TMI Blog2018 (3) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... the regular payments and is coming up with such plea, which on the face of it, deserves to be out rightly rejected. Then no document to show that the debit notes were ever set to the petitioner nor any other communication was sent to the petitioner, who has paid the price of the paddy to the farmers from whom it was procured. This is what should be understood as correct interpretation of the term dispute, while separating grain from the chaff and to reject the spurious defence, which is merely a bluster. In view of the above, the application deserves to be admitted. - CP (IB) No.117/Chd/CHD/2017 - - - Dated:- 2-2-2018 - MR. R. P. NAGRATH, J. For The Petitioner/Operation Creditor : Mr.Deepankur Sharma , Advocate Respondent/Corporate Debtor : Mr.Arun Saxena, Advocate And veen Gupta, Advocate JUDGMENT This petition has been filed by M/s Hajura Singh Bhim Singh, a sole proprietorship concern claiming itself to be the operational creditor , under Section 9 of the Insolvency Bankruptcy Code, 2016 (for short to be referred here-in-after as the Code ) read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to pay, apart from 2.5% of the commission earned by the operational creditor. 5. The respondent-corporate debtor committed default in making further payment of the outstanding amount. However, it issued cheques to the operational creditor, which were dishonoured. The petitioner made several attempts to recover the amount and also initiated the proceedings against the corporate debtor under section 138 of Negotiable Instruments Act. 6. The amount of debt and default is stated to be ₹ 25,77,097/-. The petitioner has attached computation of default in the tabulated chart as at Annexure A-3, which includes the interest amount of ₹ 6,22,020/-. 7. The corporate debtor issued Form VAT-D2 dated 22.06.2016 admitting the receipt of the 1683 Qtls of paddy for a total amount of ₹ 47,26,788.34 from M/s Hajura Singh Bhim Singh, Jind. Copy of Form VAT-D2 is at Annexure A-2. The form is dated 22.06.2016. 8. The petitioner sent a demand notice dated 15.08.2017 (in fact no date is mentioned on the notice itself) Annexure A-8 in Form No.3 as prescribed in clause (a) of sub-rule (1) of rule 5 of the Rules giving all the details to which the corporate debtor sent a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner sent rejoinder to the above reply vide letter dated 09.11.2017 (Annexure A-14). 13. The instant petition was thus filed on 17.11.2017 after expiry of 10 days of the service of demand notice under Section 8 of the Code. 14. On filing of this petition, copy thereof was dispatched to the corporate debtor by speed post on 29.11.2017 at the registered office of the company in order to comply with the requirement of sub-rule (2) rule 6 of the Rules. The copy of the postal receipt dispatching the copy of petition by speed post is at Annexure A-18. 15. Notice of this petition was sent to the respondent-corporate debtor by speed post as well as at the email address of the corporate debtor available on the master data of the company. The petitioner filed the affidavit of service by attaching the postal receipt, tracking report and the copy of the email, which was sent at the email address available on the master data. 16. The respondent-corporate debtor filed the reply contents of which are supported by the affidavit of Shri Dinesh Gupta, Managing Director of the respondent-corporate debtor. With the reply the resolution of the Board of Directors of the respondent-corporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R-1. 19. It is further alleged that it was an understanding that the corporate debtor would hand over the cheques of the Kaccha Arthias to the Pacca Arthias and the quality issues in respect of the goods supplied, were intimated to the Pacca Arthia and appropriate deductions were made intimating thereby that there was no direct dealing with the Kaccha Arthias. Pacca Arthias would charge a brokerage of 1% on every bulk purchase in Jind Mandi and the corporate debtor was to pay 2.5% commission to the kaccha Arthias. Similarly, the corporate debtor also used to pay the commission of 2.5% for purchase of the paddy directly to the Kaccha Arthias and accordingly the TDS was deducted. Copy of the Ledger Account of the Pacca Arthias in the books of the respondent-corporate debtor along with the TDS Certificates are enclosed at Annexure R-4 (Colly). The TDS Certificates with respect to Kaccha Arthias i.e. the petitioner, which have been relied upon by the petitioner are not disputed. 20. The other main allegation is that there was a dispute of the quality of the goods raised by the respondent-corporate debtor. According to the respondent, the goods supplied to the respondent vide the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .10.2017 Annexure A-11 (Colly) and reply to this demand notice sent by the respondent is dated 05.11.2017 Annexure A-13. 26. The petitioner has filed various bills raised on the corporate debtor for sale of the paddy and copy of these bills/invoices are from 21.11.2014 to 21.12.2014 from pages 52 to 74 of the paper book. All these bills are issued by M/s Hajura Singh Bhim Singh, which is a proprietorship concern. The total value of 1683 Qtls of the paddy comes to ₹ 47,26,788.34. 