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TMI Blog2024 (1) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... ctors Private Limited. 2. Heard Learned Counsel for both the parties and perused the record. Case of the Appellant Mr Ashok Singh - Suspended Director of the CD 3. Appellant - Ashok Singh, is the Suspended Director of the Corporate Debtor namely, M/s Macro Infra Contractors Private Limited (Corporate Debtor- CD). The Corporate Debtor is primarily engaged in the business of the development of residential real estate in and around Jaipur, Rajasthan. On the petition of Respondent No.2 / M/s RG Colonizers /operational Creditor -OC, the Adjudicating Authority allowed Petition against the Corporate Debtor under Section 9 of the Code and it being represented through its Resolution Professional-RP, R1, herein. OC was given a project by the Corporate Debtor for construction of a complex, which was to be done within 15 months, the date of completion of the work was April, 2019. The Appellant claims that OC/R2 failed to carry out the said work within the stipulated time as per sub-contractor agreement, the payment was to be made to the OC/R2 on the basis of the actual measurement of work done, on presenting the certificate of due amount issued by the Corporate Debtor to the OC/R2, after ver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 9(5)(2)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the "existence" of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. 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 Company Appeal (AT) (Insolvency) No. 933 of 2023 5 of 14 illusory, the adjudicating authority has to reject the application..." 8. The Appellant claims that there is a pre-existing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /R2 claims that there were no pre-existing disputes prevailing between the Appellant and the Respondent as no documentary evidence for the same has been produced by the Appellant. There is no iota of communication, ever made by the Appellant for any dispute to the Respondent. Further, Appellant had never replied to the demand notice dated 04.11.2019; in fact the Appellant had not the replied to the application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 ("IBC"). 13. OC/R2 relies upon this Tribunal's judgment which in the matter of GupShup Technology India (P) Ltd. Vs. Interpid Online Retail (P) Ltd. decided on 25.07.2019, reported in (2019) 110 taxman.com 221 in which it has been held that where corporate debtor failed to produce any letter or email to suggest that prior to issuance of demand notice, a dispute was raised about SMS services provided by operational creditor; it could be said that there was no pre-existing dispute. Thus, in the present case no such documentary evidence is there which reflects the pre-existence of disputes. 14. OC/R2 relies on the judgment of Hon'ble Apex Court in the case of Innoventive Industries Ltd. Vs. ICICI Bank Ltd. (2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... started and also not even started the work with any other sub-contractor and sold the land as mentioned in the appeal. 18. The OC/R2 submits that there was no communication regarding disputes in the bills and in the invoices of the respondents. 19. OC/R2 further submits that the arbitration notice dated 24.01.2020 is purely afterthought, futile exercise and is issued after filing of the IBC Petition dated 03.01.2020 and after issuance of the demand notice dated 04.11.2019 just to safeguard from the IBC process. 20. OC/R2 submits that all the requisite conditions of no pre-existing dispute, acknowledgement of debt by appellant in the balance sheet, establishment of debt, occurrence of default has occurred and claim is within limitation. Therefore, Section 9 proceedings are very much in place and the present appeal is required to be rejected. Findings of the AA 21. The Adjudicating Authority in its order dated 04.07.2023 has concluded as follows: ".. i) The registered office of the Corporate Debtor is situated in Jaipur, Rajasthan, therefore this Adjudicating Authority has jurisdiction to entertain and try this Application. Further, the Applicant has alleged that the debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voices (Pages No. 16-87 of the petition) for services supplied to the Respondent Corporate Debtor. Applicant Operational Creditor has given Demand Notice in Form No.3 dated 04.11.2019, duly served on the Respondent Corporate Debtor. This Adjudicating Authority has held above the Operational Creditor correctly delivered the Demand Notice in Form No.3, and no pre-existing dispute is proved. b) It has been shown that the Corporate Debtor has failed to make payment of the aforesaid amount due as mentioned in the statutory notice to date. It is also observed that the conditions under Section 9 of the IBC stand satisfied. Hence, this Adjudicating Authority is inclined to commence CIRP against the Corporate Debtor as envisaged under the provisions of IBC...." Findings and Conclusions 24. With respect to the existence of the Operational Debt, the matter has been examined in detail by the Adjudicating Authority and it has examined various invoices in para 4 of the Impugned Order and basis that Operational Debt of Rs.2,23,06,363/- has been arrived at as is reflected in the demand notice. The Appellant has not paid for these invoices and had not raised any issue with respect to these i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued on 24.01.2020, which is not a pre-existing dispute. There appears to be nothing on record to prima-facie demonstrate that the respondent had raised the issue of dispute which could have prevented the triggering of the CIRP. The pre-existing dispute appears to have made as a design to defeat the CIRP proceedings. Therefore, pre-existing dispute cannot be established and Mobilox Innovations Private Limited (supra) will not support Appellant's case. 27. Appellant has not been replying to all communications and very belatedly raised the issue that the work has not been done as per the subcontractor agreement and the issue of 18% interest rate, which was never agreed between the parties, and therefore, an arbitrary percentage. It also raises an issue of a dispute as per notice of dispute dated 24.10.2020. There is no specific answer to the issue of the invoices and its non-payment. 28. It appears that invoices were raised by the Respondent No.2 and same were verified and confirmed by the technical person. Even though, the Appellant was to make payment of GST, to avoid any notices from the GST Department, Respondent No.2 paid the GST on the work, even though the due amount was to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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