TMI Blog2020 (9) TMI 1035X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Since the Corporate Debtor has accepted the supply pending payment relating to these 30 vehicle trackers; hence it is an admitted Operational Debt. Whether the application filed under Section 8 of the IBC, 2016 for the relevant operational debt is within limitation? - HELD THAT:- It is for the Resolution Professional and the Committee of Creditors to consider all these claims received in the process of CIRP. We also hope that the stakeholders as well as the IRP and COC shall keep in mind that the IBC is a beneficial legislation which is not meant to put going concerns/entities in resolution for small acts of commission or omission which can be rectified - The Corporate Debtor has raised the issue of not been accorded an opportunity to advance oral arguments by the Ld. Adjudicating Authority on the date of final hearing i.e. 06.12.2019. It is seen by us that the Ld. Adjudicating Authority has, in the interest of adhering to timelines given in IBC, considered the oral arguments made by the Ld. Counsel of the Corporate Debtor made on the previous date of hearing. He has decided to close the arguments on 06.12.2019 and pass the final judgment in the case after taking into accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the project, the Appellant works with several vendors for the supply and installation of GPS trackers among other things. Respondent No.1 is one such vendor, who used to work with the Appellant (Corporate Debtor) in accordance with the Master Service Agreement. (3) As a result of work assigned to the Respondent No. 1 Operational Creditor, various transactions took place between the Appellant Corporate Debtor and the Operational Creditor. These transactions related to payment for supply and installation of GPS vehicle trackers. The transactions in question are as follows: (1) One such transaction in this case relates to supply and installation of 804 vehicle trackers and managing their services for which an amount of ₹ 50,32,028/- was payable to the Operational Creditor by the Corporate Debtor as claimed by the Operational Creditor. This transaction is confirmed by Corporate Debtor vide email dated 15.10.2015 which has statement of account attached mentioning payment due for 804 vehicle trackers. (2) Another transaction in question relates to 30 nos. Hippo GPS vehicle trackers (without SIM) including installation, configuration and setup for which purchase order vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Operational Creditor against these supplies. The Operational Creditor has also given details of certain TDS deductions for Assessment Year 2015-16 of an amount of ₹ 4,89,073/- and a copy of Form 26AS of the Operational Creditor for the Assessment Year 2016- 17 confirming TDS deduction of an amount of Rs,1,01,455/-. 5. The case was heard by the Adjudicating Authority (NCLT, New Delhi, Bench V) which delivered its judgment on 23.1.2020. In brief, the Adjudicating Authority has inferred that an amount of ₹ 3,67,200/- in respect of payment for supply and installation of 30 nos. of vehicle trackers has not been paid by the Corporate Debtor, which is evident from the certificate issued by Axis Bank. The Adjudicating Authority has also found that the application under Section 9(2) of IBC 2016 is complete and at least a default of ₹ 3,67,200/- is admitted by the Corporate Debtor that has not been paid which is in limitation. On this basis, the Appellate Authority has admitted the application of the Operational Creditor and directed for initiation of CIRP of the Corporate Debtor and the Interim Resolution Professional has also been appointed vide the same judgment. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se contentions are fulfilled then the Adjudicating Authority has no option but to admit the application of the Operational Creditor. He has also contended that an amount of ₹ 3,67,200/- has already been paid by the Corporate Debtor to the Operational Creditor after the order dated 03.02.2020 of Hon ble NCLAT and insofar as the claim of ₹ 50,32,028/- is concerned it is barred by limitation. It is claimed by the Learned Counsel for Appellant that the application under Section 9 of IBC was filed on 12.12.2018, whereas purportedly the claimed debt amount in default is based on e-mail dated 15.10.2015. Therefore, the petition is also barred by limitation with respect to the default amount claimed in the demand notice. 9. The Ld. Counsel of Appellant has argued that while the demand notice relates to the default in respect of ₹ 50,32,028/- with respect to the supply of 804 GPS Vehicle Trackers, there is no whisper of default of ₹ 3,67,200/- with respect to the supply of 30 Hippo GPS Vehicle Trackers in the demand notice. He has also controverted the claim of the Operational Creditor that both the claims were part of the continuous business dealing between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent no. 1 has argued that the transactions between the Appellant and the Respondent no. 1 have been maintained as a running account wherein the Respondent no. 1 has supplied a total of 834 GPS vehicle trackers pursuant to the MOU dated 21.05.2013 for the HPFS project. He has contended that the last supply was of 30 vehicle trackers vide purchase order dated 12.12.2015. The Appellant Corporate Debtor has admitted the supply of 30 vehicle trackers and also the receipt of invoice for the same vide his reply to the Demand