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2024 (4) TMI 970 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHIInitiation of CIRP - Maintainability of application filed u/s 9 of the Code - additional work got done, with the approval of MD of the Respondent, was not approved by the competent committee - Appellant has taken recourse to Arbitration under MSME Act - Respondent being a government company (PSU) is out of purview of the Code or not - debt of default was not correctly mentioned in the original petition - HELD THAT:- The Impugned Order records that the Respondent doubted existence of letter dated 02.12.2016 and 05.12.2016 as these were not available in the files of the Respondent. It is strange to note that the same Impugned Order, observed in Para 3(vii) of the Impugned Order, where it has been mentioned that the Respondent has stated that a letter dated 11.01.2017 was issued to the claimant intimating that vide earlier letter dated 02.12.2016 and 05.12.2016 the representative of claimant has already been informed that revised BOQ for Kopaganj Project and Ghosi Project has been approved along with terms and conditions as per agreement - Clearly, both the statement recorded in the Impugned Order as submitted by the Respondent are contradictory. The fact is that the Respondent has accepted and communicated to the Appellant regarding acceptance of the revised BOQ and the same should have been dealt with by the Adjudicating Authority suitably. We feel that it will be travesty of justice, if the claims of the Operational Creditor like the Appellant herein are refuted and denied by Public Sector Undertakings like Respondent herein in such casual, catastrophic and unfortunate manner. Afterall it is the faith on such PSUs, Operational Creditors like the Appellant here in start the execution of the work immediately, sometimes even without for formal contract, based on LOI. Hence, the ground of alleged lack of proper approval by the committee of the Respondent and therefore, the Respondent is not bound to make the payment is just not acceptable and stand rejected in the strongest terms. Pre-existing dispute - HELD THAT:- Without going into controversy of Arbitration Award under MSME Act, 2006 V/s the application filed under Section 9 of the Code, it is suffice to note that at the time of filing the application by the Appellant under Section 9 of the Code i.e., on 16.11.2019, there was no petition by the Appellant regarding any arbitration nor any award came in favour of the Appellant which was wrongly presumed to be pre-existing dispute by the Adjudicating Authority in the Impugned Order. On face of it, the assumptions and rational taken by the Adjudicating Authority in this regard on the aspect of pre-existing dispute it patently illegal and required to be treated accordingly. The Adjudicating Authority has jurisdiction to reject the application being incomplete but is also obligated that before such rejection has to give a notice to the Applicant to rectify the defects in his application within seven days of the date of receipt of such notice from the Adjudicating Authority - no notice seems to have been issued by the Adjudicating Authority to the Appellant. Once the date of the original application filed under Section 9 of the Code is treated as 26.11.2019, there is no question of any pre-existing dispute - the demand notice under Section 8 of the Code was issued on 03.09.2019 to the Respondent and no dispute was ever raised by the Respondent prior to issue of such demand notice. In fact, the Respondent chose not to reply to such demand notice. The impugned order is set aside - appeal allowed.
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