TMI Blog2020 (10) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... THAT:- There are no dispute as required under Section 8(2) of the IBC, 2016 has been raised, after receiving the demand notice, therefore, I am unable to accept the contention of the Corporate Debtor that there is a pre-existing dispute between the parties prior to the delivery of the demand notice even after receiving the demand notice no such issue was raised in the reply sent by the Corporate Debtor to the Operational Creditor. Hence, I find, no force in the contention raised by the Corporate Debtor - the amount is still due and there is default and Corporate Debtor is liable to pay that amount. The application under section 9(2) of the Code is complete, at least default of ₹ 3,67,200/- is admitted by the Corporate Debtor and that has not been paid. It is established by the certificate issued by the Axis Bank which is at page number 280 Annexure 19. Hence, there is no payment of unpaid operational debt, the demand notice has been delivered by the Operational Creditor, no notice of dispute has been raised and the amount is more than 1 lakh. Since these contentions are fulfilled then the Adjudicating Authority has no option but to admit the application of the Operational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n after netting off on-account payments received. 3. As per the averments of the Operational Creditor, the Corporate Debtor's emails dated 29.09.2015 containing Form 16A confirming the TDS deduction for the Assessment Year 2015-16 of an amount of ₹ 4,89,073 and copy of Form 26AS of the operational Creditor for the Assessment Year 2016-17 confirming the TDS deduction of an amount of ₹ 1,01,455; confirms and establishes that the Corporate Debtor owes the outstanding payment to the Operational Creditor towards its legitimate dues for supply of goods and services made by the Applicant to the Corporate Debtor from time to time. 4. The Operational Creditor further submitted that in the aforesaid facts and circumstances and from the admission on the part of Corporate Debtor itself, it is evident that it is liable to pay to the Operational Creditor an amount aggregating to ₹ 53,99,228/- along with interest at the rate of 18% per annum till the date of actual payment. 5. The Operational Creditor issued the demand notice dated 20.11.2018 as required under Section 8 of the Code, demanding a total sum of ₹ 53,99,228/-. In response to the aforesaid Demand no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditor as was required of them as per the agreed terms. d. On a perusal of the Master Service Agreement, it is evident that the scope of services includes supply, installation and commissioning of such GPS trackers. In terms of the aforesaid Master Service Agreement, the Petitioner is required to supply, install and commission the tracker system. 8. The Operational Creditor has filed its rejoinder and has asserted the following contentions: a. It is submitted that the Operational Creditor and the Corporate Debtor entered into a Memorandum of Understanding dated 21.05.2013. It is submitted that the Corporate Debtor under the guise of 'Company Affiliate' made the Operational Creditor to execute Master Service Agreements with distillery production line equipment suppliers to provide back office support systems and uniform maintenance and managed services. It is submitted that the Corporate Debtor executed Managed Services Agreement with the Operational Creditor for providing through its employees and third party contractors, HPFS managed services in support of HPFS information technology infrastructure in the project sites and premises of beverage corporation depots ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ma Invoices/Invoices/Way Bills/Ledger Account Statements/Bank Payments/TDS Deductions/TDS Deposits with Income Tax Department etc., pertains to supply of 804 nos. GPS trackers by the Operational Creditor, now trying to take false, untenable and fanciful contentions to create spurious dispute that are put to strict proof and such false pleas are taken in order to create false defence under the guise of misconceived dispute, knowing the imminent order of Corporate Insolvency Resolution Process under IBC. 9. The Corporate Debtor has filed its sur-rejoinder in response to the rejoinder filed by the Operational Creditor and has asserted the following contentions: a. It is submitted that the documents submitted by the Petitioner are not only incomplete but also pertain to the transactions for which there is an existing dispute between the parties as the Petitioner, who was one of the vendors of the Respondent and its other consortium partners, has not discharged its contractual obligations. b. It is submitted that the Petitioner has suppressed material facts while filing the present petition before this Hon'ble Tribunal and did not enclose all the relevant documents in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at an amount of ₹ 46,82,325/- is recoverable from the vendors and not from the Respondent. Therefore, it can be said that the Petitioner was if at all entitled to get an amount of ₹ 7,16,903/- from the Respondent. It is further pointed out that the statement attached with the petition is not a final statement and the statement itself states that the final values to be arrived. It clearly shows the malafide and malicious intention of the petition to extract monies from the Respondent. f. It is further submitted that the Petitioner vide its demand notice dated 20.11.2018 raised a demand of ₹ 50,32,028/-with respect to 804 GPS tracking systems, which is apparently time barred. It is a settled law that Limitation Act is applicable to the applications filed u/sec. 7 and 9 of the IBC. The Petitioner in order to cover up the limitation issue brought up its claims with regard to the 30 GPS tracking systems in the petition, which is nothing but abuse of the process of law. 10. I have gone through the documents filed by both the parties and heard the arguments and perused written submissions made by both the counsels. 11. Learned Counsel appearing for the Operation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refer the argument advanced on behalf of the Learned Counsel appearing for the Corporate Debtor who in written submission filed on 12th December, 2019 in Para-D.1 submitted that the claim is time barred as the same was issued in between 01st April, 2014 to 29th September, 2015, whereas the demand notice was issued on 20th November, 2018 and the present application is filed on 11th December, 2018. 