TMI Blog2020 (3) TMI 1251X X X X Extracts X X X X X X X X Extracts X X X X ..... erational-creditor has been paid within ten days of the receipt of the demand notice. Therefore on the basis of aforesaid provision, we are of the view that Section 8 and 9 cast a duty upon the operational-creditor as well as CD to act as per Section 8 and if they fail to fulfil the conditions of Section 8 and 9 then in that case neither the application filed by the operational-creditor is maintainable nor the plea of existing of disputes or the payment of debt subsequently taken by the CDs can be taken into consideration. In the present case, since it is specifically mentioned in Section 8(2) that within ten days from the date of the receipt of the demand notice, the corporate-debtor is required to bring to the notice of the operational-creditor, the existence of dispute or the documents regarding the payment of debt, therefore, we have no option, but to hold that since the corporate-debtor fails to give the reply of the demand notice and raised the disputes, hence after his appearance in response to the notice, he cannot raise it by filing the reply to the application filed on behalf of the operational-creditor. Thus, there is no force in the contention raised on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor citing temporary liquidity issues who promised to release the payments timely in the future. The operational-creditor accommodated the corporate-debtor and continued to supply the goods relying on the promise (to pay) of the corporate-debtor in good faith. 8. During the financial year 2018-19, the operational-creditor had made a total sales of INR 2,69,08,329.75 (Rupees Two Crore Sixty Nine Lacs Eight Thousands Three Hundred Twenty Nine and Seventy Five Paise) to the corporate-debtor. 9. The corporate-debtor made random payments, although delayed, only to the rune of INR 2,47,81,295 (Rupees Two Crore Forty Seven Lacs Eighty One Thousands Two Hundred and Ninety Five) and therefore a sum of INR 21,27,034.75 (Rupees Twenty One Lacs Twenty Seven Thousand Thirty Four Rupees and Seventy Five Paise) remain overdue and unpaid till date. 10. A total of 3 invoices have remained unpaid till date and have not been paid by the corporate-debtor, even though the goods qua the above invoices have been delivered to the satisfaction of the corporate-debtor. The details are as under: Invoice No. Date of Invoice Amount (INR) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner the corporate debtor continues to be in default as regard to payment of the sum of INR 21,27,034.75 (Rupees Twenty One Lacs Twenty Seven thousand thirty four rupees and seventy five paise) along with 18 per cent interest from the date of each unpaid invoice as the corporate debtor has miserably failed to make payment for the goods. 19. The corporate-debtor in pursuant of the notice appeared and filed a reply. The facts of the reply is that: i. The application filed by them, operational-creditor is not maintainable. ii. The applicant is a proprietorship firm acting through its proprietor by Shipra Somani, however, Mr. Arun Somani husband of Shipra Somani, the key persons, and looks after the day to day business of the applicant. iii. Further, the applicant is facilitator in between the actual manufacturer/supplier and the respondent company during the financial year 2018-19, respondent purchased the textile goods/articles worth Rs/-26908329 through the applicant. The last sale/purchase transactions took placed on 28th February 2019. iv. Further, the applicant through its e-mail IDs jailaxmitraders2019@gmail.com mayanklakhotia15@gmail.com have time and again s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tia15@gmail.com' sent an email to the respondent stating that against the payment of ₹ 25,00,000/- amount of ₹ 47,54,016.75/- stands settled. Applicant also promised that after receiving the cheques, applicant will send the credit note of balance amount of ₹ 22,54,016.75/- through courier to the respondent. Copy of the email dated 24.05.2019 sent by the applicant to respondent is annexed as ANNEXURE-6. ix. That however on 24.05.2019, accountant of the respondent again spoke to the Mr. Arum Somani of the applicant firm over the telephone and apprised the applicant about the difference of ₹ 1,39,000/- which was found during the reconciliation of accounts. It is submitted that the difference of ₹ 1,39,000/- in the accounts of the parties arose as applicant didn't take note of (1) Debit Note of ₹ 1,23,916/- generated against the return of goods, (2) The amount of ₹ 6,000/- deducted towards the non-supply of advance shipping Note, (3) ₹ 9084/- deducted towards rounding off the balance amount, which stood debited in the books of the respondent. x. That the amount of ₹ 3,61,000/- as agreed after deducting ₹ 1,39,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or communication from the applicant. xviii. Further, the facilitator has also categorically admitted that no settlement was ever discussed by the corporate-debtor on behalf of the applicant and the corporate-debtor has concealed the communications with the facilitator which are subsequent in dates to communication and he referred the communication which the corporate-debtor referred in its reply as Annexure 3 to this. xix. Further, the applicant had send a legal notice dated 29.07.2019 and statuary demand notice under the IB Code dated 06th August 2019 annexed as ANNEXURE A-5 A-6 respectively to the application and both of which were left un replied by corporate-debtor. Furthermore, the corporate-debtor has till date never requested for any credit note in respect of the alleged settlement. xx. In support of its contention of the corporate-debtor, applicant has also enclosed the whatsapp communications between the two. 20. Heard the counsel for the applicant as well as corporate-debtor and perused the reply and rejoinder filed on behalf of the parties as well as document enclosed with the applications, reply and rejoinder. 21. Learned counsel appearing for the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extract the money from the respondent, which has already been settled by Arun Somani. 31. He further submitted that the present proprietorship firm is though registered in the name of Shipra Somani wife of Arun Somani but in fact it is being run by the Arun Somani, who sent the invoices to the respondent through its e-mail on 20th February 2019, 19th February 2019, 15th February 2019, 7th February 2019 and 5th January 2019. 