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TMI Blog2023 (12) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... P" in short) against the Corporate Debtor-M/s R P Infraventure Pvt. Ltd. Aggrieved by the impugned order, the present appeal has been filed by the Appellant. 2. The Learned Counsel for the Appellant/Operational Creditor submitted that the Agra Development Authority had awarded a contract to HG Infra Engineering Private Limited as the main contractor which in turn further awarded a sub-contract to the Corporate Debtor-M/s R P Infraventure Pvt. Ltd., which is the present Respondent. For further execution of the said sub-contract, the Corporate Debtor had engaged R S Infra, the present Operational Creditor for the purpose of excavation, loading, transportation, unloading of soil and issued a work order dated 01.08.2014. The work assigned to it by the Corporate Debtor had been completed and no objections on the quality of services rendered was raised by the Corporate Debtor. Payments were made by the Corporate Debtor to the Operational Creditor by way of running account. The Appellant has claimed that the Corporate Debtor had stopped making payments after 18.04.2018. Since an outstanding amount of Rs.1.58 crore had become due from the Corporate Debtor, the latter was requested to disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck glance at the relevant statutory construct of IBC would be useful. Section 8 of the IBC requires the Operational Creditor, on occurrence of a default by the Corporate Debtor, to deliver a Demand Notice in respect of the outstanding Operational Debt. Section 8(2) lays down that the Corporate Debtor within a period of 10 days of the receipt of the Demand Notice would have to bring to the notice of the Operational Creditor, the existence of dispute, if any. From a plain reading of the above provisions, it is clear that the existence of dispute and its communication to the Operational Creditor is therefore statutorily provided for in Section 8. Post issue of demand notice by the Operational Creditor, if the Operational Creditor does not receive payment from the Corporate Debtor or notice of the dispute, he may file an Application under Section 9(1) of the Code. 8. In the present case, Section 8 demand notice was admittedly issued on 30.07.2020 which however the Corporate Debtor did not reply to. It is also an undisputed fact that in the present matter, the Operational Creditor did not receive any payment from the Corporate Debtor after the issue of demand notice, and, thereafter pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent application. Accordingly, the present application is rejected." 10. It is the case of the Appellant/Operational Creditor that the work assigned to it by the Corporate Debtor had been completed without any complaints from the Corporate Debtor and payments released till 18.04.2018. Thereafter an outstanding amount of Rs.1.58 crore had become due from the Corporate Debtor which remained unpaid. It is also the contention of the Appellant that the Corporate Debtor had deducted TDS which is an acknowledgment of the debt on the part of the Corporate Debtor. No dispute was ever raised by the Corporate Debtor with regard to their performance of work in spite of receiving a notice under Section 8 of the IBC. 11. Making rival submissions it has been the contention of the Respondent that no payment was due and payable by the Corporate Debtor. It was pointed out that payments to the Operational Creditor was guided in terms of the Work Order Agreement signed between the Corporate Debtor and the Operational Creditor on 01.08.2014 and no due had arisen in terms of Clause 17 of the Agreement. It is also pointed out that the Operational Creditor has included security amount while claiming ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and pays the corresponding claims of the Company. Notwithstanding any other provision contained herein to the contrary or otherwise, the PRW shall not be paid any idling charges whatsoever under whatever nomenclature called. Should the Client cancel the Company's Contract in whole or in part for any reason whatsoever, the Company shall have the right likewise to cancel this Work Order and shall only pay the PRW for the actual work done up to the date of cancellation and no compensation whatsoever shall be payable to the PRW in respect of the cancelled portion of this Work Order." 13. A plain reading of the Clause 17 clearly shows that in terms of Clause 17 of the Agreement, payment was to be made to the Operational Creditor only after corresponding payment was received by the Corporate Debtor from HG Infra. There is nothing shown by the Operational Creditor to substantiate that payments had been received by the Corporate Debtor and had therefore become due for payment to them. Further, the Operational Creditor was required to raise a notice for claims within 14 days of the date of occurrence of event and since no such notice had been raised, it is clear that no payment was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy of arbitration proceedings was between the Agra Development Authority and the HG Infra. It does not establish that the pending litigation had any direct correlation with the quality of work done by the Operational Creditor. Further at no point of time, either prior to or after the issue of demand notice, the Corporate Debtor had ever informed the Operational Creditor about the pendency of such litigation or the quality of work done by them. In support of their contention, reliance has been placed on the decision of this Tribunal in the matter of Aroon Kumar Aggarwal v. M/s ABC Consultants Pvt. Ltd. in CA (AT) (Ins.) No.409 of 2020 wherein it has been held that when the plea of pre-existing dispute is raised in the background of a pending suit or arbitration proceeding, the same should be related to the dispute. 16. On perusal of records, we find that the WhatsApp message of 20.07.2020 relating to debit notes from the Corporate Debtor to the Operational Creditor has been placed at page 133 of APB. That this message was received by them from the Corporate Debtor has not been controverted by the Operational Creditor. Further at page 134 of APB, we find that the Operational Credito ..... X X X X Extracts X X X X X X X X Extracts X X X X
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