TMI Blog2019 (2) TMI 1697X X X X Extracts X X X X X X X X Extracts X X X X ..... [ 2017 (9) TMI 1270 - SUPREME COURT] that the dispute must truly exist in fact and is not spurious, hypothetical or illusionary. Absolutely there is no material filed by Corporate Debtor that there existed a dispute in fact between it and the Operational Creditor. This is a Petition filed by Operational Creditor under Setion 9 of IBC. The Operational Creditor filed bank account copy It has issued demand notice to the Corporate debtor and there was reply. Thus, Petition filed by Operational Creditor is complete and Petition is liable to the admitted. The Adjudicating Authority admits this Petition under Section 9 of IBC, 2016, declaring moratorium for the purposes referred to in Section 14 of the Code - petition admitted - moratorium declared. - CP (IB) NO. 423/9/HDB/2018 - - - Dated:- 12-2-2019 - Hon'ble Shri Ratakonda Murali, Member (Judicial) For the Petitioner: Ms. D. Siri Preeti along with Ms A. Sancihya Rani and Mr. G. Jagadeesh Advocates For the Respondent: Mr. Av Venkatesh along with Ms. N. Sahithi, Mr. Tulasj Krishna, Advocates ORDER Shri Ratakonda Murali 1. This is a Petition filed by Operational Cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute between the Operational Creditor and Corporate Debtor in respect of the said Invoices which are marl ed as Annexure - B Bl Vol.-1 2 The ledger statements of the operational creditor marked as Annexures - K L shown at Page Nos. 66-74 and that there are no cases pending before any courts, forum, tribunal etc. (6) It is the case of Operational Creditor that an amount of ₹ 4,80,65,149/- (Principal ₹ 3,31,37,601/- and interest of ₹ 6,62,752/charged @ 24% P.A. from 08.06.2018 to 05.07.2018 for supply of Broken Rice and Principal amount ₹ 1,39,85,095/- and interest amounting to ₹ 2,79,701/- @ 24% P.A. from 02.06.2018 to 02.07.2018 towards supply of coal (as per the payment policy mentioned in Raw material Supply Agreement) is still due and payable by the Corporate Debtor towards invoices raised for broken rice and coal delivered during the 2018-2019. (7) It is averred that when Corporate Debtor failed to make the payments despite issuing reminders, the Operational Creditor issued FORM 3 dated 05-072018 by enclosing the copy of Invoices along with Statements/ demanding payment of the outstanding dues and that the Corporate Debtor r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yet to respond and make good the loss suffered by the Corporate Debtor. (6) It is the case of Corporate Debtor that the parties to the Raw Material Supply Agreement, i.e., the Corporate Debtor and Shri. Arun Agarwal and Smt. Annapurna Agarwal (Partners of Operational Creditor) have already exchanged notices on 15th and 16th June, 2018 and the Corporate Debtor replied to the said notices on the 2nd July, 2018. It is alleged by the Corporate Debtor that without following the terms of the Agreement, issuance of demand notice by the Operational Creditor on 05.07.2018 to Corporate Debtor demanding the alleged outstanding amount of ₹ 4,80,65,149/- is false and baseless and that the Corporate Debtor upon receiving the same had issued a reply dated 14.07.2018 which clearly establishes that there exists no privity of contract with the Applicant. Infact, a perusal of the reply would show that there is no valid claim by the Applicant and the Respondent has brought to the notice of the Applicant about the untenability of its claim and as aforementioned a perusal of the notice and reply would show that there exists a serious dispute which is to be adjudicated only by a competent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... communicated by the Corporate Debtor to the parties of the Raw Material Supply Agreement, i.e., Shri. Arun Agarwal and Smt. Annapurna Agarwal, vide letter dated 16.06.2018 i.e., much before the filing of the present petition. Further it is the case of Corporate Debtor that it already issued reply on 14.07.2018 to the demand notice sent by the Operational Creditor stating that it is not liable to pay an amount of ₹ 4,80,65,149/- (12) The Corporate Debtor admits the fact that along with Form-Ill Demand Notice on 05.07.2018 Operational Creditor sent enclosures but those enclosures pertains to Priya Trading Company . which has no connection with the Raw Material Supply Agreernent and that the Corporate Debtor never executed any agreement with Priya Trading Company. and thus, Corporate Debtor has no obligation towards it. The Corporate Debtor further submits reply to the Form - Ill Demand Notice sent by the Applicant on 14.07.2018 wherein Corporate Debtor clearly stated that there is no privity of contract that exists with the Operational Creditor, and the claim is baseless and raised to pressurize the Corporate Debtor on false allegations. (13) The Corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 1 Supreme Court cases 353. (iv) Hon'ble Apex Court decision in Innoventive Industries Limites Vs ICICI Bank Another cited in (2018) 1 Supreme Court Cases 407. 4. I have heard the Counsel for Operational Creditor and Counsel for Corporate Debtor. It is the case of Operational Creditor it supplied raw material to the Corporate Debtor in pursuance of execution of Raw Material Supply Agreement dated 09.04.2018. It is the case of Operational creditor that Corporate Debtor having received the raw material failed to pay the amount covered by the invoices. Thus, Corporate Debtor commtited default. 5. The case of Operational Creditor that it supplied broken rice and coal to the Corporate Debtor. The amount committed default in respect of supply of broken rice is ₹ 3,31,37,601/- and default committed in respect of supply of coal is ₹ 1,39,85,095/- Interest is claimed at 24% from 08.06.2018 to 05.07.2018 for supply of broken rice which comes to ₹ 6,62,752/- and in respect of coal, interest is claimed from 02.062018 to 02.07.2018 which comes to ₹ 2,79,701/-. Thus, it is the case of Operational Creditor the total amount committed defaul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or that there exists no contract between Operational Creditor and Corporate Debtor. So, the contention of Corporate Debtor that there is no privity of contract between the Operational creditor and it, The contention of the Corporate Debtor, it entered into contract with Shri Arun Agarwal Smt Annapurna Agarwal on 09.04.2018 for supply of raw material and as such there is no agreement with Operational Creditor for supply of raw material. 