15. In light of the aforesaid submissions, when I shall consider the case in hand then I find, in Part- IV at Column -1 of the application, it is mentioned that last Purchase Order for the supply of 30 numbers of GPS vehicle trackers was issued on 12th December, 2015 and due date for payment was 12th December, 2015, in support of that, the Operational Creditor filed supplementary additional document supported with affidavit which shows that the last tax invoice was raised on 14th December, 2015, in respect of 30 numbers of GPS vehicle trackers and the due date of payment was 14th December, 2015 of total amount of ₹ 3,67,200/-. 16. At this juncture, I would also refer the reply of Corporate Debtor who in Para-17 of the reply admitted this fact that the Operational Creditor has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween the parties and another contention is that the Operational Creditor has not enclosed the documents in support of the demand notice. He further submitted that in reply to the demand notice, Corporate Debtor raised this point that invoices are not enclosed alongwith the demand notice and so the demand notice is not in terms of Section 8 of IBC, 2016. And on this ground alone, application is not maintainable. 21. In the light of that contention, I have gone through the demand notice and I find the invoices on the basis of which the Operational Creditor claimed the amount are referred in Para-1 of the demand notice and at Para-7 the document which are enclosed with the demand notice are also shown. I further find the invoice raised on 12th December, 2015 regarding the supply of 30 numbers of Hippo Vehicle tracker are also enclosed alongwith the demand notice. 22. At this juncture, I would also like to refer Section 8 of the demand notice and same is quoted below:- 8. Insolvency resolution by operational creditor. - (1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an invoice demanding paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IBC, 2016, it is not necessary to deliver the demand notice as well as the copy of invoice demanding the payment of the amount together. Merely, mentioning the unpaid operational debt in the demand notice on the basis of invoice, in my opinion, would serve the purpose of Section 8 of the IBC, 2016. Therefore, I find, no force in the contention raised on behalf of the Learned Counsel appearing for the Corporate Debtor that demand notice was not properly delivered. 28. Now, coming to the next contention that according to the submission of the Corporate Debtor, there is a pre-existing dispute regarding the amount/debt raised by the Operational Creditor. 29. At this juncture, I would like to consider the Section 8 of the IBC, 2016 again which I have referred in the afore-mentioned Para and on the basis of that, it can be said that after receiving the demand notice, the Corporate Debtor within a period of 10 days bring to the notice of the Corporate Debtor, the existence of dispute or record of pendency of the sue or arbitration proceedings. 30. In the light of the aforementioned facts, when I shall consider the case in hand then I find that in response to the demand notice th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lectrical Industries Ltd. (02.09.2019 - NCLAT) which is based upon the decision of Innoventive Industries Limited Vs. ICICI Bank reported in 2018 (1) SCC 407. And the relevant portion of judgment is quoted below: 11. In view of the decision of Hon'ble Supreme Court in Innoventive Industries Ltd. Vs. ICICI Bank (2018) 1 SCC 407) , the Hon. Supreme Court will consider the question of application u/s. 7 and 9 observed as follows:- 27. The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning nonpayment of a debt once it becomes due and payable, which includes non-payment of even part thereof or an instalment amount. For the meaning of debt , we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a claim and for the meaning of claim , we have to go back to Section 3(6) which defines claim to mean a right to payment even if it is disputed. The Code gets triggered the moment default is of rupees one lakh or more (Section 4). The corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be. 29. The scheme of Section 7 stands in contrast with the scheme under Section 8 where an operational creditor is, on the occurrence of a default, to first deliver a demand notice of the unpaid debt to the operational debtor in the manner provided in Section 8(1) of the Code. Under Section 8(2), the corporate debtor can, within a period of 10 days of receipt of the demand notice or copy of the invoice mentioned of a dispute or the record of the pendency of a suit or arbitration proceedings, which is pre-existing - i.e. before such notice or invoice was received by the corporate debtor. The moment there is existence of such a dispute, the operatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipt of such demand notice or copy of invoice, the corporate debtor must bring to the notice of the operational creditor the existence of a dispute and/or the record of the pendency of a suit or arbitration proceeding filed before the receipt of such notice or invoice in relation to such dispute (Section 8(2)(a)). What is important is that the existence of the dispute and/or the suit or arbitration proceeding must be pre-existing - i.e. it must exist before the receipt of the demand notice or invoice, as the case may be......... 34. Therefore, the adjudicating authority, when examining an application under Section 9 of the Act will have to determine: (i) Whether there is an operational debt as defined exceeding ₹ 1 lakh? (See Section 4 of the Act) (ii) Whether the documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid? and (iii) Whether there is existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt in relation to such dispute? If any one of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons 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: Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of corporate debtor under section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be. 39. The Operational Creditor has not proposed the name of any IRP, Accordingly, I appoint Mr. Shyam Arora, an Insolvency Professional, registration No. IBBI/IPA-002/IP-N00546/2017-2018/11703 email-arora.shyaam@vahoo.comduly empanelled with the IBBI as the IRP. He is directed to take such steps as are mandated under the Code, more specifically under Sections 15, 17, 18, 20 and 21 and shall file his report before the Adjudicating Authority. 40. The Operational Creditor is directed to deposit a sum of S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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