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TMI Blog2022 (9) TMI 1349X X X X Extracts X X X X X X X X Extracts X X X X ..... eries will be visited on conclusion of the contract. There are issues regarding releasing the final payment after observing the terms and conditions of contracts. The letter dated 20.12.2019 clearly communicated that issues regarding observing the terms and conditions of the contracts are yet not settled or decided and that was in process. The email further stated that Appellant is informed that very shortly the aforesaid issues would be settled . The above email does clearly belie the submission of the Appellant that before issuance of demand notice dated 30.12.2019 all the issues between the parties were settled. There are no substance in the submission of learned counsel for the Appellant that dispute, if any, existing earlier came to an end by the time Demand Notice was issued by the Appellant on 30.12.2019. The materials brought on the record before the Adjudicating Authority and also before us clearly indicate that there was pre-existing dispute with regard to payment of amount claimed by the Appellant and Appellant was duly communicated of the said dispute even prior to issuance of Demand Notice - No reliance on Minutes of Meeting dated 07.06.2019 be placed to accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponding recoveries from the payment of the Appellant. It was further mentioned that recoveries will be visited on conclusion of the contract. To the same effect is another email dated 15.02.2019 sent by the Corporate Debtor to the Appellant. (v) By email dated 16.04.2019, the Corporate Debtor informed the Operational Creditor about the short supply of Supervisor and security personnel and consequent recoveries from the payment. It was again mentioned that recovery will be visited on conclusion of the contract. (vi) Contract of the Appellant came to an end on 31.05.2019. After the contract was over, certain deliberation took place between the parties regarding finalization of the bill. (vii) Appellant claim that on 07.06.2019 a meeting was held where CMD of the Corporate Debtor instructed to release an amount of Rs.1 Crore and further release the remaining amount on final reconciliation. (viii) On 20.12.2019, a letter was written by the Deputy General Manager of the Corporate Debtor to the Appellant where it was communicated that there is an issue of releasing final payment after observing the terms and conditions of the contract and the issue is likely to be se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporate Debtor is required to show a pre-existing dispute and not a prior dispute. Existence or subsistence of the dispute which is recognized by the statute is a lawful genuine dispute to resist any initiation of CIRP. It is submitted that there is no pre-existing dispute. The dispute between the parties was resolved. Learned counsel for the Appellant has placed reliance on the Minutes of Meeting dated 07.06.2019. It is submitted that during the above meeting Corporate Debtor released an amount of Rs.1 Crore to the Appellant and balance amount was also agreed to be released after reconciliation. Reference to communication dated 20.12.2019 issued by the Corporate Debtor has also been made where the Respondent communicated that they are on the verge of completing the exercise, which has some shortcomings. It is further submitted that Demand Notice dated 30.12.2019 was required to be replied by the Corporate Debtor within ten days, however, no reply was sent and after more than 13 months letter dated 05.02.2021 was sent by the Corporate Debtor claiming to be reply to the Demand Notice. It is submitted that invoking of the arbitration by letter dated 05.02.2021 was also subsequent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im of the Appellant could not be said to be undisputed, however, the claim of the Appellant was stoutly disputed by the Corporate Debtor. Proceedings under Section 9 are not proceedings for recovery of money. IBC is not a forum for recovery of amount of bill as claimed by the appellant. Under the Notice Inviting Tender there being Arbitration Clause, the Respondent having invoked the Arbitration Clause and matter is pending before the Arbitrator, where the Appellant is not cooperating. 6. Learned counsel for the parties have placed reliance of various judgments of this Tribunal as well as judgments of Hon ble Supreme Court which shall be referred to while considering the submissions in detail. 7. The expression existence of dispute as occurring in Section 8 of the Code has been elaborately interpreted by the Hon ble Supreme Court in (2018) 1 SCC 353, Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software Pvt. Ltd. . In para 51 of the judgment, Hon ble Supreme Court laid down following:- 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( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not required to be satisfied as to whether the defence is likely to succeed or not. The Court also cannot go into the merits of the dispute except to the extent indicated hereinabove. It has been held that so long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has no other option but to reject the application. 