8. The Corporate Debtor further stated in the reply that it had issued a legal notice on 16.06.2018 demanding the Operational Creditor to pay a sum of ₹ 4.91 crores and also ₹ 1 crore towards damages for tarnishing the image of Corporate Debtor's reputation in the business circle, public and its employees. The Corporate Debtor clearly admitted in the reply to the Lawyer's notice that Shrj Shyam Sundar Agarwal who is partner in Operational Creditor's firm is no other than husband of Smt Annapurna Agarwal. It is very interesting to note the Corporate Debtor clearly admitted in the reply to lawyer's notice that it had to pay an amount of ₹ 2,96,54,219/- and the same to be paid to Shri Arun Agarwal and Smt Ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Operational Creditor, dehors of the Raw Material Supply Agreement. 11. Here the question is who supplied the raw material. Undoubtedly, the Operational Creditor supplied the raw material. There is default. I have already stated the Corporate Debtor categorically admitted the amount actually payable to the Supplier is ₹ 2,96,54,219/-. Therefore, the Operational creditor is supplier and Corporate Debtor is buyer and there is default. 12. The contention of Learned Counsel for Corporate Debtor that Operational' Creditor has no locus standi to file Petition under Section 9 of IBC on the ground that Corporate Debtor never entered into Agreement with Operationar Ceditor for supply of raw material. The contention of Counsel, contract binds the parties to the contract. The Operational Creditor is not a party to the contract. Thus, there are no obligations to be discharged by the Corporate Debtor as far as Operational Creditor is concerned. I already stated dehors of agreement for supply of raw material the Operational Creditor is supplier and Corporate Debtor is the buyer. It is also interesting to note Corporate Debtor made part-payment to the Operational Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Debtor through the firm M/S Priya Trading Company, the Operational Creditor herein, in which Smt Annapurna Agarwal and her husband are partners. 14. The next contention of Learned Counsel for Corporate Debtor that there existed a dispute between Corporate Debtor and suppliers. It is a pre-existing dispute. Therefore, the Petition under Section 9 of IBC is not maintainable against Corporate Debtor. The Corporate Debtor filed the copy of Raw Material Supply Agreement whereas it is Operational Creditor who has filed the invoices issued to the Corporate Debtor. It is the case of Operational Creditor, legal notice was issued to the Corporate Debtor on 15.06.2018. It is shown as Annexure-H. It is issued by Shri Arun Agarwal and Smt Annapurna Agarwal to the Corporate Debtor stating that raw material was supplied in pursuance of Raw Material Supply Agreement dated 09.04.2018 and same was supplied upto. 10.05.2018. It is also stated in the notice that they had supplied broken rice worth ₹ 5,51,37,601/- and coal of value worth ₹ 1,24,86,240/- and that they have received only ₹ 2,52,16,000/- and balance due as on 10.05.2018 was ₹ 4,19,07,841/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on para 25 of the judgement which is as follows:- Simply because some payments had been made by ONGC to the Appellant, it would not be established that there was a privity of contract between ONGC and the Appellant and only for that reason ONGC cannot be saddled with a liabiity to pay the amount payable to the Appellant by the Respondent. Counsel contended the Operational Creditor cannot saddle the Corporate Debtor with liability to pay remaining balance simply on the ground it had paid some amount to the Operational Creditor when there is no privity of contract between the two. 18. I already discussed at length M/S Priya Trading Company is nothing but a firm belonging to the suppliers and in pursuance of Agreement only the Supplier supplied the raw material to the Corporate Debtor through M/S Priya Trading Company, the Operational Creditor herein. 19. The Counsel for Corporate Debtor also relied on the decision of Hon'ble High Court reported in 2010 SCC Online Del 4415: (2011) 178 DLT-118: (2011) 167 comp Cas 310. Counsel for Corporate Debtor relied on para 19 of the judgement and contended that contract cannot confer rights or impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovations Private Ltd Vs Kirusa Software Private Ltd that the dispute must truly exist in fact and is not spurious, hypothetical or illusionary. Absolutely there is no material filed by Corporate Debtor that there existed a dispute in fact between it and the Operational Creditor. 21. Some more Operational Creditors filed separate Petitions. against this Corporate Debtor for committing default of operational debt and they are all pending. The Operational Creditor filed all invoices pertaining to the supply of broken rice and also supply of coal.. They are shown as AnnexureB B-1. So volumnous invoices are filed which would go to show that huge quantity of raw materials were supplied to the Corporate Debtor. This is a Petition filed by Operational Creditor under Setion 9 of IBC. The Operational Creditor filed bank account copy It has issued demand notice to the Corporate debtor and there was reply. Thus, Petition filed by Operational Creditor is complete and Petition is liable to the admitted. 22. Hence, the Adjudicating Authority admits this Petition under Section 9 of IBC, 2016, declaring moratorium for the purposes referred to in Section 14 of the Code, with foll ..... X X X X Extracts X X X X X X X X Extracts X X X X
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