TMI Blog2019 (2) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... out in evidence that operational creditor issued notice for reference of the dispute to the arbitration. The liability if any on account of admitted non-delivery of goods is denied by the operational creditor. The above said circumstances are sufficient to hold that there is a pre-exist- ing dispute in respect of the amount liable to be paid by the corporate debtor to the operational creditor. What is meant by existence of dispute to be established on the side of the corporate debtor in a case of this nature is dealt with in Mobilox Inno- vations P. Ltd. v. Kirusa Software P. Ltd. [2017 (9) TMI 1270 - SUPREME COURT OF INDIA]. The corporate debtor issued reply notice to the demand notice issued under section 8(2) of the Code so as to bring to the notice of the opera- tional creditor the existence of a dispute, which is evidently found pre- existing before the issuance of the notice received by the corporate debtor. Thus the application is liable to be rejected under section 9(5)(ii)(d) of the Code. Accordingly rejected. - C. P. (IB) No. 415/KB/2018. - - - Dated:- 7-1-2019 - Jinan K. R. Judicial Member For the Operational Creditor : Awadhesh Kr. Rai and Ms. Pooja Roy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the corporate debtor and referred to in the demand notice. Though the corporate debtor was in receipt of the demand notice did not pay the outstanding dues but issued a reply con- tending untenable contentions. Therefore, the operational creditor has filed this application for initiating the CIRP as against the corporate debtor. To strengthen the said contentions the operational creditor has produced the following documents : (i) Statutory demand notice dated October 7, 2017 under the Insol vency and Bankruptcy Code, 2016 along with invoices and purchase order being annexure B to the application. (ii) Undated reply to demand notice dated October 7, 2017 of the operational creditor being annexure C to the application. (iii) The statement of bank accounts as per affidavit dated December 31, 2018. 5. Upon the aforesaid contentions the applicant prays for admitting the application under section 9 of the I and B Code, 2016. 6. The respondent/corporate debtor entered appearance and filed reply affidavit contending in brief is the following. 7. The application filed under section 9 of the I and B Code, 2016 is incom- plete for want of details regarding the date of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operational creditor under purchase order No. 2. Moreover, the corporate debtor is not liable in duress to pay to the operational creditor. Under the aforesaid con- tention the corporate debtor prays for dismissal of the application with costs. 9. The operational creditor has filed rejoinder denying the allegations levelled by the corporate debtor in its reply affidavit. The operational cre- ditor contends that the application filed is complete and that the date of default is furnished in the application and a copy of the board resolution proving authorisation given to the authorised signatory has been annexed with the application. The contentions that operational creditor has failed to deliver and misplaced 2 packets out of the 7 packets assigned for delivery as per invoices dated August, 12, 2014 and October 28, 2014 are incorrect. The operational creditor contended that the abovementioned 2 invoices were not claimed by the operational creditor in the instant application and the claim in respect of the invoices of the operational creditor is for the year 2015 and the corporate debtor did not challenge the issuance of the invoices referred to in the application and in the dema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery/loss of articles entrusted to the operational creditor is pending for consideration and that the purchase orders issued thereafter is in continu- ation of the purchase order under dispute and that the corporate debtor was unable to raise insurance claims on account of the default on the side of the operational creditor in delivering the materials and goods supplied to it and thereby, the amount claimed as per the purchase orders referred to in the application is not liable to be paid by the corporate debtor to the operational creditor. 14. Learned counsel appearing for the operational creditor submits that the claims preferred in the application is not related to the purchase orders referred to in the reply affidavit. The claim referred to in the application is related to the purchase orders dated January 30, 2015 to April 30, 2015. According to him ₹ 3,33,170.58 is the outstanding dues payable by the corporate debtor on account of raising invoices referred to in the demand notice as well as in the application. The applicant has submitted a calcu- lation statement showing invoice numbers for which the claim is raised in the application. The details of the invoices as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neration of invoices referred to in the application is a continuation of service rendered by the operational creditor on the basis of purchase order No. 4540003594/75 BMHE dated June 20, 2013 and the purchase order referred to in the appli- cation dated January 30, 2015 is the purchase order issued in continuation of the earlier purchase order which contains the contractual terms and that the invoices generated as per the purchase order referred to above dated June 20, 2013 is under dispute because the material and goods entrusted to the operational creditor for delivery to its customers could not have been rendered by the operational creditor and the material has been lost while in transit and the corporate debtor raised claim as against the non-delivery of goods/loss of goods on transit and the goods worth of ₹ 2,02,585.86 and thereby, the corporate debtor is entitled to realise that amount from the operational creditor and unless and until the said claim put forward by the corporate debtor is settled no amount exceeding the amount due to corporate debtor is liable to be paid to the operational creditor, argued by learned counsel for the corporate debtor. According to him, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot compel my client to initiate legal process including invoking arbitration clause which involves huge cost eventually to be paid by you only. 7. I, therefore hereby call upon you to pay the entire outstanding dues amounting to ₹ 3,33,171 together with interest at 2 per cent. per month from the date when the said amount become due and pay able till its realization, within 10 days from the date of receipt of this notice, failing which my client shall be compelled to invoke the arbi tration clause and appoint an arbitrator for adjudication of disputes, for which you will be also liable to pay costs, damages and other charges and consequences thereof. 17. So, on a reading of the above said letter addressed to the corporate debtor indicates that dispute regarding the non-payment of the amount due as per the invoices referred to in the application, is pending for con- sideration before the corporate debtor prior to issuance of the demand notice. It is significant to note that the operational creditor issued a legal notice on September 29, 2015 demanding same outstanding amount under section 433 of the Companies Act, 1956. That legal notice was replied by the corporate d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the operational creditor the 'existence' of a dis pute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the adju dicating 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 unsup ported 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 dis pute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application. 21. The above said proposition is squarely applicable in the case in hand. The corporate debtor issued reply notice to the demand notice issued under section 8(2) of the Code so as to bring to the notice of the opera- tional creditor the existence of a dispute, which is evidently found ..... X X X X Extracts X X X X X X X X Extracts X X X X
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