TMI Blog2021 (7) TMI 1091X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Corporate Debtor invoiced is not supported by the purchase order nor a confirmation of account at a later date from the operational creditor. The Corporate Debtor is a healthy company, not substantiated by the corresponding balance sheet of the company as they have not filed the same nor alone this cannot be a sole basis to substantiate that it does not require to go to CIRP. High turnover with positive net worth may reflect good fund flow but it does not substantiate a good cash flow - thus, if the corporate debtor is unable to pay its debt, while debt is legally due and default has occurred, dispute not raised or substantiated prior to the issue of demand notice then the Code can be enforced for timely resolution of Insolvency and Bankruptcy. Thus, prima facie the Corporate Debtor needs CIRP and accordingly, the impugned order of the Adjudicating Authority invoking the provisions of the Code is in right spirit. Hence it needs to be uphold - the appeal is dismissed - Company Appeal(AT)(Insolvency) No. 350 of 2021 - - - Dated:- 26-7-2021 - [Justice Jarat Kumar Jain] Member (Judicial) And (Dr. Ashok Kumar Mishra) Member(Technical) For the Appellant : Mr. Ramji S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd above the principal amount as stated above, such interest was never agreed. The account between the parties are operating as current running account and has also stated that it is settled law that documentary evidence showing outstanding amount in the running account prior to the date of the demand notice under Section 8 of the Code raises a valid and substantial question on the existence of debt and has supplement it with judgment of Hon ble Apex Court and of this Appellate Tribunal. c. The issues raised in the impugned order based on rejoinder and without considering sur-rejoinder are trialable issues which are beyond the scope of Section 9 of the Code. The issues relating to forged invoices, manual invoices improbability of high amount of product being delivered in a single date, non-delivery of goods etc., have also been raised. d. The Adjudicating Authority has prima facie accepted the contentions raised by the operational creditor without considering the sur-rejoinder by the corporate debtor and has cited certain judgments of Hon ble Apex Court and of this Appellate Tribunal that these are trialable matter and are matter of evidence beyond the jurisdiction of the Adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was also not supported invoices, delivery challans, GST payments at the time of reply of demand notice. No other disputes were raised or mentioned in the reply to the demand notice. The Corporate Debtor raised the issue that the truck was not the truck but rather it was a crane number and so also the belated issue of GST payment and have also submitted that they have not claimed input credit for those payments made by the corporate debtor as the same is false fabricated and concocted to mislead the Adjudicating Authority. His invoices are manual in nature and not in the series. d. There are glaring defects in the invoices which substantially shows that the invoices are fabricated. No communications of alleged invoices by the Corporate Debtor to operational creditor, as invoices were incorrect name and incorrect address of operational creditor and he has elaborately explained the same while making submissions including in its written submission. e. He has also raised the issue of sur-rejoinder filed by the Corporate Debtor which is unheard of in the Code proceedings. He has also cited the Hon ble Apex Court and this Appellate Tribunal judgment. Counter claim propositio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , by which a petition presented under the Companies Act on the ground that the company is unable to pay its debts can only be dismissed if the debt is bona fide disputed, i.e. that the defense of the debtor is genuine, substantial and is likely to succeed on a point of law. The interim report also adverted to an amendment made in the Companies Act, 2003, by which the threshold requirement of ₹ 500 was replaced by ₹ 1 lakh. 15. The interim report found: Once the petitioning creditor has proved the inability of the debtor company to pay debts, van Zwieten states that courts in India have recognised a wide discretion that enabled it to give time to the debtor to make payment or even dismiss the petition. This is in stark contrast with the position in the UK (from where the law was transplanted) where once the company s inability to pay debts has been proven, the petitioning creditor is ordinarily held to be entitled to a winding up order (although it should be noted that there is an alternative corporate rescue procedure, administration , which a debtor may be entitled to enter). The effect of these abovementioned judicial developments has been to add si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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