TMI Blog2017 (12) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... have filed the civil suit before the Hon’ble High Court to self-incriminate. Further, the learned senior counsel for the petitioner has stated that the Said civil suit has been filed just to save the limitation period for recovering monies from the respondent. This also reflects the bonafide on part of the petitioner. Thus, this Adjudicating authority is satisfied that the petitioner has made out his case by establishing that this Corporate Debtor has defaulted the payment dues on various occasions to this petitioner/OC and there is no dispute between the parties. In the circumstances, am inclined to admit the instant petition. The instant petition is admitted and order the commencement of the Corporate Insolvency Resolution Process which shall ordinarily get completed within 180 days, reckoning from the day of this order is passed. - TCP/4/(IB)/CB/2017 - - - Dated:- 12-10-2017 - MR. K. ANANTHA PADMANABHA SWAMY, J. For The Petitioner : Shankarnarayana, Sr. Adv., Shivakumar and Suresh, Advs. For The Respondent : P.H. Arvindh Pandian, Sr. Adv. ORDER Per : K. Anantha Padmanabha Swamy, Member (J) 1. - Under Consideration is a Company Petition filed by M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed that a sum of ₹ 699 lakhs was due and payable to the petitioner and provided the summary of reconciliation of accounts for the supply made by the petitioner to the respondent. It is submitted that, thereafter the respondent had failed to clear the said outstanding amount, which forced the petitioner to issue the statutory notice under the Companies Act, 1956 on 15.09.2016 calling upon the respondent to pay the outstanding amount of ₹ 7,88,54,073/- to the petitioner. In response to the same, the respondent had issued a vague reply notice dated 17.10.2016 denying its liability. Also, in the said reply notice, the respondent has not stated any existing dispute or any pendency of suit or arbitration proceedings. It is further submitted that in the said reply, the respondent raised the dispute only for the sake of dispute just to stall the winding up process at that point of time and the respondent has not raised any genuine dispute in relation to the said transaction. 6. It is submitted that these goods were supplied during the year 2012-13 and no disputes were raised in relation to the quality of the same. Even before this Adjudicating Authority, the respondent had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court of Delhi is not a bar to proceed under the IB Code, 2016 against the same respondent. The respondent has relied upon the judgment of the Hon ble NCLAT in case of Kirusa Software (P.) Ltd. v. Mobilox Innovations (P.) Ltd ., to show that the pendency of the civil suit filed by the petitioner before the Delhi High Court is an existence of dispute and the present petition is not maintainable. The meaning of existence of a dispute , if any, must be understood in the context of the dispute of I B Code 2016 must relate to satisfy nature of Clause (a), (b) or (c) of Sub-section (6) of Section 5 (i.e.) existence of amount of debt or quality of goods or services or breach of representation or warranty. Such suit or arbitration proceedings should have been initiated against Operational Creditor by the Corporate Debtor in relation to the dispute raised by the Corporate Debtor prior to the receipt of Section 8 Notice. 10. Shri P.H. Arvindh Pandian, the learned senior counsel appearing on behalf of the Respondent/CD submitted that the instant petition is false, vexatious and not sustainable both in eyes of law or on facts. It is submitted that the instant petition under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication under Section 9(5)(2)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the existence of a dispute or the fact that a suit or arbitration proceedings relating to a dispute is pending between the parties. Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the dispute is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defence is likely to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application. 13. It is submitted that in light of the aforesaid dicta of the Hon ble Supreme Court, the Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the suit is filed for the recovery of money, then all other proceedings for the very same subject matter ought to be stopped. The learned senior counsel referred to Section 5(6) of IB Code, 2016 which is reproduced below:- dispute includes a suit or Arbitration Proceedings relating to a. the existence of the amount of debt; b. the quality of goods or service; or c. the breach of a representation or warranty; He submitted that the term dispute cover all disputes on debt; default etc. and the definition of dispute is inclusive and not exhaustive . Further, the aforesaid section does not mention anywhere that the suit is to be filed by the debtor and not by the creditor. Therefore, the learned senior counsel finally submitted that the suit can be filed either by the Creditor or Debtor and thus, dispute means a dispute pending in Arbitration or a suit filed either by the creditor or debtor. 17. The learned senior counsel for the petitioner vehemently opposed the contentions put forth by the counsel for the respondent and submitted that from the bare perusal of the aforesaid provisions, it is clear that the suit referred in Sec. 5(6)(a) to (c) of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is nowhere connected to instant petition. The instant petition pertains to insolvency proceedings whereas the civil suit filed before High Court belongs to recovery of money. Moreover, this Adjudicating Authority is of the opinion that there would have been a different situation, had the respondent initiate a case related to breach of warranty or defective goods against the petitioner. However, the respondent neither raised any demand of express warranty prior to the said reply notice nor sought for replacement of goods supplied to the respondent. 21. In this case, the petitioner has filed a civil suit against the respondent and that too, after filing a winding up petition before the High Court. Otherwise also, the petitioner must have been aware of the well-established procedure of the winding up/insolvency process and would not have filed the civil suit before the Hon ble High Court to self-incriminate. Further, the learned senior counsel for the petitioner has stated that the Said civil suit has been filed just to save the limitation period for recovering monies from the respondent. This also reflects the bona fide on part of the petitioner. Thus, this Adjudicating authori ..... X X X X Extracts X X X X X X X X Extracts X X X X
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