TMI Blog2020 (1) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... t supply the material as per the Purchase Order and the Respondent had issued a Debit Note on the Appellant debiting an amount of ₹ 49,50,000/- and the same has been communicated to the Appellant by e-mail dated 23.09.2017 at 12:58 P.M. and the Appellant had received the said e-mail and replied to the said e-mail on the very same day i.e., on 23.09.2017 at 3.14 P.M. Thus it is a case of pre-existence of dispute prior to the issuance of Demand Notice dated 01.02.2018. It is clear that the Adjudicating Authority has to satisfy whether there is pre-existence of dispute prior to the receipt of Demand Notice or there is a record of dispute in the Information utility and in such case, the Adjudicating Authority shall reject the application - there is an existence of dispute prior to the receipt of Demand Notice. Appeal dismissed. - Company Appeal (AT)(Insolvency) No. 620 of 2019 - - - Dated:- 26-11-2019 - Justice A.I.S. Cheema] Member (Judicial), Kanthi Narahari Member (Technical) And V P Singh Member (Technical) For the Appellant : Mr. Mritunjay Kr. Tiwary and Mr. Sumit Kumar, Advocates For the Respondent : Mr. Arpan Behal, Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k cost and the amount of difference in the rate will be debited in your account 6. While matter stood thus, the Appellant issued a Demand Notice dated 01.12.2018, demanding an amount of ₹ 43,18,668/- stated to be defaulted by the Corporate Debtor basing upon certain invoices. The Respondent vide reply dated 13.02.2018 to the said Demand Notice stated that they have raised Debit Note dated 31.12.2016 for ₹ 49.50 lakhs against non-supply of 3500 MT coal as the same had to be procured by them from other parties at a differential price @ ₹ 1650/per MT. 7. It is not in dispute that the Respondent- Corporate Debtor raised the Debit Note dated 31.12.2016(at page 66 of the paper book) for ₹ 49,50,000/- on the Appellant. Further the Respondent issued the Debit Note for the same amount dated 06.01.2017 (at page -67) addressed to the Appellant stating that Dear Sir, We have debited your account with ₹ 49,50,000/- (Rupees Forty Nine Lakhs Fifty Thousand only) as per the details given below . In the particulars of the said Debit Note it is mentioned that The following amount credited to you re A/c coal materials our P.O. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant debiting an amount of ₹ 49,50,000/- and the same has been communicated to the Appellant by e-mail dated 23.09.2017 at 12:58 P.M. and the Appellant had received the said e-mail and replied to the said e-mail on the very same day i.e., on 23.09.2017 at 3.14 P.M. Thus it is a case of pre-existence of dispute prior to the issuance of Demand Notice dated 01.02.2018. 11. We are of the view that the learned Adjudicating Authority rightly rejected the application with a reasoned order and no interference is called for. 12. Learned Counsel for the Appellant filed Written Submission and relied upon the judgment of the Hon ble Supreme Court in the matter of Mobilox Innovations Private Limited vs. Kirusa Software Private Limited to show that the Adjudicating Authority/NCLT can only reject the application under Section 9 of IBC if the Corporate Debtor raises a substantial or bonafide dispute as to the existence of the debt. Learned Counsel for the Appellant contended that the dispute raised by the Respondent-Corporate Debtor is not a bonafide dispute as held by the Hon ble Supreme Court. Further learned Counsel relied upon the judgment of this Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defence is likely to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application. As held supra in the present case the dispute between the parties truly exists prior to issue of Demand Notice and we are of the view that it is a bonafide dispute and not by hypothetical or spurious. 15. Learned Counsel for the Respondent filed Written Submission taking the stand that in the Purchase Order dated 09.08.2016 at clause-8 it has been clearly mentioned that in case if the Appellant failed to supply the coal as per schedule, the Respondent has the right to buy coal from the Coal Market at the risk of the Appellant. The amount of difference in the rate will be debited from the account of the Appellant. Further, they have also r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) Reject the application and communicate such decision to the Operation Creditor and the Corporate Debtor, if- (a), (b), (c) .. (d) notice of dispute has been received by the Operational Creditor or there is a record of dispute in the information Utility. [Provided the Adjudicating Authority shall, before rejecting an application under sub-section (c) of clause (ii) give a notice to the applicant to rectify the defect in his application within seven days of the date of receipt from the Adjudicating Authority.] 17. From the aforesaid provisions of law, it is clear that the Adjudicating Authority has to satisfy whether there is pre-existence of dispute prior to the receipt of Demand Notice or there is a record of dispute in the Information utility and in such case, the Adjudicating Authority shall reject the application. 18. The Hon ble Supreme Court upholding the above provisions of law clearly stated at paragraph-51 supra that the Adjudicating Authority must reject the application under Section 9(5)(2)(d) if notice of dispute has been received by the Appellant/Operational Creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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