27. It is admitted by the corporate debtor in Form VAT-D2 dated 22.06.2016 Annexure A-2, which is a declaration of VAT Dealer while making purchases in pursuance of sale in the course of export outside the territory of India. This declaration, which is issued by the respondent- corporate debtor is not a disputed document. The purchases made by the respondent from the petitioner are to the tune of ₹ 47,26,788.34 during the financial year 2014-15. The details of invoices under which the goods were purchased, are mentioned on the back of the document Annexure A-2 reflecting the purchase of 1683 Qtls of paddy of the aforesaid value. Even as per the ledger book of the respondent, the total sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porate debtor as mentioned on the back of VAT-D2 admittedly issued by the respondent. The respondent has filed copies of certain invoices to support the contention that the petitioner is a Kaccha Arthia and Pacca Arthia i.e. commission agents are M/s Mangat Ram Pawan Kumar and Bhardwaj Co. The respondent filed so many invoices to support this contention, which are from pages 14 to 32 (Annexure R-3 (Colly)) and out of these, only the invoices at pages 23 and 32 pertain to the paddy purchased from Hajura Singh Bhim Singh, but rest of the invoices in question have not been filed by the respondent. In any case, if Mangat Ram Pawan Kumar was a Pacca Arthia, his role was over on payment of 1% of the commission to that firm whereas the outstanding amount in respect of the purchase made from the petitioner is the same as per the version of both the parties. 34. The respondent had been making the payment of interest to the petitioner admittedly in respect of the outstanding payment and deducting the tax at source for which the documents attached are at Annexure A-6 at page 76 of the TDS Form 26AS, which is required under Section 203AA of Income Tax Act for the assessment year 2015-16 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of agent is mentioned as M/s Mangat Ram Pawan Kumar and in a few debit notes, agent s name is M/s Bhardwaj Co., but the name of the supplier is mentioned as Hajura Singh whereas VAT-D2 Form and the cheques issued by the respondent-corporate debtor is mentioned as Hajura Singh Bhim Singh as further evident from the cheque dated 30.06.2017 at page 88 of the paper book. In the debit note at page 43 of the paper book of reply, the deduction of the supplies of different quality is made @ ₹ 600/- per Qtl due to high moisture; on the next page is the deduction made @ ₹ 800/- per Qtl for the low quality; at page 45, the deduction is @ ₹ 700/- per Qtl for the High Immature, so on and so forth. Adopting of such a procedure is totally unacceptable. In the Mandis i.e. the Market Committee, the purchases are made by the Rice Mills in respect of the paddy on as is where is basis . This is not an agency like Food Corporation of India or the Department of Food Supplies, which analysis the quality of the rice to be supplied by the Rice Millers for Custom Milling of the rice, based on instructions of the government and the agreements in writing. 37. Coming to the issue a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the issuance of the demand notice. The aforesaid objections have also been raised in the reply to the present demand notice dated 05.11.2017 Annexure A-13. Though this reply to the demand notice purports to be dated 05.11.2017, but the same was posted to the petitioner vide postal receipt dated 07.11.2017 as per the postal receipt at page 125 and delivered to the petitioner on 09.11.2017 as per the tracking report at page 126 of the paper book. 41. It would be important at this stage to refer to Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. [2018] 1 SCC 353 of the Hon ble Supreme Court. The Hon ble Supreme Court held as under:- that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application 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 proceeding relating to a dispute is pending between the parties. Therefore, all that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bring to the notice of the operational creditor the existence of a dispute or record of pendency of a suit or arbitration proceedings which is pre-existing i.e. before such notice or invoice was received by the corporate debtor (emphasised supplied). 45. As already observed in this case, the respondent had been making regular payments of the interest as well as the principal to the petitioner-operational creditor about three years after the transaction was completed, but raised an issue with regard to the quality-cut only after the first demand notice under Section 8 of the Code was sent. The present cannot be considered to be a case where the dispute has been raised before the receipt of the demand notice. 46. It is not the case of the respondent that it has settled the accounts of the present transaction with the Pacca Arthias nor it is averred in defence that Pacca Arthias filed any proceedings against the petitioner nor even the respondent has taken any proceedings against the petitioner except making the regular payments and is coming up with such plea, which on the face of it, deserves to be out rightly rejected. Then no document to show that the debit notes were ever ..... X X X X Extracts X X X X X X X X Extracts X X X X
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