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2020 (2) TMI 635

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..... not used the Tata Steel as assured - while recovery bleeds the "Corporate Debtor" to death, resolution endeavours to keep the "Corporate Debtor" alive. If fact, the IB Code prohibits and discourages recovery several ways. The petition is dismissed on the ground of pre-existing dispute. - IA NO. 605 OF 2019, C.P. (IB) NO. 16/NCLT/AHM/2019 - Dated:- 20-11-2019 - Ms. Manorama Kumari, Judicial Member And Chockalingam Thirunavukkarasu, Technical Member Dr. Kamlesh Vaidankar and Ms. Nilu Vaidankar, Advs. for the petitioner. Anip Gandhi, Manish Shah and Raju Kothari, Advs. for the Respondent. ORDER Ms. Manorama Kumari, CP(IB)No. 16/2019, was filed by Zeus Engitech Private Limited, the Operational Creditor (Petitioner) under section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "Code" read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authorities) Rules, 2016 seeking initiation of Corporate Insolvency Resolution Process against Aswad Engineering Private Limited (hereinafter referred to as "Corporate Debtor") having registered office at 258/1, Jugaldas Estate, Nr. Idgah Chowki, Outside Prem Darw .....

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..... or the said dues, however, the aforesaid dues remained unpaid. The Operational Creditor has annexed with the Petition, copy of the email conversation between the Operational Creditor and the Corporate Debtor as Exhibit N. The Operational Creditor has also annexed with the Petition, statement of Bank Account showing the amounts raised on the Corporate Debtor and the amounts received from the Corporate Debtor and marked as Exhibit E. 7. On receipt of the notice, the Corporate Debtor appeared and filed his written reply/objections denying the statement made in the application. 8. It is stated by the Corporate Debtor that Operational Creditor, coming to know about the reputation of Corporate Debtor, approached the Corporate Debtor/respondent in search of work. During the relevant period, the Corporate Debtor was having the project of "Songadh Digamber Jain Temple", Bhavnagar for installing the statue of "Lord Sri Bahubali Swami" having weight of more than 250 tons at a height of 30 meters, for which fabrication work of making steel cage, was on hand of the Corporate Debtor, as such, the Petitioner was shown the place and statue. After examination, the Operational Cr .....

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..... earing of the Petition, the Corporate Debtor filed an IA being numbered as IA No. 605 of 2019, with following prayers: (a) To dismiss the present C.P. (IB) No. 16/9/NCLT/AMD/2019 and impose penalty upon the opponent - Zeus Engitech Pvt. Ltd. in exercising power under section 65 of the insolvency and Bankruptcy Code, 2016, read with Rule 11, of the National Company Law Tribunal Rules, 2016. (b) To award cost in favour of the Petitioner. (c) To grant such other and further relief(s) as deemed fit and proper by this Tribunal in the interest of justice. 13. The Corporate Debtor, by way of filing the IA drew the attention of this Adjudicating Authority with regard to the filing of false affidavit by which the Operational Creditor has stated inter alia that Corporate Debtor is liable to pay interest @18% per annum on outstanding dues as per the terms of the invoices. 14. It is stated by the Corporate Debtor that Operational Creditor undertook the assignment for a total amount of ₹ 32,00,000/- including all taxes, as telephonically agreed, however, the Operational Creditor has raised the invoices excluding GST. 15. It is further stated by the Corporate Debtor that false affidavit is .....

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..... d operational debt in relation to such dispute? If any of the aforesaid conditions is lacking, the application would have to be rejected. 20. While going through the records, it is found that it is also an admitted position, that Operational Creditor could not provide quality steel cage along with other accessories to the Corporate Debtor as assured on or before the fixed date i.e. 18.04.2018, for the performance of religious ceremony of installation of the idol of Lord Sri Bahubali Swami, consequent upon which during the trial run, suddenly the loud noises started from the cage and therefore, to avoid any mishappening, the respondent had to stop lifting and installation work. Therefore, the entire program of the Temple Management had failed and postponed in presence of huge gathering. The said incident also published in the newspaper, the proof of which is filed by the Corporate Debtor. Because of poor quality work by the Operational Creditor, the Corporate Debtor had to face loss of ₹ 50.00 lakh apart from loss of goodwill and name and fame as claimed. 21. It is also a fact that Corporate Debtor demanded ₹ 10,00,000/- back from the Operational Creditor but instead of .....

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..... ages recovery in separate ways, therefore, there is no substance in the pleading so put forward by the Petitioner. Recovery is an individual effort by a creditor to recover its dues. I B Code cannot be allowed to be used for recovery purpose and or for arm twisting method, so as, to bring the death of Corporate Debtor which is a going concern consisting of several employees and workmen whose daily bread is dependent on the outcome of CIRP when admittedly there is pre-existing dispute. Hon'ble Supreme Court in Mobilox case (supra) has categorically observed that "Therefore, all that the Adjudicating Authority is to see at this stage is whether there is a plausible contention which require 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 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 fa .....

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