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TMI Blog2019 (9) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 9 of the Insolvency & Bankruptcy Code, 2016 ("the Code") against the Corporate Debtor namely, the Travancore Cements Limited for initiation of Corporate Insolvency Resolution Process ("CIRP") on the ground the Corporate Debtor defaulted in paying US$ 3,02,160 plus in repaying Rs. 1,32,14,000 given as Earnest Money Deposit and Security Deposit. 2. The case of the Operational Creditor is that it entered into an agreement with the Corporate Debtor on 21.01.2016 for supplying Clinker to the Corporate Debtor for manufacturing white cement on furnishing a sum of Rs. 1,32,14,000 to the Corporate Debtor as Earnest Money Deposit and Security Deposit which is refundable on the date of expiry/termination of the agreement. In pursuance of this ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht for admission of this Company Application by initiating CIRP against the Corporate Debtor. 4. As against this Company Application, the Corporate Debtor counsel has filed written submissions stating that by virtue of the agreement entered between them, the Corporate Debtor received two consignments of While Clinker by raising invoices USA/TCL/2016/01 dated 20.02.2016 and USA/TCL/2016/02 dated 17.03.2016. Upon receipt of the aforementioned supplies, when the Corporate Debtor noticed that the supplied clinker was different from the sample exhibited to them and that the supply being of poor quality, the Corporate Debtor had suffered a loss to the tune of Rs. 23,70,000 thereby the Corporate Debtor immediately thereafter, i.e. 22.03.2016 inti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrears so that it could run its business without interruption to its production. It has also been further stated that the Operational Creditor has constantly pressed for the payment of the outstanding bills against the total amount US$ 3,02,160 along with interest 18% per annum. Since the agreement executed for the period from 21.01.2016 to 21.01.2017 having expired, the Corporate Debtor is also demanded to pay the EMD of Rs. 25,00,000 and SD of Rs. 1,32,14,000 paid by the Operational Creditor by stating that in the event the Corporate Debtor failed to pay the aforesaid amounts within a period of 21 days from the receipt of the notice, the Operational Creditor would be constrained to initiate proceedings under Section 272 of the Companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices, the invoice dated 17.03.2016 for an amount of USD 1,33,782.40 is being included in the claim amount by giving Section 8 notice on 13.11.2017 i.e. subsequent to the Corporate Debtor raising dispute in respect to the invoices 20.02.2016 and 17.03.2016, therefore we are of the considered view that dispute is in existence between the parties in respect to the quality of clinker supplied through invoice dated 17.03.2016 which is part of the claim amount. 9. As to the argument of the Operational Creditor counsel saying that since the Corporate Debtor has not issued reply notice to the Section 8 notice dated 13.11.2017 and made part payments after filing of this case, the argument of existence of dispute cannot be countenanced as dispute in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.03.2016 revealed rejection of second shipment, that is through invoice dated 17.03.2016. 12. Giving reply or not giving reply to Section 8 notice is not mandatory to find out as to whether dispute is in existence between the parties. The mandate is, dispute shall be in existence as on the date of issuance of Section 8 notice. Here in this case, the notice was issued on 13.11.2017 whereas dispute was raised over this supply in the month of March 2016 itself. The same has been reiterated in the replies given by the Corporate Debtor on 14.09.2017 and 09.10.2017 which is far before issuance of Section 8 notice. 13. Regarding part payments made by the Corporate Debtor, the corporate debtor is very much candid in saying that the monies are du ..... X X X X Extracts X X X X X X X X Extracts X X X X
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