TMI Blog2019 (9) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no record of debt or default. In this background, merely on the ground that there is no agreement reached between the parties, it was not open to the Adjudicating Authority to reject application under Section 9 preferred by the Appellant. From the decision of the Hon ble Supreme Court in the case of M/S. INNOVENTIVE INDUSTRIES LTD. VERSUS ICICI BANK ANR. [ 2017 (9) TMI 58 - SUPREME COURT ], it is clear that the Adjudicating Authority is only required to notice as to whether there is a debt and default or not. It was open to the Respondent (Corporate Debtor) to take plea that there was no debt payable in law or in fact but no such plea was taken. Therefore, as per decision of the Hon ble Supreme Court, if the record is complete a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MS s pursuant to two purchase orders. The Respondent has not raised any objection or demur as to the work executed by the Operational Creditor in respect of the services provided. The Appellant raised invoices totaling to ₹ 14,54,569/- which were duly accepted and acknowledged by the Corporate Debtor. Further case of Appellant is that pursuant to its claim the Corporate Debtor made part payment of ₹ 2,95,359/- leaving balance amount of ₹ 11,59,230/- along with interest of ₹ 4,27,746/-. Inspite of demand notice made by the Appellant, the Corporate Debtor failed to pay the rest of the amount. 3. The Respondent opposed the prayer on the ground that the claim of the Appellant is frivolous, vexatious a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoices upto 31st July 2015, as a matter of trust. 5. It was submitted, in respect to purchase orders placed by the Respondent, on its own huge jump in the SMS quantity which were beyond the capacity of the Respondent was made. On 30th July, 2015, the Appellant sent SMS worth ₹ 1,58,454/-, On 30th September, 2015, the Appellant sent SMS worth ₹ 9,11,856/- and on 31st October, 2015, the Appellant sent SMS worth ₹ 1,08,935/-. Contrarily, the Appellant has raised bill for SMS on 31st December, 2015 though it was beyond the capacity of the Respondent to comply with this huge number of SMS. 6. The Adjudicating Authority on hearing the parties observed as follows:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C 407 , the Hon ble Supreme Court observed and held as follows:- 27. The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning non-payment of a debt once it becomes due and payable, which includes non-payment of even part thereof or an instalment amount. For the meaning of debt , we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a claim and for the meaning of claim , we have to go back to Section 3(6) which defines claim to mean a right to payment even if it is disputed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in part III, particulars of the financial debt in part IV and documents, records and evidence of default in part V. Under Rule 4(3), the applicant is to dispatch a copy of the application filed with the adjudicating authority by registered post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The moment there is existence of such a dispute, the operational creditor gets out of the clutches of the Code. 30. On the other hand, as we have seen, in the case of a corporate debtor who commits a default of a financial debt, the adjudicating authority has merely to see the records of the information utility or other evidence produced by the financial creditor to satisfy itself that a default has occurred. It is of no matter that the debt is disputed so long as the debt is due i.e. payable unless interdicted by some law or has not yet become due in the sense that it is payable at some future date. It is only when this is proved to the satisfaction of the adjudicating authority that the adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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