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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 ..... k Bhushan] Chairperson , [Barun Mitra] Member (Technical) And [Arun Baroka] Member (Technical) For the Appellant : Mr. Vivek Jain, Mr. Bhrigu Sharma and Mr. Rajat Jain, Advocates For the Respondent : Mr. Priyesh Kasliwal, Mr. Bipin Garg and Ms. Sangita Mishra, Advocates JUDGMENT ( Hybrid Mode ) [ Per : Arun Baroka, Member ( Technical ) ] Brief facts : The matter relates to an appeal filed under Section 61 of the Insolvency and Bankruptcy Code, 2016 ( Code ) against the impugned order dated 04.07.2023 passed by the National Company Law Tribunal, Jaipur Bench in Company Petition (IB) No. 14/9/JPR/2020, in which Adjudicating Authority has allowed Section 9 proceedings against M/s Macro Infra Contractors 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, Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t their existed a pre-existing dispute between the Appellant and OC/R2, as the later had failed to adhere to the instructions and terms outlined in the sub-contractor agreement. The Appellant claims that the Adjudicating Authority allowed the CIRP under Section 9 application despite pre-existing dispute with respect to the outstanding amount and quality of work rendered by Operational Creditor. 7. The Appellant has relied upon the Hon ble Supreme Court in Mobilox Innovation Pvt. Ltd. Vs. Kirusa Software Private Limited (2018) 1 SCC 353 at para 40 which is as under: .. 40. 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(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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due amount issued by the Contractor to the sub-contractor after the verification of work but the Corporate Debtor sturdily pleads that the Operational Creditor abandoned the work incomplete and did not complete the same and hence is not entitled to the said amount. 11. Further Appellant had given a notice dated 24.01.2020 for invoking Arbitration clause as the work was incomplete and a dispute arose between the parties. Case of the Operational Creditor M/s RG Colonizers Private Limited 12. OC/R2 / M/s RG Colonizers Private Limited submits that the Respondent is a sub-contractor and the Operational Creditor, he had executed an agreement on 17.01.2018 for the construction of residential complex in Village Siroli, Tehsil-Sanganer, Jaipur (Rajasthan). The OC/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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for the construction of work it took a heavy working capital loan in the hope that he will receive the payment from the Corporate Debtor on regular interval of time from the running bills. It submits that the work could not have been completed within 15 months as the appellant never released the payment on regular interval of time as stated in the conditions of the agreement. The project could not have completed from out-of-pocket expenses of the OC/R2 and also due to irregularity to issue drawings on the part of the Corporate Debtor. The Completion of project depends upon the realisation of money of the running bills but Corporate Debtor never paid attention to the same even though many emails and letters were sent to them. The Appellant has not paid single amount when the work 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stipulated timelines. However, they have not submitted any authentic communication to substantiate the same. Thus, as per the documents placed on record with the Adjudicating Authority, there is no dispute as to the outstanding liability of the Corporate Debtor towards the Operational Creditor 23. Furthermore, AA has concluded that there is no merit in the argument for any plausible dispute in the present matter; and therefore, it has come to a conclusion: . a) We have gone through the contents of the Applications filed in Form No.5 and found the same to be complete. As discussed above, there is a total unpaid operational debt (in default) of Rs.2,23,06,363/- (Rupees Two Crore Twenty-Lakh Six Thousand Three Hundred Sixty-Three Only). It is observed that the Operational Creditor has issued various invoices (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-existi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice of 4.11.2012 from the OC/R2. Later on, the Appellant invoked the arbitration clause on 24.01.2020, after the IBC proceedings which have been set into motion on 03.01.2020. It can be noted that the notice of dispute was sent by the Appellant to OC/R2 only on 24.01.2020 which appears to be an afterthought. And Appellant claims that even if there is absence of reply to Section 8 notice from the records available and pleadings, pre-existing dispute can still be established from the evidence available on record. In fact, most of the communications are from OC/R2 to the CD and later has not even been responding to most of the communications. Corporate Debtor has not replied to the demand notice sent by the Operational Creditor under Section 8 of the Code and there is no other record to show dispute except for an arbitration notice issued 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 canno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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