9911796707
TMI Blog2025 (3) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... RBI guidelines and C.A. guidelines. Besides not confirming the demurrage, the said letter also states that they would like to arrange meeting to discuss and try to resolve the issue. It cannot be unmindful of the fact that the Operational Creditor had been asked to provide documents and debit note as per RBI and other guidelines for the vessel/freight charges. That the issue of the debt was embroiled in dispute is also evident from the fact the Operational Creditor had themselves issued a Legal Notice 11.10.2022. Moreover, pursuant to the Legal Notice, replies were sent by the Corporate Debtor dated 17.10.2022 and 19.11.2022 wherein it has been asserted that the outstanding claimed by the Operational Creditor is not in their records. Further payment was stated to have been already done by Samruddha as freight negotiation and payment of the vessel were activities handled by Samruddha. This letter dated 19.11.2022 clearly mentioned that the matter of outstanding debt would be resolved with the help of Samruddha. It is pertinent to note that these letters addressed to the Operational Creditor by the Corporate Debtor were also endorsed to Samruddha and BST. Once plausibility of a pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h disputed operational debt, Section 9 proceeding under IBC cannot be initiated at the instance of the Operational Creditor - When Operational Creditor seeks to initiate insolvency process against a Corporate Debtor, it can only be done in clear cases where no real dispute exists between the two which is not so borne out given the facts of the present case. The conditions laid down in Section 9 having not been fulfilled, the application deserved to be rejected.
Conclusion - The Corporate Debtor was not liable for the claimed debt due to the existence of a dispute and lack of admission of liability. The Adjudicating Authority has erroneously allowed the application filed under Section 9 of the IBC by the Respondent.
The impugned order is set aside. The Appeal is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... losed due to Covid-19 and that the issue of payment would be taken up on re-opening of office. On 11.10.2022, the Operational Creditor sent a Legal Notice asking the Corporate Debtor to make good the payment of the outstanding dues. On 17.10.2022, the Corporate Debtor responded stating that they would need more time to ascertain the facts since their records were lying with Enforcement Directorate. Further it was contended that they had already made outstanding payment to Samruddha Resource Limited ("Samruddha" in short) and denied having any charter party with the Operational Creditor. The Operational Creditor denied these contentions of the Corporate Debtor in their communication dated 08.11.2022. On 19.11.2022, the Corporate Debtor sent another letter to the Operational Creditor stating that they were seeking information from Samruddha and that they would take more time for this purpose. Thereafter, the Operational Creditor served the Section 8 Demand Notice again on 25.02.2020 on the Corporate Debtor by e-mail on 19.12.2022 and hand delivery on 30.12.2022. On 10.01.2023, the Corporate Debtor responded to the Demand Notice raising their defence against the claim of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was also submitted that Section 9 application could not have been admitted on grounds of outstanding demurrage claimed by the Operational Creditor since demurrage are not operational debt in terms of Section 5(21) of IBC. It was also pointed out that the Section 9 application filed by the Operational Creditor was time-barred and therefore not maintainable. It was submitted that the invoice dated 18.04.2017 basis which the Operational Creditor has claimed debt and default as well as the debit note dated 27.12.2017 were time-barred. It was pointed out that even after considering the suo moto extension of limitation in terms of the orders of the Hon'ble Supreme Court, the alleged claim should have been filed on or before 30.05.2022. However, the Section 9 petition having been filed on 08.03.2023, the claim stood time-barred. 5. Refuting the submissions made by the Appellant, Shri Krishnendu Datta, Ld. Sr. Counsel for the Respondent-Operational Creditor submitted that the impugned order was well reasoned and that the Corporate Debtor has failed to make out any cogent grounds for setting aside of the impugned order. It was contended that the Corporate Debtor had carried its cargo on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Corporate Debtor cannot deny that demurrage was not payable by them. The Corporate Debtor also failed to produce on record valid proof of payment of the balance freight and demurrage which was due to the Operational Creditor under invoice dated 18.04.2017 and debit note dated 27.12.2017. Hence, the Adjudicating Authority had rightly held that freight and demurrage charges were payable by the Corporate Debtor and the same not having been paid, default had arisen thus attracting Section 9. 6. On the point of limitation, it was pointed out that the debt of outstanding freight and demurrage charges having been admitted and acknowledgment given in writing by the Corporate Debtor in their reply dated 09.03.2020 to the Section 8 Demand Notice amounted to acknowledgment of debt. Since the Corporate Debtor had acknowledged their liability in their letter dated 09.03.2020 this constituted an acknowledgement of liability on the part of the Appellant under Section 18 of the Limitation Act. This letter was prior to the expiry of limitation period of three years calculated from the date of part payment done on 04.08.2017. In support of their contention, the Ld. Sr. Counsel for the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s an undisputed fact that the demand notice was issued by the Operational Creditor on 25.02.2020 and notice of dispute was raised by the Corporate Debtor on 09.03.2020. 