TMI Blog2020 (6) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... btor at page 187 which showed that full installation was yet to be completed (see page 188) - Only by observing that the respondent-corporate debtor have not come forward to dispute the application would not be sufficient to initiate CIRP, if the record already showed existence of dispute. Considering the voluminous records showing pre-existing disputes between the parties, there is no fault found with the affidavit filed by the authorized representative of the operational creditor as at page 495 of which paragraph 5 we have reproduced earlier. Although the Adjudicating Authority had specifically asked for the correspondence, it can be seen that the authorized representative Mr. Rahul Gupta resorting to articulate wordings avoided placing on record the correspondence claiming that presently the communication is not retrievable . Starting of the CIRP against a functional company is a serious matter and parties cannot be allowed to play hide and seek - We propose to impose heavy costs on the operational creditor as well as Mr. Rahul Gupta. The initiation of the corporate insolvency resolution process against the corporate debtor is quashed and set aside - We release the corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Adjudicating Authority that the corporate debtor gave no reply to the demand notice and also claimed that there was no dispute of unpaid operational debt raised by the corporate debtor. The operational creditor claimed debt of ₹ 2,82,48,963 along with interest to be in default. 3. The impugned order shows that the Adjudicating Authority directed operational creditor on July 9, 2018 to put on record documents to reconcile the amount of the invoices enclosed with the petition with the amount of the invoices shown in the demand notice. The operational creditor placed on record completion certificate with financial statements of operational creditor for the purpose and claimed that there was no mismatch of the amount. The Adjudicating Authority by order dated October 26, 2018 issued notice of the petition (application) to the corporate debtor. Subsequently, Rahul Gupta, authorized representative of the operational creditor filed compliance affidavit dated December 29, 2018 to show service of notice on the corporate debtor on address mentioned as per master data and that notice was also sent by e-mail address as reflected in the master data of the corporate debtor. The Adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debtor appreciated the fast work done to complete by the deadline of December 31, 2014 but later on it had found that there were other pending works including bad quality of work done by the operational creditor to complete the project, which were pending and were to be completed by December 31, 2014. The e-mail gave details in this regard. Learned senior counsel for the appellant submitted that when such document was already before the Adjudicating Authority, it was apparent that there was prior existing dispute and the application should have been rejected. Learned senior counsel also referred to order dated July 9, 2018 of the Adjudicating Authority (copy of the which is at annexure 46) which reads as under : Learned counsel for the petitioner seeks time to place on record completion certificate and also to submit further clarification regarding the amount of sundry creditors shown by the respondent in balance-sheet. The above affidavit with documents to be filed by the petitioner shall also state whether there is any other correspondence between the parties relating to the completion of the project apart from the documents annexed with the petition and also to reconcile th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which are detailed at page No. 21 of the application, the raising of discontent by the corporate debtor against the commissioning of project is purely an afterthought and a spurious plea. In order to substantiate the view of the operational creditor put on reliance the apex court judgment in the matter of Mobilox Innovations P. Ltd. v. Kirusa Software P. Ltd. [2017] 205 Comp Cas 324 (SC) relevant paragraph being 19 and 37. Copy of the said judgment is annexed herewith and is marked as annexure A3. (emphasis supplied) It is argued that hiding behind words like presently not retrievable , the operational creditor suppressed the correspondence showing pre-existing dispute, which was available in computers. 6. It is argued by learned senior counsel for the appellant that the e-mail (annexure 15 pages 152 at 153) shows that on March 16, 2015 itself, the corporate debtor had conveyed to Rahul Gupta and others that the operational creditor had failed to fulfil its commitments and there was very poor work done at the site and that the main cause is not grid issue but the issue was everywhere and that the operational creditor was running away from its responsibilities. Such e-mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Companies as registered office of the corporate debtor which was asset of the said firm which stood transferred to Dushyant Tyagi. The appeal claims that relationship between Mr. Jagdish Parshad Singal and Mr. Tyagi strained. It is claimed that the notice under section 8 was served on e-mail of the then director. The operational creditor did not serve the petition and paper book on said e-mail address. It is mentioned that the operational creditor served papers on the registered address of the corporate debtor but the same was no longer being used under the control of corporate debtor. 8. Against the claims made by the appellant, learned counsel for operational creditor referred to invoices raised (as at pages 331 and 332 of the appeal) and argued that the installation project has been completed. Learned counsel referred to the completion certificate issued by operational creditor (page 501) and submitted that on April 19, 2015, the certificate of appreciation was issued by the corporate debtor. The argument is that within the time frame as per the agreement, the installation of the project had been completed and the promoters and management of corporate debtor had apprecia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appreciation dated April, 2015 issued and claims that once completion certificate had been issued, corporate debtor could not raise issues with regard to the quality of the work done. In fact, the record shows that there had been even a review meeting between the operational creditor and the corporate debtor and excerpts of which minutes have been placed on record by the corporate debtor at page 187 which showed that full installation was yet to be completed (see page 188). There was also discussion regarding Sag Structure Correction Action Plan. In fact, there is annexure 24 showing the experts enquiry on May 5, 2015 as to when the plant would be declared fully commissioned so that they could start electrical review of the project. Looking to such material on record, it is quite clear that there was pre-existing dispute regarding installation as well as operation of the project. When this is so, the section 9 application could not have been admitted. In fact, when e-mail dated October 20, 2016 (page 431) was already before the Adjudicating Authority and it had also noticed the same, the Adjudicating Authority should have found pre-existing dispute and section 9 application shou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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