Notice. Regarding the existence of a dispute in connection with supply of 804 vehicle trackers the Ld. Counsel for Respondent No. 1 has claimed that the Corporate Debtor has raised a dispute for the first time after receipt of demand notice dated 20.11.2018 and has not produced any evidence before the Adjudicating Authority regarding pre-existence of this dispute. It is the claim of the Learned Counsel for Appellant that the application under Section 9 of IBC was filed on 12.12.2018, whereas the claimed amount of debt in default is based on e-mail dated 15.10.2015. Therefore, the petition is barred by limitation with respect to the default amount claimed in the deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tlement with the Corporate Debtor and has not accepted ₹ 3,67,200/- as settlement amount from the Corporate Debtor. 13. We have perused the status report regarding the progress of the Corporate Insolvency Resolution Process (hereinafter called CIRP) submitted by the Interim Resolution Professional. The main points to be noted from the report are that the constitution of the Committee of Creditors (COC) has been put on hold in compliance of the order dated 03.02.2020 of the Hon ble NCLAT in the present appeal and of the submission of claim amounting to ₹ 95,37,288/- by the Operational Creditor which includes supply of 804 vehicle trackers even though no documents such as purchase or delivery order for these vehicle trackers has been submitted by the Operational Creditor in support of its claim and another claim filed by a financial creditor State Bank of India, Hyderabad of ₹ 12,66,000/-. These claims are yet to be considered by the Interim Resolution Professional and the Committee of Creditors. 14. In addition to the appeal memo, the reply of the Respondent No. 1 and the Written Submissions of the Appellant and Respondent No. 1 and the Status Report of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount of default. In this light a perusal of the Demand Notice dated 20.11.2018 sent by the Operational Creditor (Respondent No. 1) as required under Section 8 of the IBC, 2016 shows the total amount of debt as ₹ 50,32,028/- in Column 1 of the notice which is payable to the Operational Creditor by the Corporate Debtor for supply and installation of 804 vehicle trackers. In the same column 1 this amount is shown as due on the basis of an email dated 15.10.2015 of the Corporate Debtor addressed to the Operational Creditor for supply and installation of 804 vehicle trackers and payment of commission and managed and professional services. The entries in column 1 of the demand notice also mention issuing of purchase order dated 11.12.2015 (revised on 12.12.2015) for 30 nos. Hippo GPS vehicle trackers without sim including installation, configuration and setup of an amount of ₹ 12,000/- each.Therefore, there are two amounts mentioned in Form 3. One pertains to supply of 804 vehicle trackers and the other to supply of 30 vehicle trackers. 18. It is now to be seen whether both or any of the two purported supplies of 804 vehicle trackers and 30 vehicle trackers are operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce given by the corporate debtor relating to a dispute of the unpaid operational debt; (c) a copy of the certificate from the financial institutions maintaining accounts of the operational creditor confirming that there is no payment of an unpaid operational debt by the corporate debtor; if available; (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 an unpaid operational debt by the corporate debtor or such other information, as may be prescribed. 19. It is clear from a reading of Section 8(1) that the demand notice or copy of invoice has to be sent by the operational creditor in the prescribed format for unpaid operational debt on occurrence of default in repayment or copy of an invoice demanding payment of the amount involved in the default. The Explanation with Section 8 explains Demand Notice to mean a notice demanding payment of the operational debt in respect of which the default has occurred. Thus is it clear that the demand notice and later the application under Section 9 of IBC should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 30 nos. GPS vehicle trackers. He has produced the purchase order, supply and installation of 30 nos. Hippo GPS vehicle trackers as part of ongoing business transactions between the Corporate Debtor and the Operational Creditor. The Corporate Debtor, in his reply dated 03.12.2018 to the Demand Notice, has accepted placing purchase order of 30 nos. GPS vehicle trackers and receiving the supply. Since the Corporate Debtor has accepted the supply pending payment relating to these 30 vehicle trackers; hence it is an admitted Operational Debt. 22. Now turning to the issue of limitation as mentioned in Para 15(ii) of this judgment (supra). The application filed by the operational creditor under Section 9 of the IBC claims an operational debt of ₹ 53,99,228/- which comprises of two orders viz. for 804 vehicle trackers for ₹ 50,32,028/- and for 30 vehicle trackers for ₹ 3,67,200 (total amount ₹ 53,99,228/-). The claim of the Operational Creditor (Respondent No. 1) that there were continuous business dealings between the Corporate Debtor (Appellant) and Operational Creditor (Respondent No. 1) and therefore the payments are also a continuous process and hence th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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