Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2018 (8) TMI Tri This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (8) TMI 1826 - Tri - Insolvency and BankruptcyCommencement of Corporate Insolvency Resolution Process - Operational Debt - Whether there is an Operational Debt, as defined in the Code exceeding ₹ 1, 00,000/-? - HELD THAT:- Those amounts relate to the work done by the Operational Creditor pursuant to the work orders dated 19.08.2009 and 30.07.2013. Therefore, the amount claimed has got all the characteristics of an Operational Debt as defined in the Code. Whether the Operational Debt is due and payable and has not been paid? - Whether there is existence of dispute between the Operational Creditor and Corporate Debtor and whether such dispute has been brought to the notice of the Operational Creditor by the Corporate Debtor by giving notice of dispute? - HELD THAT:- In the instant case, as per clause 2.5(D)b of the Work Order, dated 19.08.2009, if there is any delay attributable to the Operational Creditor, the Corporate Debtor can from time-to-time adjust the liquidated damages from the amounts payable to the Operational Creditor - In view of the said clause, if the delay in completion of work is on account of the Operational Creditor, then the Corporate Debtor is entitled for liquidated damages. That means, in case of breach of the terms of the Work Order/ Contract is there on the part of the Operational Creditor, the Corporate Debtor is entitled for liquidated damages. The claim for damages, whether liquidated or unliquidated there is no existing obligation to pay any amount. It is held in various decisions no pecuniary liability in regard to the claim for damages arises till the Court adjudicate upon the claim for damages and holds that the other party has committed breach and incurred liability to compensate the claimant for the loss and then access what the liability is. In the instant case, the Competent Court has to decide whether the party that committed breach of contract is liable to pay damages and if so, to what amount - In the instant case, as can been scene from the following correspondence, the Corporate Debtor has been raising the issue of delay in completion of works even prior to the issuance of Demand Notice. The following are the letters, addressed by the Corporate Debtor to the Operational Creditor, raising the issue of delay in completion of work. Admittedly, by both parties, there is delay in completion of work but one party is accusing the other party for the delays - Therefore, there is existence of a dispute between the Operational Creditor and the Corporate Debtor regarding the breach of terms of Contract and the damages. The controversy regarding the breach of terms of contract and the quantification of damages has to be decided by a Competent Civil Court - In the case on hand, there exists a dispute even before the issuance of demand notice and the said dispute has been brought to the notice of the Operational Creditor by the Corporate Debtor in the form of a reply notice. It is not a case whether a dispute has been raised for the first time in the reply notice dated 17.10.2017. The dispute raised is not a patently feeble legal argument or an assertion of fact unsupported by evidence. Application dismissed.
|