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2020 (12) TMI 325 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Default on the part of Corporate Debtor in making repayment of its dues - the Adjudicating Authority arrived at a conclusion that there was no debt as claimed by the Appellant besides there being deficiency in service provided by the Appellant warranting dismissal of application - HELD THAT:- It is futile on the part of the Corporate Debtor to raise the grievance that there was a dispute relating to the quality of service. No suit or arbitration proceedings were pending on the date of filing of application under Section 7 in regard to quality of service to bring the same within the ambit of dispute as contemplated under Section 5(6)(b) of the ‘I&B Code’ to disentitle the Appellant- Financial Creditor from initiating Corporate Insolvency Resolution Process. No such dispute was even brought to the notice of the Appellant- Financial Creditor as the demand notice served under Section 8(1) of the ‘I&B Code’ was not responded to by the Corporate Debtor. Therefore, we have no hesitation in holding that the Appellant- Financial Creditor was entitled to raise the invoice dated 20.04.2019 in regard to the unpaid balance amount of ₹ 2,05,00,000/- in respect whereof default was committed by the Corporate Debtor who admittedly paid only ₹ 75 Lakhs as part payment. There is nothing on the record to even suggest that the liability was at all denied by the Corporate Debtor and any agreement or settlement was reached inter se the parties for reduction of amount of fee payable in lieu of services provided for the reason that the timelines were not adhered to by the Appellant in arranging financer for the Corporate Debtor’s project. The Adjudicating Authority landed in error in observing that there was a clear deficiency in service provided by the Appellant falling within the ambit of Section 5(6)(b) of the ‘I&B Code’ which cannot be supported. The Adjudicating Authority has landed in error in holding that there was no ‘debt’ as claimed by the Appellant and there was ‘deficiency in service’ provided by the Appellant. The findings recorded by the Adjudicating Authority are grossly erroneous and same cannot be supported. Once the liability in respect of ₹ 75 lakh was admitted and the same was not discharged by the Corporate Debtor, dispute in regard to quantum of debt would be immaterial at the stage of admission of application under Section 7 unless the debt due and payable falls below the minimum threshold limit prescribed under law. The impugned order is liable to be set aside as the same is unsustainable. Petition allowed.
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