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TMI Blog2021 (12) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... erved the following:- "5.We have perused the documents filed by the parties and heard their arguments. The Applicant has annexed two invoices - Invoice No.55 dated 12.04.2017 for Rs. 4,81,043/- and invoice No. 103 dated 13.04.2017 for Rs. 14,84,775/- for claiming that the Respondent owes Applicant Rs. 19,65,818/-. The Respondent is mainly relying on two debit notes issued by the Respondent to the Applicant sent with a letter dated 19.07.2017 which states that the debit notes have been issued because the goods are of inferior quality and cannot be used by the Respondent. The delivery of this letter is established by courier receipts filed by the Respondent bearing the stamp of the Applicant. A perusal of the debit notes show that the note no.NECPL/17-18/020 dated 13.07.2017 for Rs. 14,84,775/- has been issued in relation to the invoice no.103 dated 13.04.2017 and the debit note no. NECPL/17-18/025 dated 17.07.2017 for Rs. 2,42,469/- has been issued in relation to invoice no.055 dated 21.04.2017. It is clearly established that a debit note has been issued and delivered to the applicant by the Respondent with respect to invoice no.103 dated 13.04.2017 at least. The debit note NECPL/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PO. 5. The Respondent has stated that the Appellant has supplied rods, bus bars, etc., which are the 'raw material' of 'aluminium metals' to the CD since 2015. The said raw material supplied by the Appellant was used by the CD in the manufacture of electrical control panels which the CD is suppling to its clients/customers under various contracts. For purchase of goods the CD used to issue PO almost on a monthly basis to the Appellant. As per the terms of the PO the Appellant were dispatch the goods immediately to the CD and upon receipt of goods and invoice from OC, the CD used to issue post-dated cheque of 45 days to the OC. The period of 45 days was meant for CD to check for any quality and other defects in relation to the 'raw material' supply. In case of any defects the CD was called and they used to replace the defective goods which the OC immediately did as a routine. Being in a 'manufacturing industry', the defects in relation to such 'raw material' cannot be ascertained by a mere physical inspection of goods on receipt but quality defects are mainly revealed when the 'raw material' is actually put to use in the manufacturing. It has also stated that between them, there w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yed supply resulting into disruption of production to the CD due to the default of OC. In any case, these are business dispute including the disputes with respect of dishonoured of cheques which are regulated as per provisions of ' The Negotiable Instruments Act, 1881'. All these disputes are of 'civil nature' and needs to handle under the 'relevant commercial laws'. 9. As far as provisions of Section 9 of the Code is concerned, the same is depicted below for brevity and clarity as well as for ready reference: Section 9: Application for initiation of corporate insolvency resolution process by operational creditor. 9. (1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub-section (2) of section 8, the operational creditor may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process. (2) The application under sub-section (1) shall be filed in such form and manner and accompanied with such fee as may be prescribed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority, shall before rejecting an application under sub-clause (a) of clause (ii) give a notice to the applicant to rectify the defect in his application within seven days of the date of receipt of such notice from the adjudicating Authority. (6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of this section. It clearly reflects that Section 9 can be initiated only if, there is a debt legally liable to be paid to the OC, there must be default by the CD and the invoices/dues are undisputed. 10. We further reiterate that Section 9 of the Code can be enforced only the 'Debt' is due and payable in law. There is a default by the CD and there is no notice of dispute. 11. As stated supra, here all the three elements for admission of application is absent. The Hon'ble Supreme Court has held in 'Mobilox Innovations Private Limited' V/s. 'Kirusa Software Private Limited in Civil Appeal No. 9405 of 2017' "24. The scheme under Sections 8 and 9 of the Code, appears to be that an operational creditor, as defined, may, on the occurrence of a default (i.e., on non-payment of a debt, any part whereof has beco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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