TMI Blog2019 (7) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... e prior to issuance of demand notice under Section 8 of IB Code. After referring to Section 8 and the judgment in Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. [ 2017 (9) TMI 1270 - SUPREME COURT ] went on to hold that, what is important is that the existence of dispute and/or a suit or arbitration proceeding must be pre-existing i.e. it must exist before the receipt of demand notice or invoice as the case may be. This adjudicating authority is of the considered view that there exists a pre-existing dispute regarding failure on the part of the applicant to supply coal as per condition and the which procured from outside there is/are difference in price of the material which is a matter of dispute raised by the corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orated under the Companies Act, 1956 on 10th July, 1991 and having its registered office at Village Barbodhanta, Olpad, Dist. Surat, Gujarat State, having identification No. L21010GJ1991PLC019432. That, authorised share capital of the corporate debtor is ₹ 233,00,00,000/- and paid up share capital is ₹ 147,52,20,320/-. 4. The applicant submitted that in its normal course of business corporate debtor contacted for loan term business relation and specifically for the purchase of Coal of Indonesian origin and the operational creditor had been supplying high quality materials to the corporate debtor regularly as per mutually agreed upon terms and conditions contained in the purchase orders and the invoices and to the satisfaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent by the applicant towards supply of materials as stated by the applicant, 7. It is submitted by the applicant that from March, 2017 to August, 2017 innumerable requests were made over phone to the corporate debtor to make payment of the outstanding amount after adjusting the damages suffered in terms of the clause 8 (Risk Purchase) of the terms and conditions of the purchase order. That, on 09.09.2017 the applicant vide email requested the corporate debtor to deduct the difference of amount in both the orders which comes to ₹ 10,50,000/- in order to compensate the losses of the corporate debtor. That, the applicant sent nine reminders to the corporate debtor, by email during the month September, 2017 to make payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and presumption without appreciating the evidences on record. 11. The respondent has further submitted that the applicant was well aware about the dispute between the parties regarding the outstanding amount to be paid as the same has been followed up by the parties at regular intervals. That, the applicant has admitted in the pleadings before this Bench that they were not able to supply the material as per the order and, therefore, the respondent had to purchase the said quantity of material from the third party seller at a higher market rate in lieu of the cancellation of the order by the applicant. That, the applicant admits in the instant petition that they have followed up with the respondent for the payment of outstanding amount as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the account of the applicant. Accordingly, the respondent raised debit note dated 31.12.2016 for ₹ 49,50,000/-. The records available shows that upon receipt of demand notice dated 01.02.2018, the respondent replied to the said notice vide reply letter dated 13.02.2018 stating and informing the applicant that the respondent had raised a debit note dated 31.12.2016 for non-supply of the coal and subsequent procurement of the material from open market. That, said letter of the respondent dated 13.02.2018 is replied by the applicant vide letter dated 13.03.2018. Under these circumstances, the very act of applicant making a reply to the letter of respondent dated 13.02.2018 fortifies that there is/was an existing dispute regarding s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority, therefore, while examining an application under Section 9 of the Act, will have to determine the following: - (i) Whether there is an operational debt as defined exceeding ₹ 1.00 lakh (See Section 4 of the Act) (ii) Whether the documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid and (iii) Whether there is existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt in relation to such dispute? If any one of the aforesaid conditions is lacking, the application would have to be rejected. 19. In view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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