proxichem LLP. The designated partners of Proxichem LLP are Kailash Dhaundival and his son, Ishan Dhaundival. 7.12 The Corporate Debtor learnt that Proxichem LLP is the manufacturer/supplier of 'Miteshot'. The seller is Proxichem LLP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is accordingly denied that Mr. Kailash Dhaundiyal and other officers used to visit the garden of the Corporate Debtor so as to advise it and suggest them the chemicals and pesticides to be used as alleged or at all. 8.3 The Operational Creditor has denied and disputed that even 'Magister' was advised by the Operational Creditor to be used by the Corporate Debtor as alleged or at all. The Operational Creditor states that in the year 2018 to 2019 the operational creditor has supplied to the Corporate Debtor 420 liters. of 'Magister' as such it is false to contend that the Operational creditor did not supply 'Magister' to the Corporate Debtor and instead supplied 'Miteshot' to them. 8.4 Even assuming for the sake of arguments that the Operational Creditor used to promote the 'Miteshot' brand that was manufactured by some alleged sister concern of the Operational Creditor and such pesticides backfired and instead of eliminating the red spiders caused further infestation, the Corporate Debtor should have then and there only stopped receiving such supplies and not wait till July, 2019 to take up this issue of the crops being infested. The said contention of the Corporate Debtor is on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- to be deposited at a later date on 18.07.2019. There was no mention of any damage or loss caused to the corporate debtor for any supply of 20 liter 'Miteshot' made in May 2019 and repeated assurance was provided to the operational creditor that it's dues will be settled as quickly as possible. 9. Analysis and Findings: 9.1 We have heard the Ld. Counsel for the Operational Creditor and the Ld. Counsel for the Corporate Debtor and perused the record. 9.2 When this matter was taken up for consideration, the preliminary objection of the Corporate Debtor was that there is pre-existing disputes in the matter and therefore, the petition is liable to be rejected. 9.3 While arguing, the Ld. Counsel for the Corporate Debtor drew our attention to the letter dated 29th July 2019 on page 227 of volume II of the petition. 9.4 It is stated that tis letter was written by the Corporate Debtor to the Operational Creditor much prior to the Demand Notice dated 22nd November 2019 . 9.5 A scanned copy of the letter dated 29th July 2019 has been extracted below: 9.6 The Ld. Counsel for the Operational Creditor, while rebutting the contention of the Corporate Debtor has drawn our attention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs, which is pre-existing - i.e. before such notice or invoice was received by the corporate debtor. The moment there is existence of such a dispute, the operational creditor gets out of the clutches of the Code." (Para 29) The Apex Court, in Mobilox Innovations Private Limited (Supra) further held that: "...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 reject the application." (Para 40) 9.10 Keeping in mind the aforementioned judgment, we are of the opinion that the pre-existing disputes in the instant case are not mere feeble argum ..... 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