TMI Blog2020 (10) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... y in the books of Sidana have been enclosed with the petition to show that debt of ₹ 2,20,116/- is outstanding and in default. It is discussed above that demand notice dated 20.08.2018 was sent by Sidana under Section 8 of the Code and notice of dispute was received vide letter dated 28.08.2018 - the notice cannot be treated as a notice of pre-existing dispute. There is no proposal for appointment of IRP and, therefore, the pendency of disciplinary proceedings pending against the proposed Resolution Professional does not arise. The conditions provided for in Section 9(5) (i) of the Code are satisfied in the present case - Application admitted - moratorium declared. - CP (IB) No. 361/Chd/Pb/2018 - - - Dated:- 10-2-2020 - Ajay Kumar Vatsavayi, Member (J) And Pradeep R. Sethi, Member (T) For the Appellant : Harsh Garg, Advocate For the Respondents : S. P. Sharma, Advocate and Arpit Jain, Practising Company Secretary JUDGMENT Pradeep R. Sethi, Member (T) 1. The instant application is filed by Sidana Enterprises (Sidana), a proprietorship firm through its sole proprietor Shri Gunit Pal Singh Sidana under Section 9 of the Insolvency and Bankruptcy Code, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018, Sidana was directed to file affidavit stating therein that the debit note of May, 2018 sent by Bhandari Hosiery was not received by Sidana and whether any purchase order was raised by Sidana for supply of goods. In compliance thereof, Sidana filed affidavit vide diary No.4541, dated 26.11.2018 stating that no debit note was ever received by Sidana and only an undated letter was received from Bhandari Hosiery in the month of June, 2018 and that Bhandari Hosiery only raised the orders for purchase of goods verbally and had never sent any written purchase orders. 5. Vide order dated 07.12.2018, notice of the petition to Bhandari Hosiery to show cause as to why the petition be not admitted was directed to be issued. 6. The reply was filed vide diary No.4723, dated 12.09.2019. In para 3 of the reply, it was stated that Sidana being a proprietorship concern has no locus-standi to file the present petition and that no suit can be instituted by a sole proprietorship concern in its name and since the petition is instituted in the name of the proprietorship concern, it was to be dismissed. Vide order dated 29.10.2019, it was concluded that the details given in Form 5 that the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application. 11. The facts of the present case are being examined with reference to the judgment of the Hon'ble Supreme Court (supra). 12. Admittedly, before issue of the demand notice dated 20.08.2018 under Section 8 of the Code, Bhandari Hosiery had sent an undated letter to Sidana in the month of June, 2018 stating as follows:- We had purchased some chemicals in past years from you. The said chemicals were found to be defective and with usage of this defective material, our fabric cloth became defective unusable. We inform you that you supplied us deliberately intentionally defective material causing great business loss to us. We had approached and apprised you number of times about the defective material supplied by you to us and about the losses caused to us. But you have never taken the matter seriously. Now we are debiting to your account of ₹ 2,15,753.00. So through this letter, we request you to approach the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 2,15,783/-. 17. In the undated letter received in June, 2018, Bhandari Hosiery has stated that the chemicals supplied were found to be defective and with usage of this defective material, the fabric cloth became defective and unusable. However, no evidence to support this contention has been filed. Moreover, the letter states that Sidana was apprised number of times about the defective material supplied and the losses caused, but no evidence in this regard has been adduced. 18. It has been pleaded by Bhandari Hosiery that Sidana has wrongly stated in its petition that the chemicals were supplied to Bhandari Hosiery on verbal order placed by the Directors. It is submitted that the copies of some of the invoices attached with the petition contained the number of the purchase orders. It is also submitted that it was agreed between Sidana and Bhandari Hosiery that in case of defective or inferior quality of chemicals, Sidana was either to replace the chemical or Bhandari Hosiery would not only hold the payment, but also deduct the total amount raised through various invoices for the defective chemical supply and for the losses suffered and that due to the aforesaid reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y was in respect of the petition being instituted in the name of the proprietorship concern. We have discussed above that this objection was considered and vide order dated 29.10.2019, opportunity was given to Sidana to rectify the defect in the application and the defect was rectified vide diary No.6135, dated 05.11.2019. The copies of invoices as well as the ledger account of Bhandari Hosiery in the books of Sidana have been enclosed with the petition to show that debt of ₹ 2,20,116/- is outstanding and in default. It is discussed above that demand notice dated 20.08.2018 was sent by Sidana under Section 8 of the Code and notice of dispute was received vide letter dated 28.08.2018. We have discussed that the notice cannot be treated as a notice of pre-existing dispute. There is no proposal for appointment of IRP and, therefore, the pendency of disciplinary proceedings pending against the proposed Resolution Professional does not arise. 24. The conditions provided for in Section 9(5) (i) of the Code are satisfied in the present case. We therefore, admit the application and direct the initiation of CIRP in the case of Bhandari Hosiery Exports Limited. Directions regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may act as an interim resolution professional; b) xxxxx 29. Sub-section (4) of Section 16 says that the Board shall, within ten days of the receipt of a reference from the Adjudicating Authority under sub-section (3), recommend the name of an insolvency professional to the Adjudicating Authority against 2whom no disciplinary proceedings are pending. 30. In this regard a letter bearing File No.25/02/2020-NCLT dated 07.01.2020 has been received from the National Company Law Tribunal, New Delhi forwarding therewith a copy of letter No. IBBI/IP/EMP/2019/01 dated 31.12.2019 along with the guidelines and the panel of resolution professionals approved for NCLT, Chandigarh Bench for appointment as IRP or Liquidator. The panel is valid for six months from 01.01.2020 to 30.06.2020. We Select Mr.Davinder Singh Gandhi appearing at Serial No.5 of the panel to be appointed as Interim Resolution Professional. 31. The Law Research Associate of this Tribunal has checked the credentials of Mr.Davinder Singh Gandhi and there is nothing adverse against him. In view of the above, we appoint Mr.Davinder Singh Gandhi, bearing Registration No.IBBI/IPA-001/IP-P00345/2017-2018/10646, 127, Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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