9911796707
TMI Blog2024 (11) TMI 1288X X X X Extracts X X X X X X X X Extracts X X X X ..... micably settled - merely because a meeting was held between the two parties to overcome the shortcomings in the meeting the obligations of supply and installation of pump-sets cannot be taken to imply that all disputes between the parties had subsided without the parties being at ad idem on whether the obligations stood discharged on a mutually satisfactory basis. The Adjudicating Authority has concluded at paragraph 7 of the impugned order that the dispute which existed between the Operational Creditor and the Corporate Debtor prior to the demand notice about the quality of the pump sets supplied requires detailed inquiry and investigation by the proper forum and that the Adjudicating Authority is not that forum - the Adjudicating Authority did not commit any error in returning this finding keeping in mind that IBC bestows only summary jurisdiction upon the Adjudicating Authority. Once plausibility of a pre-existing dispute is noticed, it is not required of the Adjudicating Authority to make further detailed investigation. What has to be looked into is whether the defence raises a dispute which needs further adjudication by a competent court. It is well settled that in a Section 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sets at various locations within the State. Towards executing the contract, the Corporate Debtor placed purchase orders of pump-sets on the Operational Creditor-M/s Kashyap Infraprojects Private Limited. The Operational Creditor had supplied the pump-sets and raised invoices on the Corporate Debtor. The invoices/bills raised on the Corporate Debtor having remained unpaid, the Operational Creditor allegedly reminded the Corporate Debtor on several occasions for payment. Since no payments were received, the Operational Creditor sent statutory demand notice under Section 8 of the IBC on 01.09.2020 to the Corporate Debtor. Since further payments were still not received by the Operational Creditor, Section 9 application was filed before the Adjudicating Authority on 30.09.2020 which was dismissed by the Adjudicating Authority on 02.11.2022. Assailing the impugned order, the present appeal has been filed by the Operational Creditor. 3. Making his submissions, Shri Arunava Mukherjee, the Ld. Counsel for the Appellant stated that the Operational Creditor had been supplying the goods and services to the Corporate Debtor on a regular basis and that pumpsets and related accessories were suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Corporate Debtor a contract for design, construction, supply, testing and commissioning of 211 mini piped water supply schemes and provisioning of solar power pumps in various districts of Bihar and for this purpose, they had entered into a business relationship with the Operational Creditor for supply and installation of pump-sets. However, the Operational Creditor supplied the said pump-sets after protracted delay besides supplying defective pump-sets of sub-standard quality. It was contended that these defects were communicated from time to time via WhatsApp messages and emails to the Appellant and that these WhatsApp messages appear at pages 49-110 in their Reply- affidavit before this Tribunal which fact had also been brought to the attention of Adjudicating Authority. Besides the WhatsApp messages, it was also categorically informed to the Operational Creditor vide email dated 07.01.2020 that the solar pumpsystems supplied by them were not working and were asked to take necessary corrective action. However, the Operational Creditor failed to redress the defects which in turn led to a backlash from the Government of Bihar leading to termination of the contract and blackl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Creditor is therefore statutorily provided for in Section 8. In the present case, it is an undisputed fact that the demand notice was issued by the Operational Creditor on 01.09.2020 and notice of dispute was raised by the Corporate Debtor on 18.09.2020, marginally beyond the prescribed period of ten days. 9. Now coming to Section 9 of IBC, sub-section (1) thereof provides that if the Operational Creditor does not receive payment from the Corporate Debtor or notice of the dispute under Sub-section (2) of Section 8, he may file an Application under Section 9(1) of the Code. It remains an undisputed fact that the Operational Creditor did not receive any payment from the Corporate Debtor and chose to file an application under Section 9 of IBC. However, Section 9(5)(ii) envisages that if a notice of dispute is received by the Operational Creditor or there is a record of dispute in the Information Utility, the application is liable to be rejected by the Adjudicating Authority. 10. Given this background of relevant statutory construct of IBC, we now proceed to see from the facts of the present case whether any notice of existence of dispute had been raised and, if so, whether there w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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. ****** ***** ***** 56. Going by the aforesaid test of existence of a dispute , it is clear that without going into the merits of the dispute, the appellant has raised a plausible contention requiring further investigation which is not a patently feeble legal argument or an assertion of facts unsupported by evidence. The defense is not spurious, mere bluster, plainly frivolous or vexatious. A dispute does truly exist in fact between the parties, which may or may not ultimately succeed, and the Appellate Tribunal was wholly incorrect in characterizing the defense as vague, got-up and motivated to evade liability. 12. It is the case of the Respondent that the payments were not due as the Appellant had not been able to supply and install the pump-sets within time period allowed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner, engineer in chief, executive engineer and other officers of division. When we go for billing they directly tell us to replace the system giving the above mentioned reason. Headquarter has released a guideline for all contractors that motor should run for 8 hours. As far we have observed lubi system performance hours and days are better than antras system. On days and condition when antras system do not give water, lubi system does. None of the lubi system has required any maintenance till date Antras system do not perform at all when issue of shadow is there but lubi system does Here are few sites are mentioning where antras system is placed and we are facing problem Second email Dear Hirenbhai, Kindly find herewith the attachment. 1. Villagers, mukhiyas and sarpanch have written letter to executive engg taking concerned DM and PHED commissioner in each our solar pump system is ineffective as compared to other company's system bcoz they r not able to deliver.- water up to 8 hrs in winters well as in very high temperatures of summer ... due to which they are not ready to bill our sites .. Engineer in chief has reciprocated the same views... 2. Many motor used to become in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted out that the supply of goods was duly certified by a third-party inspection report which have been placed on record. 18. We have looked into the third-party inspection reports which have been placed at Annexure A-12 at pages 158 -196 of Appeal Paper Book ( APB in short). On taking a close look, we notice that the third-party inspection reports were not carried out at the time of installation of the pump-sets but at the stage when the pump-sets were dispatched in boxed condition. The remark contained in these inspection report only mentions that inspected quantity is passed/clear for dispatch . Therefore, it becomes clear that these inspection reports were not given after installation and testing of the pump-sets in running condition. The inspection reports were therefore relevant only to verify the proof of physical dispatch of pump-sets but did not certify the actual functioning of pump sets after installation. Further, nomenclating this inspection report to be a third-party inspection unilaterally was also questioned by the Ld Counsel of the Respondent as there is no document on record which showed that the agency carrying out the said inspection or the modalities of inspecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and Control Panel replace in lot of 10 as per earlier Installed in Various Districts of Bihar. 2) Mr. Hiren Bhavsar agree to Replace all sites handover in Proper Working condition as per Tender Conditions they should satisfied Government authority of Concern District. 3) Mr. Vijay Shah agree to give Payment after government official Concern District release payment of Proper working Solar Pumping Systems 25% of District payment release. 4) Mr. Hiren Bhavsar agree to replace all installed I unused Pump and Control give in proper Working Condition and Hi Tech will release every lot payment receipt from Govt. Department Concern District and hold 20,000/- per Site of unuse Pump and Control. 5) It was admitted by Mr. Hiren Bhavsar that the case was done at the behest of Mehul (Duke Pump). ( Emphasis supplied ) 21. It is clear from the agreement arrived at the meeting held on 26.01.2021 that the Operational Creditor had agreed to replace the defective pump sets and meet the standards as per the tender conditions which is a clear admission on their part for having been unable to discharge their obligations up to the expectations of the tender specifications. The Appellant has however co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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