TMI Blog2018 (8) TMI 1618X X X X Extracts X X X X X X X X Extracts X X X X ..... he mere fact that the Respondent/ Corporate Debtor had sent its ledger account via. e-mail dated 19.04.2017 in regard to principal amount of dues of the Appellant/Operational Creditor as per the closing balance mentioned in the statement would not in any manner dilute the factum of a pre-existing dispute when the demand notice in terms of Section 8(1) of I&B Code was issued by the Appellant/Operational Creditor. On consideration of the material on record, we are of the considered opinion that the Respondent/ Corporate Debtor has been able to demonstrate that a pre-existing dispute in regard to deficiency of service was in existence when the demand notice under Section 8(1) of I&B Code was issued by the Appellant/ Operational Creditor. The Adjudicating Authority did not err in noticing the same. - Company Appeal (AT) (Insolvency) No. 85 of 2018 - - - Dated:- 19-7-2018 - Mr. S. J. Mukhopadhaya, Chairperson And Mr. Bansi Lal Bhat, Member (Judicial) For The Appellant : Mr. K. V. Balakrishnan, Advocate For The Respondent : Mr. Sumit Shukla and Mr. Sushil, Advocates JUDGMENT BANSI LAL BHAT, J. This appeal has been preferred by Appellant Impex Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch came to be duly served on the Respondent/ Corporate Debtor. Appellant/ Operational Creditor claimed that it was only after issuance of such notice that the Respondent/ Corporate Debtor issued notice of dispute proposing arbitration in the matter. 5. Respondent/ Corporate Debtor in its reply filed before the Adjudicating Authority raised the issue of pre-existing dispute stating that the Appellant/ Operational Creditor was providing services to the sister concern of the Respondent/ Corporate Debtor viz. M/s SSMP Industries Ltd. under an agreement executed on 01.10.2015. It was stated that though there was no formal agreement between the parties to the application u/s 9, the Respondent/ Corporate Debtor being the sister concern of M/s SSMP Industries Ltd. was also provided with the services on similar terms. It was further stated that the management of M/s SSMP Industries Ltd. and the Corporate Debtor- DBA Enterprises LLP was common and the bills were discharged from the accounts of either Company. It was further stated that the Registered Office of both Companies had common address and liability of one was discharged by the other. It was further stated that both Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BA Enterprises LLP which is a limited liability partnership firm. It is submitted that dispute raised by Respondent/ Corporate Debtor is not in regard to the invoices raised by the Appellant on M/s DBA Enterprises LLP . Thus, the Adjudicating Authority committed grave error in rejecting the Appellants petition under Section 9 of the I B Code. 8. Per Contra it is contended on behalf of Respondent/ Corporate Debtor that the Respondent suffered financial loss on account of denial of export incentives due to negligence on the part of Appellant. When brought to its notice, the Appellant failed to resolve the issues. It is further submitted that it was after wait of 16 months that the Respondent/ its sister concern raised the debit note dated 31.08.2017 to recover the losses as per agreed terms. However, the Appellant disputed the entire claim which had been previously admitted forcing the Respondent to invite the Appellant for conciliation. It is further submitted that so long as the Appellant was getting the business it continued to work with the Respondent and its sister concern treating them as a common account. It is further contended that the Appellant suppressed the factum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that a suit or arbitration proceeding 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 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. 11. Adverting to the facts of the instant case, be it seen that the Appellant/ Operational Creditor as also the Respondent/Corporate Debtor have relied upon agreement executed on 01.10.2015 inter-se the Appellant/ Operational Creditor and M/s SSMP Industries Pvt. Ltd. which happens to be sister concern of Respondent/ Corporate Debtor - M/s DBA Enterprises . Parties also rely on common e-mails. It emerges from record that the Respondent/ Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings under Arbitration Act. Thus, there is no escape from the conclusion that the Respondent/Corporate Debtor had raised dispute much prior to the issuance of demand notice by Appellant/ Operational Creditor under Section 8(1) of I B Code. The mere fact that the Respondent/ Corporate Debtor had sent its ledger account via. e-mail dated 19.04.2017 in regard to principal amount of dues of the Appellant/Operational Creditor as per the closing balance mentioned in the statement would not in any manner dilute the factum of a pre-existing dispute when the demand notice in terms of Section 8(1) of I B Code was issued by the Appellant/Operational Creditor. 12. On consideration of the material on record, we are of the considered opinion that the Respondent/ Corporate Debtor has been able to demonstrate that a pre-existing dispute in regard to deficiency of service was in existence when the demand notice under Section 8(1) of I B Code was issued by the Appellant/ Operational Creditor. The Adjudicating Authority did not err in noticing the same. There being no infirmity in the impugned order and the appeal being devoid of merit, we dismiss the appeal. There shall be no orders as to ..... 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