TMI Blog2021 (7) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... aying RA Bills. Thus it cannot be agreed with the argument to make a presumption that there was pre-existing dispute or that the responsibility of non-completion fell on the Operational Creditor. It is concluded that there was no pre-existing dispute regarding the construction works that were undertaken by the Operational Creditor for the Corporate Debtor. Since there was no pre-existing dispute, all the other issues/disputes that relate to the various clauses of the contract agreement such as joint measurements, lack of completion certificate and inadequate and inappropriate certification of the bills become irrelevant insofar as adjudication of Respondent No. 1 s application under Section 9 is concerned. The appeal is dismissed. - Company Appeal (AT) (Insolvency) No. 354 of 2020 - - - Dated:- 2-7-2021 - (Justice A I S Cheema) The Officiating Chairperson And (Dr. Alok Srivastava) Member (Technical) For the Appellant : Mr. Virender Ganda, Sr. Advocate with Mr. Vipul Ganda, Mr. Ayandeb Mitra, Ms. Aastha Trivedi, Mr. Guresha Bhamra, Ms. Dipika Ganda, Advocates For the Respondent : Mr. Nakul Mohta, Advocate for R-1 Mr. Vinod Kr. Chaurasia and Mr. Iswar Mohapatra, R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dated 16.2.2018 and 23.2.2018, given by the Respondent No. 1 (Operational Creditor) to the Appellant (Corporate Debtor). In his reply and oral arguments, the Learned Counsel for Respondent No. 1 has stated that for the purpose of this matter which is under the IBC, the demand notice dated 23.2.2018 issued under Section 8 of IBC is being relied upon and the reply of the Appellant to this demand notice dated 23.3.2018 is therefore to be considered. We will, therefore, consider the demand notice dated 23.2.2018 and its reply by the Corporate Debtor dated 23.3. 2018 for the purpose of this appeal, as has been done by the Adjudicating Authority. 5. The main issue on which this appeal hinges is the pre-existence or otherwise of dispute between the Appellant and Respondent No. 1 regarding the claimed operational debt. In the Impugned Order the Adjudicating Authority has not considered the dispute raised by the Corporate Debtor as a pre-existing dispute and has consequently admitted Section 9 application of the Operational Creditor. 6. In the arguments the Ld. Counsel of Appellant has cited two letters dated 14.10.2014 (page 236, volume 2 of Appeal) and dated 18.1.2016 (page 235, v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rational creditor has encashed a cheque issued by the corporate debtor. Explanation: For the purposes of this section, a demand notice means a notice served by an operational creditor to the corporate debtor demanding payment of the operational debt in respect of which the default has occurred. The provision under Section 8(2)(a) makes it clear that the corporate debtor has to bring to the operational creditor the fact of the existence of a dispute within ten days of the receipt of the demand notice. 8. Regarding judging whether a dispute is a pre-existing dispute, the Hon ble Supreme Court has held in Mobilox Innovations (P) Ltd. v. Kirusa Software (P) Ltd. [Civil Appeal No. 9405 pf 2017, decided on September 21, 2017, (2018) 1 SCC 353] as follows: Therefore all that the adjudicating authority has to see at this stage is whether there is a plausible contention which requires further investigation and that the dispute is not patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster So long as a dispute truly exists in fact and is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that these RA bills were certified by one Satish Wagh, a representative of the architect, at a time when he was not assigned to the project. The Appellant has produced a letter dated 15.12.2018 of the architect of the project Nivedita and Uday Pande Consultants stating that Satish Wagh had been shifted to another project from September 2014 onwards. Therefore, he has argued, the certification of the works by Satish Wagh is not proper and such bills are not liable to be paid. On this issue, the Learned Counsel for Respondent No. 1 has claimed that the RA bills have been submitted as evidence of the work that was carried out and Satish Wagh who certified the RA bills, was appointed by the architect of the project. He has also urged that the documents relating to of RA Bills were sent as attachment to the email dated March 22, 2018 forwarding the demand notice under section 8 to the Appellant (page 48-52 of Appeal Paperbook, Vol. I) and it has also been filed with the Written Statement of the Respondent before the Adjudicating Authority and is therefore a part of record of the Adjudicating Authority. 11. Clause 57 of the contract agreement very clearly specifies that the joint m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave any bearing on the outcome of this appeal. 14. The Ld. Counsel of Appellant has referred to the following judgments in support of his contentions Mobilox Innovations Private Limited. v. Kirusa Software Private Limited (2018) I SCC 353 Innoventive Industries Ltd. v. ICICI Bank Anr., (2018) I SCC407 Kuntal Construction Pvt. Ltd. v. Bharat Hotels Ltd. C.A.(AT)(I) No. 542 of 2020. Ved Contracts Pvt. Ltd. v. Pan Realtors Pvt. Ltd., C.A.(AT) (I) No. 908 of 2019. Sandeep Reddy Anr. v. Jaycon Infrastructure Ltd., C.A(AT)(I) No. 228 of 2017. 15. The judgments of the Hon ble Apex Court in Mobilox Innovations Private Limited and Innovative Industries Limited civil appeals are basically about pre-existing dispute and that the Adjudicating Authority should be prima facie convinced about the pre-existence of a dispute before notice under Section 8 was sent, and not involve itself into examining the pre-existing dispute on merits. In the present case, since no pre-existing dispute is found to be present, the ratio of these judgments are not found applicable. The judgment in Kuntal Construction case, decided by NCLAT only follows the dictum well-settled by Mobilox ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erational Creditor, before Operational Creditor sent Demand Notice u/s 8 of IBC. The Document Annexure R-1 filed by Respondent No.1 (Dy. No.25468) shows that even till August, 2016 bills were being paid. Thus, time was not essence of the contract. No dispute can be presumed merely by non-completion of the project in the fixed time or for the reason that the it was the contractor s fault, when the contract shows responsibilities on both the sides. If Operational Creditor had to continue construction, Corporate Debtor also had to continue paying RA Bills. Thus we do not agree with the argument to make a presumption that there was pre-existing dispute or that the responsibility of non-completion fell on the Operational Creditor. 19. In the light of the discussion in the above-mentioned paragraphs, we come to a very clear conclusion that there was no pre-existing dispute regarding the construction works that were undertaken by the Operational Creditor for the Corporate Debtor. Since there was no pre-existing dispute, all the other issues/disputes that relate to the various clauses of the contract agreement such as joint measurements, lack of completion certificate and inadequate and ..... 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