TMI Blog2018 (4) TMI 1782X X X X Extracts X X X X X X X X Extracts X X X X ..... ived by the operational creditor or there is a record of dispute in the information utility. Petition rejected. - Company Petition no. (IB)- 94 (PB) / 2018 - - - Dated:- 24-4-2018 - Chief Justice (Rtd.) M.M. Kumar, Hon'ble President, S. K. Mohapatra, Hon'ble Member (T) For Applicant: Mr. Piyush Kaushik, Advocate For Respondent: Mr. Sumesh Dhawan, Advocate Ms. Vatsala Kak, Advocate ORDER S. K. Mohapatra, 1. This is an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (for brevity 'the Code') read with rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rule, 2016 (for brevity 'the Rules') with prayer for initiation of Corporate Insolvency Resolution Process in respect of Respondent M/S D-Art Furniture Systems Private Limited, referred to as the corporate debtor. 2. The Respondent M/S D-Art Furniture Systems private limited, against whom initiation of Corporate Insolvency Resolution Process has been prayed for, is a company incorporated on 24 th January, 2002 under the companies Act, 1956 having its registered office at 1-107 A Kirt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eaving a balance amount of ₹ 61,70,161/- to be paid to the Operational Creditor, which included an amount of ₹ 5,32,262/- against TDS deductions. The Corporate Debtor has subsequently deposited the said TDS amount as such there remains an amount of ₹ 56,37,899/- due and payable towards principal. In support of the contention true copy of the ledger account maintained by the operational creditor has also been placed on record. 7. It is claimed that despite successful completion of the contract by operational creditor to the satisfaction of the corporate debtor, the outstanding arnount was not paid. It is stated that corporate debtor vide communication dated 13.11.2013 while acknowledging the amount payable, assured the applicant that the payment shall be made very soon. The operational creditor in his last visit in January 2016, made it clear to the corporate debtor that in case payment is not received by 31 st March 2016 operational creditor will proceed against the corporate debtor as per law. As nothing was heard from corporate debtor the operational creditor was constrained to send statutory notice dated 13.04.2016 under Section 433 (e) and 434 (1) (a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecords. 12. Dispute has been defined under the Code in Section 5 (6) which envisages that: (6) dispute includes a suit or arbitration proceedings relating to- (a) the existence of the amount of debt; (b) the quality of goods or service; or (c) the breach of a representation or warranty 13. It is no longer Res-lntegra that the definition is inclusive and not exhaustive. Dispute has been given wide meaning so as to cover all disputes on debt, default etc. and not be limited to only pending suit or a record of a pending arbitration. Hon ble Supreme Court in matter of Mobilox has observed that the moment there is existence of a dispute, the operational creditor gets out of the clutches of the code. 14. In the present case the respondent has not admitted the claim amount with the contention that overpayments have been made to the applicant. Accordingly it is the emphasised that in the year 2013 respondent had called upon the applicant to reconcile the accounts. 15. The letter of respondent dated 13 th November 2013 placed on record by the applicant itself is reproduced below; Dated 13.11.2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the defective quality of the DG sets and also the nature of loss caused on that amount. 6. Without prejudice to the aforesaid, the amount claimed by your Client is not due and payable by our Client. Infact, it is a matter of record that our Client has, time and again disputed payment of the said amount. 7. It is an admitted position that initially, the contract was for ₹ 1,62,49,360/- (Rupees One Crore Sixty Two Lakh Forty Nine Thousand Three Hundred and Sixty only) and later on the contract value was increased to ₹ 1,93,20, 620/(Rupees One Crore Ninety Three Lakh Twenty Thousand Six Hundred and Twenty only). Further, admittedly our Client had paid an amount of ₹ 2,04,42,412/- (Rupees Two Crore Four Lakhs Forty Two Thousand Four Hundred Twelve only). For the said reason, our Client was insisting for the reconciliation of the account as your Client has illegally raised separate invoices for diesel, whereas, the cost of the diesel was included in the total contract value. Your client has deliberately raised separate invoices for diesel, which, were not in terms of the contract and you assertion that there was separate arrangement is completely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst time to evade the liability. It is not a case of subsequent repudiation of claim only in the reply filed by the respondent. The documents on record clearly show that dispute was raised by respondent prior to the demand notice issued under section 8 (1) of the Code. Once there is material to believe that dispute exists in the facts of the case, it is right to have the matter tried out before the axe, in the form of corporate insolvency resolution process, falls. 22. It is pertinent to refer here the observation of Hon ble Supreme Court in the case of Mobilox Innovative Pvt. Ltd. Vs. Kirusa Software Pvt. Ltd. in civil appeal No. 9405 of 2017 vide order dated 21.09.2017 that: Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which required further investigation and that the 'dispute' is not a patently feeble legal argument 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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