TMI Blog2019 (5) TMI 1683X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. This Company petition has been filed by Kanan Graphics Pvt. Ltd., Operational Creditor or Petitioner under Section 9 of the Insolvency and Bankruptcy Code, 2016 ( I B Code ) for initiation of Corporate Insolvency Resolution Process ( CIRP ) against Print Plus Private Limited, the Corporate Debtor on the ground, that the Corporate Debtor defaulted in payment of ₹15,96,723/- against the invoices raised by it on the Corporate Debtor. The date of default is stated as 29.02.2016. 2. The Operational Creditor states that it is in the business of supply of iron and steel plates which are manufactured by Technova Imaging Systems Pvt Ltd ( Technova ). The total debt of ₹15,96,723 (Principal due ₹14,96,370 less ₹2,95,267 towards the credit notes issued =Outstanding amount = ₹12,01,103 + interest @ 25% i.e. ₹3,95,620) is arising out of the undisputed quotation raised by the Operational Creditor on 23.1.2016 for supply of Technova Plates. 3. Several complaints were received from the Corporate Debtor in respect of the quality of the goods manufactured by Technova and supplied by the Operational Creditor. Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isputes is sought to be taken as disputes in the present proceeding. 6. The Corporate Debtor filed its reply on 29.10.2018 opposing the petition on various grounds. The Corporate Debtor submits that from April 2015 till about July 2016, the petitioner supplied several defective goods that cost severe losses to the Corporate Debtor and the fact above of defective goods was brought to the attention of the Petitioner by way of an email. The Petitioner is said to have collected the defective goods from the Corporate Debtor without replacing them. The Corporate Debtor has placed reliance on email correspondence dated 30.3.2016, 31.3.2016, 2.4.2016, 18.10.2017 and 24.11.2017 to substantiate the existence of a dispute and seeks dismissal of the petition. 7. The Corporate Debtor has submitted that the purchase orders and corresponding invoices on record should not be viewed in isolation as they are part of continuing business transaction between the parties. The Corporate Debtor has further stated that if the petitioner can raise credit notes for the defective goods supplied by it, then there is no reason why the Petitioner is not similarly liable for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or. The Petitioner states that the Corporate Debtor did not mention the alleged loss of ₹28,00,000 before or at the time of accepting the credit notes. 11. We have heard the arguments of the parties and perused the records. 12. The Petition is filed by Mr Chetan Shantilal Shah, authorised by the Board Resolution dated 20.7.2017. 13. The Petitioner has annexed a copy of Bank Certificate dated 19.7.2017, whereby it is certified that after 28.7.2016, the Petitioner has not received any payment from the Corporate Debtor. The Petitioner has also annexed an affidavit under Section 9(3)(b) dated 6.3.2018 stating interalia that the Corporate Debtor has replied to the Demand Notice raising disputes for the first time after receipt of demand notice. 14. The Corporate Debtor had raised a dispute regarding the defective goods under which the Operational Creditor has issued three credit notes dated 10.6.2016, 30.6.2016 and 7.7.2016. The ledger account maintained in the Books of the Corporate Debtor records these credit notes. The final credit balance, as reflected in the ledger, produced on record by the Corporate Deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that it had quantified the loss caused to it due to a breach of an agreement to the tune of ₹28,00,000/-. Moreover, the Corporate Debtor in its written submission has admitted that it has notified the Operational Creditor about the dispute regarding the loss of ₹28,00,000/- only once before the communication dated 18.10.2018 that was in its notice of dispute dated 15.05.2017. The earlier petition may have been dismissed on technical grounds, but the demand notice was an intimation of the intention of the Petitioner to file insolvency proceedings. The purpose of law requiring the dispute to be pre-existing to receipt of the demand notice is to safeguard the operational creditors right from malicious and false disputes being raised by operational debtors once they know that a creditor intends to move insolvency petition against it. In the present matter, if the Corporate Debtor is allowed to take advantage of a dispute that it has raised in its reply to the first demand notice, then the purpose of requiring the dispute to be pre-existing to the receipt of the demand notice would be frustrated. 17. Further, the Hon ble NCLAT in The Dhar Textile Mills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inancial Creditor. 21. The Petitioner has not proposed the name of a registered insolvency resolution professionals Interim Resolution Professional, to carry out the functions as mentioned under I B Code. 22. The Application under sub-section (2) of Section 9 of I B Code, 2016 is complete. The existing financial debt of more than rupees one lakh against the corporate debtor and its default is also proved. Accordingly, the petition filed under section 9 of the Insolvency and Bankruptcy Code for initiation of corporate insolvency resolution process against the corporate debtor deserves to be admitted. ORDER This petition filed under Section 9 of I B Code, 2016, against the Corporate Debtor for initiating corporate insolvency resolution process is at this moment admitted. We further declare moratorium u/s 14 of I B Code with consequential directions as mentioned below: I. That this Bench as a result of this prohibits: a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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