32. He further submitted that the alleged debt of Rs/-21,27034.75 has already been settled by the CD in terms of the settlement proposed by the Arun Somani through the whatsapp and he placed reliance upon the whatsapp chat between the Arun Somani and the CD. 33. He further submitted that in terms of settlement Arun Somani promised to issue credit note against the balance amount of Rs/- 25 Lacs and the respondents had accepted the settlement on 24th May 2019 and sent the photo copy of the cheques and Arun Somani through the whatsapp message informed that the account has been settled. 34. He further submitted that the applicant through its e-mail ID mayanklakhotia15@gmail.com sent an e-mail to the respondent stating against the 25 Lacs amount of Rs/- 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice. He further submitted that even if no reply to the demand notice is given, if the CD is able to establish the pre-existing disputes, that can be looked into even if no reply of the demand notice is given. 44. In the light of that submissions, when we have gone through the demand notice sent by the operational-creditor, then we find, demand notice was sent through its proprietor Ms. Shipra Somani and not in the name of M/s. Jai Laxmi Traders. Therefore, the contention of the applicant that since it was sent in the name of proprietorship firm, therefore, it is not the proper demand notice is not correct rather we are of the view that since it was sent through the Shipra Somani, hence it is maintainable and same is a demand notice under Section 8(1) of the IB, Code. 45. Now we shall consider this submission of CD, if no reply to the demand notice is sent and if after appearance of the CD any reply is filed on behalf of the CD raising the pre-existing disputes in that case that can be taken into considerations. 46. To answer this submission, we would like to refer the provisions contained under Section 8 and 9 of the IB, Code and same is quoted below: Section: 8. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no payment of an unpaid operational debt 1[by the corporate debtor, if available;] 2[(d) a copy of any record with information utility confirming that there is no payment of an unpaid operational debt by the corporate debtor, if available; and (e) Any other proof confirming that there is no payment of any unpaid operational debt by the corporate debtor or such other information, as may be prescribed.] (4) An operational creditor initiating a corporate insolvency resolution process under this section may propose a resolution professional to act as an interim resolution professional. (5) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order- (i) Admit the application and communicate such decision to the operational creditor and the corporate debtor if, - (a) The application made under sub-section (2) is complete; (b) There is no 3[payment] of the unpaid operational debt; (c) The invoice or notice for payment to the corporate debtor has been delivered by the operational creditor; (d) No notice of dispute has been received by the operational creditor or there is no record of dispute in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not sent the demand notice as required under Section 8(1) of the IB, Code, then he cannot invoke the provision under Section 9, rather he can invoke the provision of Section 9 only, when CD fails to raise the existing of disputes or place the document to show that unpaid operational-creditor has been paid within ten days of the receipt of the demand notice. Therefore on the basis of aforesaid provision, we are of the view that Section 8 and 9 cast a duty upon the operational-creditor as well as CD to act as per Section 8 and if they fail to fulfil the conditions of Section 8 and 9 then in that case neither the application filed by the operational-creditor is maintainable nor the plea of existing of disputes or the payment of debt subsequently taken by the CDs can be taken into consideration. 48. At this juncture, we would like to refer the decisions upon which CD placed reliance. 49. We have gone through the decisions in which the CD placed reliance, and we find, in none of the judgments, Section 8 has been discussed, therefore, we are unable to accept the contention of the learned counsel appearing for the applicant that even if reply of the demand notice is not given, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debt, therefore, we have no option, but to hold that since the corporate-debtor fails to give the reply of the demand notice and raised the disputes, hence after his appearance in response to the notice, he cannot raise it by filing the reply to the application filed on behalf of the operational-creditor. 53. Now, coming to the other submissions raised on behalf of the learned counsel appearing for the corporate-debtor, who in course of arguments submitted that by whatsapp message, there was a settlement of the accounts and in view of that nothing is due. 54. In the light of this submission, we have gone through the whatsapp message enclosed with the reply filed on behalf of the respondent. At this stage, we would also like to refer the whatsapp message enclosed with the rejoinder filed by the petitioner, which are from page 39 to 41 and when we shall read the text whatsapp message together then we find, there is no settlement agreement in between the parties regarding the settlement of the outstanding dues, which the operational-creditor has claimed in the application, rather on the basis of that, it can be said that CD has admitted that the amount, which the operational-cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... session of the corporate debtor. (2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period. (3) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. (4) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process. 58. Since the operational-creditor has not proposed the name of the IRP, therefore, we appoint Mr. Anand Sonbhadra (Email -sonbhadra65@gmail.com) from the list submitted by the IBBI and accordingly, Mr. Mr. Anand Sonbhadra is appointed as IRP. He shall take such other and further steps as are required under the statute, more specifically in terms of Section 15, 17 and 18 of the Code and file his report within 30 days before this Bench. 59. The Operational Creditor is directed to deposit the fee of ₹ 2,00,000/- to meet the immediate expenses of the IRP within two weeks. The same shall be fully accountable by the IRP and shall be reimbursed by the CoC, to ..... 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