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TMI Blog2019 (9) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... or) filed application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as 'I&B Code') against 'M/s Zopsmart Technology Pvt. Ltd.' (Corporate Debtor) which having rejected by Adjudicating Authority (National Company Law Tribunal), Bengaluru Bench, Bengaluru by order dated 5th October, 2018, the present appeal has been preferred by the Appellant. 2. According to Appellant two purchase orders dated 21st April, 2015 and 23rd April, 2015 were placed by the Corporate Debtor for availing promotional Short Messaging Services (SMS) from the 'Operational Creditor' for text SMS's. Accordingly, the Appellant delivered the required number of SMS's pursuant to two purchase orders. The Respondent has not raised any ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent to Appellant has not been disputed. It was contended on behalf of the Respondent that three more invoices were issued on 15-16 June, 15-16 July and 15-16 August. Out of the total amount paid to the Appellant, a sum of Rs. 23,178/- was paid towards the purchase orders placed by the Respondent to the Appellant and thereafter owing to telephonic request of the officials of the Appellant, the Respondent made further payment of Rs. 2,72,161/- to the Appellant in good faith for extra invoices. It was contended that the Respondent has made payment for purchase orders placed by them including two more invoices upto 31st July 2015, as a matter of trust. 5. It was submitted, in respect to purchase orders placed by the Respondent, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into this issue. CP(IB)No.12/BB/2018 is rejected. No order as to costs." 7. On hearing learned counsel for the parties and the judgment, we find that the Adjudicating Authority has not applied its mind nor gone through the application under Section 9 (Form 6) to find out whether there is debt payable or not. It has simply rejected the application on the ground that there is no contract between the parties which cannot be a ground. 8. In "Innoventive Industries Ltd. Vs. ICICI Bank and Ors. - (2018) 1 SCC 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. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant 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 dispatc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the manner provided in Section 8(1) of the Code. Under Section 8(2), the corporate debtor can, within a period of 10 days of receipt of the demand notice or copy of the invoice mentioned in subsection (1), bring to the notice of the operational creditor the existence of a dispute or the record of the pendency of a suit or arbitration proceedings, which is pre-existing-i.e. before such notice or invoice was received by the corporate debtor. 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 inf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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