TMI Blog2017 (9) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... aintain the said applications. On the above basis, it is clear that the application filed by the Operational Creditor for initiation of Corporate Insolvency process deserves to be dismissed as non-maintainable. - C.P. (IB) NO. 250(KB) of 2017 - - - Dated:- 9-8-2017 - MR. V.P. SINGH, JJ. For The Petitioners : Mr. Ratnako Banerjee, Sr. Advocate, Mr. Anirban Ray, Advocate, Mr. Shaunak Mitra, ADvocate, V.V.V. Sastry and Deepabali Datta For The Respondent : Jishnu Saha, Sr. Advocate Sarathi Dasgupta Sr. Advocate and Arin Sarkar Advocate ORDER The present application has been filed by the Operational Creditor, M/s. DBM Geotechnics and Construction Private Limited under section 9 of the Insolvency and Bankruptcy Code 2016 claiming an amount of ₹ 77,96,40,215/-. The applicant before instituting the present proceeding has complied with the statutory requirements of Insolvency Bankruptcy Code, 2016 (hereinafter, in short, will be referred to as the I B Code) by issuing a demand notice dated 17th April, 2017 in terms of section 8(1) of I. B. Code to the Corporate Debtor. The said notice is annexed from page 866 to 884, which has been duly received by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rather taken aback to receive a demand notice dated 17th April, 2017 from the applicant purportedly issued under section 7 of the Code. The Corporate Debtor has claimed that the petition has been filed after suppressing material facts. The facts referred to in the petition shows the complicated nature of disputes between the parties herein and as such disputed question cannot be gone into exercise of the summary jurisdiction under section 9 of the Code. The applicant has undertaken to execute the project on turn-key and/are Build Own Operate basis. The applicant was well aware that the very nature of the project is such that unless previous project is complete in all respects, the contemplated subsequent phase cannot be even gone into. The applicant was also aware that payment against the said work contemplated completion thereof. In other words, the works is not complete in all aspects, the partial work done is also of no use and purpose. The running account bills to the extent of work done by the applicant and any payment made against the same does not as such entitle the applicant to full payment against the same, unless and until the engineer certificates, completion of such w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r alia, with regard to withholding of the running account bills, retention monies and with regard to bank guarantee, is also evident from the said notice under section 21 of the Arbitration Conciliation Act, 1996 and the said application under section 9 of the said Act of 1996 has been filed by the applicant. Inasmuch as section 8(2)(a) of the Code is ultimately concerned with existence of a dispute with regard to alleged operational debt, which dispute has been raised by the applicant itself in its said notice under section 21 and in its application filed under sections 9 and 11 of the Arbitration Conciliation Act, 1996. The applicant cannot claim that there was no existence of dispute before he has sent the notice under the Code. The Financial Creditor's contention that dispute can only be raised by replying to the demand notice within 10 days of the notice of the same is clearly as hyper-technical construction of the said section. If a person receives a notice under section 8(1) of the Code and he commits default in making reply within 10 days of the receipt of the notice, then only on this ground, petition moved under section 9 of the I.B. Code cannot be admitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Operational Creditor has given the details of claim in Part-IV of the application in form 5 which contains the details of operational debt which are as follows: i. ₹ 6,01,30,082/- being the amount of idling of plants, machineries and equipment; ii. ₹ 54,94,992/- being the amount payable for damage to the plants, machineries and equipment; iii. ₹ 30,80,000/- the amount of financial losses incurred for site establishment, including monies required for the maintenance of the site; iv. ₹ 8,87,49,764/- for procurement of materials, use and incorporation of works under project, which were utilised by third party agency; v. ₹ 1,41,07,488/- for the losses suffered due to deploying manpower, labour, supervisors, Project Managers etc. vi. ₹ 79,05,070/- for considerable damage/destruction machineries, equipment, materials due to Cyclone Phalin; vii. ₹ 17,59,099/- for the legal expenses in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I.B. Code has been verified by Mr. Satish Tiwari, as Vice President of DBM Geotechnics and Constructions Private Ltd. The petitioner has annexed the copy of the Board Resolution authorising Mr. Satish Tiwari to sign and execute the document, which is at page 889. On perusal of the authorisation letter, it appears that the Board of Directors by its Resolution dated 1st September, 2016 has authorised Mr. Satish Tiwari to sign the petition, all relevant petitions, applications, affidavits, reply, memos of appeal, review, revision and verification arising therefrom and to appoint and engage Advocates by signing the Vakalatnama on behalf of M/s. DBM Geotechnics Constructions Pvt. Ltd. On the basis of the above-mentioned authorisation, it is clear that Mr. Satish Tiwari was not specifically authorised by M/s. DBM Geotechnics Constructions Pvt. Ltd. for initiating the Corporate Insolvency Resolution Process and in the light of our earlier decision in ICICI Bank Ltd.'s case (supra), it has been held that for initiating the Corporate Insolvency Resolution Process, there should be specific authorisation for presenting the petition. In this case, Shri Satish Tiwari was not specifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 and in its application filed under sections 9 and 11 of the Arbitration Conciliation Act, 1996. Therefore, the applicant clearly could not have filed and consequently cannot maintain the said applications. In case of P.K. Ores (P.) Ltd. v. Tractors India (P.) Ltd. [Company Appeal (AT) (Insolvency) No. 56 of 2017 on 1st June, 2017], the Hon'ble NCLAT has held that the demand notice was not replied to, upon taking note of the disputes raised prior thereto. Even then, the Hon'ble NCLAT set aside the order admitting the petition. In the above- mentioned case, the Hon'ble NCLAT has observed that once the dispute (on matters relating to 3 classes in sub-section (6) of section 5 of the I.B. Code is pending for adjudication, that in itself would bring it within the ambit of sub- section (6) of section 5 of the I.B. Code. It is thus clear that only on the basis of not making reply against the demand notice issued by the Operational Creditor will not itself be a ground for admission of Insolvency petition without satisfying the other requirement of sections 8 and 9 of the I.B. Code. The said judgement also took note of the judgement delivered in the case of Kirusa Softw ..... X X X X Extracts X X X X X X X X Extracts X X X X
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