10. We have to now examine the material on record which were placed before the Adjudicating Authority to find out as to whether the finding recorded by the Adjudicating Authority that there are pre-existing disputes are supportable from the evidence on record or not. 11. In the present case notice of demand was issued on 30.12.2019, hence, we proceed to examine the materials on the record before 30.12.2019 to find out was to whether there was any dispute raised by the Corporate Debtor regarding bills of the Appellant and further whether the dispute raised earlier was not existing on the date when Demand Notice was issued and has subsided as contended by leaned counsel for the Appellant. The Corporate Debtor has referred to Clause 25(a) and Clause 73 of the Notice Inviting Tender and Clause 35 of the Work O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 065 dtd 16-07-2016 you have short supplied supervisors and security personnel on almost every day in the month of August 2018. It is noted that there is short-supply of total 54-mandays of supervisor category personnel and 465-mandays of security personnel during the month of August 2018. We find that while executing the Contract No. HQ/BDC DISP/SECURITY/2016-065 dtd 16-07-2016 you have short supplied supervisors and security personnel on almost every day in the month of September 2018. It is noted that there is short-supply of total 65-mandays of supervisor category personnel and 462-mandays of security personnel during the month of September 2018. Kindly explain why Clause 25(a) of special terms and conditions mentioned in NIT HEC/TA Divn/Security/2016/01 dtd 05-06-2016 should not be invoked and corresponding recoveries should not be resorted to. Kindly send your reply within 3 days. We will complete the processing of your aforesaid claim bills, even if you do not reciprocate. Thanking you, Yours truly, Ramjee DGM/TA Div Rev Sec 14. The above letter indicate that there was short supply of security personnel in the month of August, 2018 and Sep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 65 dtd 16-07-2016 for providing Round the Clock Security Arrangement of Three Plants of HEC Ltd Ranchi-834004 Dear Sir, With reference to the above all, we convey that your claim bill amount to Rs.3,257,057/- (refer your tax invoice dtd 31-01-2019- received on 14-02-2019) has been examined. You have claimed Rs. 27,60,217/- against your performance made in December 2018. The excess attendance shown in the bill has been corrected and accordingly your claimed amount got reduced by an amount of Rs.91,086/- to Rs.26,69,131/-. After paying GST amounting to Rs.4,80,444/- to you, the final amount is Rs.31,49,575/-. From the said amount, Rs.2,66,913/- has been posted to your security deposit and payable amount is Rs.28,82,662/-. We find that while executing the Contract dated 16-07-2016 you have short supplied supervisors and security personnel in the month of December 2018 by 27-mandays of supervisor category personnel and 533-mandays of unarmed security personnel. This attracts application of Clause No.-25(a) of special terms and conditions mentioned in NIT HEC/TA Divn/Security/2016/01 dtd 05-06-2016 resulting into corresponding recoveries from your payment. Also, the enh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame to an end and issues were resolved on the date when demand notice was issued. Reliance is placed by the Appellant on the Minutes of Meetings dated 07.06.2019 which minutes have been brought on record at Annexure A-14, which minutes are claimed to be sent by the Appellant to the Respondent by email dated 10.06.2019, which are as follows:- 3. For remaining outstanding, respected CMD Sir has given instruction to Mr. Ramjee to do a thorough reconciliation with G4S representatives to derive at actual payout based on his working observation. 20. Perusal of the minutes indicate that Minutes of the Meeting were not signed by any of the official of the Corporate Debtor. Although presence of CMD, DGM of the Corporate Debtor is noticed in the minutes. A bare perusal of the Minutes of meeting indicate that the minutes are the minutes which are prepared by the Appellant. At Point No.1 it is mentioned: There was some disputes raised by Mr. Ramjee against duty deployment numbers. The same has been explained to him in front of respected CMD Sir . 21. The issue pertaining to short supply of the Supervisors and Security Personnel was communicated in writing with details of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned that the recovery shall be effected at the end of the contract, there has to be reconciliation between the parties taking into account non-compliance of the Terms and Conditions by the Operational Creditor which each detail were communicated to the Appellant. Much reliance has been placed by the Appellant on the email dated 20.12.2019 which was sent by the Corporate Debtor to the Operational Creditor. It is necessary to notice the contents of email dated 20.12.2019, which is to the following effect:- Dear Sir, With reference to the above all, it is conveyed that both the contracts have got concluded on 31-03-2019. Your monthly claim bills against performance have been processed. Since there is an issue of releasing the final payment after observing the terms and conditions of contracts, as you know, we are at the verge of completing the exercise under intimation to our goodself. Therefore, we inform you that very shortly the aforesaid issues would be settled. In the meantime kindly have the readiness with all clearances to receive the payments. Hope, you will appreciate the gesture. Regards. 24. The above email clearly mention that there are issues reg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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