11. 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 Section 8(2), he may file an Application under Section 9(1) of the IBC. 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. 12. In arriving at our analysis and findings, we would like to bear in mind the guiding principles laid down by the Hon'ble Supreme Court in Mobilox Innovations Private Limited v. Kirusa Software Private Limited in Civil Appeal No. 9405 of 2017. It is relevant to refer to paras 33, 51 and 56 of the said judgment which are extracted as hereunder: "33............W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant 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." 13. Having noted the relevant statutory construct of IBC and the guiding principles laid down by Mobilox supra, we now proceed to see from the facts of the present case whether the debt claimed by the Operational Creditor qua the Corporate Debtor was due and payable and whether the purported debt had been undisputedly admitted by the Corporate Debtor. 14. Coming to the question whether operational debt stood established by the Operational Creditor and whether a default thereto had been committed by the Corporate Debtor, it is the case of the Appellant that the entire transaction was facilitated by Globe Chart and negotiated by Samruddha. As per the business arrangement, the Operational Creditor received business from S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent had admitted the freight charges and that "partial payment" on freight has also been admitted which therefore showed that the Corporate Debtor was liable to pay outstanding freight charges. 16. When we peruse the material on record, we notice that the Corporate Debtor has contended that no dues were payable by them qua the total invoice value of the Operational Creditor of USD 653,312. The details of the payments made by the Corporate Debtor as per their claims is captured in the table below for easy referencing: Date Particulars Amount (USD) 03.08.2017 Page 223 of APB Debit Note issued by Corporate Debtor to Operational Creditor. 3,50,000 25.05.2017 Page 225 of APB Credit Note issued by Corporate Debtor while receiving payment from BST. 44,568.05 03.08.2017 Page 227 of APB Credit Note issued by Corporate Debtor. 1,22,446 24.06.2019 Page 230 of APB Debit Note issued by Samruddha to the Corporate Debtor. 1,36,298.41 Total 6,53,312.46 On the Debit Note of 03.08.2017 of 3,50,000 and Credit Note of USD 1,22,446, there is no dispute between the parties. For the remaining two Credit and Debit notes, the two parties are however found to be at var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prior intimation for pending dues. Vessel freight is payable by us & we have paid the partial amount, for balance amount, you have to raise a debit note, as per RBI guidelines. We require the payment debit note as per shipping bill, which is accepted by our C.A. under the section 15CB. The bank requires the charter accountant certificates. Requesting you to please send the proper debit note as per shipping bill. We and Broker have not confirmed the demurrage. In this regard, please arrange meeting & settle the issue. Notice should be sent only after dispute arise in the meeting, but the sending demand notice to us is utterly disappointing act from your end. A well establish party doing business & paying the freight & other charges regularly still you send demand notice is not correct. The disputed matter cannot be challenged under Rules of 5 of Insolvency & the Bankruptcy (Application Adjudicating Rule 16). We are not interested to raise dispute, but the demand should be submitted to us at the time of shipment effected & time limit should be indicated. Your demand for the freight Invoice sent late, which we cannot discuss, but you should know your accountability. In limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve you the fact situation which is available with us. For RR METALMAKERS INDIA LTD. (Emphasis placed) 20. This brings us to another letter dated 19.11.2022 sent by the Corporate Debtor to the Operational Creditor which is as extracted below: To, Date: 19/11/2022 Mr. Ashwin Shanker Advocate & Arbitrator, Sub : Reply against E-Mail Dated: 11/11/2022 Dear Sir, With reference to the above, we have received your email, In this regard, we hereby inform you that we have already applied to collect the documents from ED department (Enforcement Directorate) but our statement is not completed with the department because the material which has been purchase through packing credit disbursement and payment directly released to Samruddha Resources Ltd but export is not executed. The matters is under investigation with the bank and department personally visit at mines to check the stock position. We are very much busy & try to settle this matter at our end. So please give us some time as our computer hard disk and documents are with the departments therefore we cannot reply for your letter. We request you please give us the details if you are having the documents of this tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Notice, replies were sent by the Corporate Debtor dated 17.10.2022 and 19.11.2022 wherein it has been asserted that the outstanding claimed by the Operational Creditor is not in their records. Further payment was stated to have been already done by Samruddha as freight negotiation and payment of the vessel were activities handled by Samruddha. This letter dated 19.11.2022 clearly mentioned that the matter of outstanding debt would be resolved with the help of Samruddha. It is pertinent to note that these letters addressed to the Operational Creditor by the Corporate Debtor were also endorsed to Samruddha and BST. 22. We also find that the Corporate Debtor has categorically disputed on 10.01.2023 the outstanding debt and liability in their reply to the Demand Notice which had been resent on 30.12.2022. This notice of dispute is placed at page 186-188 of APB and the relevant extracts are as placed below: "2. At the outset the company disputes and denies the alleged claims and contentions contained in the Demand Notice. Without prejudice to the contention of the company that it is not liable to pay any amount to you, the alleged claim under the Demand Notice is hopelessly time b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chart and BST. We also understand that you have running account with Samruddha. You are also aware that the material exported from India was as per Samruddha's instructions. Further, BST was releasing freight to Globe Chart and in turn Globe Chart was paying you. The entire transaction was negotiated by you with Samruddha and BST and we were not in concerned with the same. 10. The Demand Notice is premeditated with a view to now foist the purported claim on the company. The company is not going into the specifics and details of your dubious claims under the Demand Notice as the same is time barred. We reserve our rights to place the aforesaid facts and documents in support thereof before the Hon'ble NCLT in the event of you proceeding against the company. 11. We once again dispute and denies that the company is liable for the alleged claim under the Demand Notice. The company has responded to the Demand Notice in the past also and there is pre-existing dispute between the parties. Admittedly, from the correspondence exchanged between the parties, it is evident that there is pre-existing dispute between the parties and the Demand Notice is devoid of merits." ( Emphasi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y demurrage. When the Corporate Debtor had themselves admitted taken credit of the demurrage receivable, it did not lie in their mouth to submit that demurrage was not payable on their part to the Operational Creditor. Furthermore, on 11.10.2017, the Corporate Debtor had confirmed the lay time calculations provided by the Operational Creditor. It was asserted that the Corporate Debtor was liable to pay the outstanding debt of the Operational Creditor towards demurrage under debit note dated 27.12.2017 after adjusting Address Commission earned by them. 26. Given this backdrop, it will be useful to find out how the Adjudicating Authority has considered the spectrum of facts relating to payment of demurrage. We find from the impugned order that the Adjudicating Authority noted that on 25.05.2017, the Corporate Debtor had raised an invoice for USD 22,942.74 towards Address Commission earned and that the Operational Creditor had also raised a Debit Note on 27.12.2017 for USD 242,772.19 towards demurrage dues. It was also noted by the Adjudicating Authority that the laytime calculations in support of their demurrage dues were confirmed by the broker of the Corporate Debtor vide email da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Globe Chart. We understand that you have received the payment in respect of the alleged claim from Globe Chart for US$145388 on 03/08/2017. 5. In relation to the same Samruddha have confirmed that Bothra Shipping Services Pvt. Ltd. ("Bothra") have paid US$107604.01 & US$28694.40 to you. Apart from the above we have remitted US$3,50,000 on dated: 03/08/2017 to you and you have given us credit for US$ 21625.31, dated:18/04/2017 against their bills. 6. In the circumstances aforesaid nothing is due and payable by us to you in relation to your alleged time barred claim. We state that the alleged claim contained in the Demand Notice is frivolous claim and the same is being foisted on the company despite knowing that the fact that in the entire transaction several parties were involved. Admittedly, the entire transaction was facilitated by Globe Chart. However, the Demand Notice does not contain a single reference to the same and this shows your dishonesty and falsity. 9. You are aware that Samruddha had arrangement with BST and Globe Chart and you. You received the business from them and business of export is running business. Apart from the above, your payment was always paid b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter to settle the issue. 32. In a Section 9 petition, the Corporate Debtor enjoys the right to dispute the debt including the quantum of payment. From the correspondence placed on record it is clear that dispute was continuing between the parties regarding outstanding claim both in respect of freight and demurrage. Once the debt has been disputed, the question of default does not arise. For such disputed operational debt, Section 9 proceeding under IBC cannot be initiated at the instance of the Operational Creditor. In terms of the objectives of the IBC and settled proposition of law as expressed and explained time and again by the Hon'ble Supreme Court, the provisions of IBC cannot be turned into a debt recovery proceeding as it is a beneficial legislation which envisions the revival of the Corporate Debtor and bringing it back on its feet from the perils of extinction. When Operational Creditor seeks to initiate insolvency process against a Corporate Debtor, it can only be done in clear cases where no real dispute exists between the two which is not so borne out given the facts of the present case. The conditions laid down in Section 9 having not been fulfilled, the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
