TMI Blog2021 (12) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 - it is further reiterated 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. Reference is invited to the Hon ble Supreme Court in TRANSMISSION CORPORATION OF ANDHRA PRADESH LIMITED VERSUS EQUIPMENT CONDUCTORS AND CABLES LIMITED [ 2018 (10) TMI 1337 - SUPREME COURT] where it is already held that IBC is not intended to be a substitute to a recovery forum and also laid down that whenever there is existence of real dispute, the IBC provisions cannot be invoked. Appeal dismissed. - Company Appeal(AT) (Ins) No. 837 of 2020 - - - Dated:- 30-11-2021 - [Justice Jarat Kumar Jain] Member (Judicial) And (Dr. Ashok Kumar Mishra) Member(Technical) For the Appellant : Mr. Samaksh Goyal, Mr. Nubee Naved, Advocates For the Respondent : Mr. Vikas Mehta, Sr. Advocate with Mr. Lalitendra Gulani, Mr. Pallav Palit, Ms. Shreya Bhojnagarwala, Advocates for Respondent JUDGMENT DR. ASHOK KUMAR MISHRA, TECHNICAL MEMBER 1. The present appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sufficiency of funds. This furthers the contention of the Respondent that there is a pre-existing dispute due to which the Respondent is not required to pay the Applicant s claims. Since the Respondent has successfully established the existence of a dispute between the parties the Tribunal deems it fit to dismiss the present application, without cost. 3. The Appellant/ Operational Creditor (OC) is a public limited company involved in the supply of Aluminium Bus Bars since the year 1989. The Appellant converts aluminium ingot into Aluminium Bus Bars . The case of the Appellant is that the pursuant to the Purchase Order (PO) No.NEC/1803 dated 14.02.2017 placed by the Respondent/Corporate Debtor (CD) supplied Aluminium Bus Bar to the Respondent against this supply the Appellant raised and delivered two invoices upon the Respondent/CD one dated 12.04.2017 for ₹ 4,81,043/- and the second dated 13.04.2017 for ₹ 14,84,775/- total ₹ 19,65,818. The CD in accordance with the payment terms of 45 days Post-dated cheque (PDC) provided two cheques to the Appellant to discharges the payment obligations on 24.05.2017, Cheque dated 17.06.2017 and 19.06.2017 totally to &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he PO contained a liquidated clause which is 1% per week from the delivered date of PO and cancellation order on the sole discretion of the CD was available to the CD if the terms and conditions is not complied. Subsequently in April, 2017 the CD has issued another PO dated 29.04.2017 for goods worth ₹ 7,57,728/- where the goods were placed on urgent and priority basis. The CD has also informed the OC vide email dated 07.07.2017 to take back the sub-standard defective goods from their factory and recoup all loses costs to the CD due to the contractual breaches on the part of the OC: 7. The record also reveals multiple emails between the parties to settle the quality of goods/release payments/disputes resulting from cancellation of April, 2017 PO by the OC resulting in manufacturing disruption of the CD and claims and counter claims between them. 8. We have carefully perused the pleadings of both the parties. What we are observing that CD has raised two debit notes dated 13.07.2017 for ₹ 14,84,775/- and ₹ 2,42,469.91 being material rejected by CD. Apart from this , even the ledger account of CD reflects that they have transactions from the OC mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of an unpaid operational debt by the corporate debtor, if available; and (e) any other proof confirming that there is no payment of any unpaid operational debt by the corporate debtor or such other information, as may be prescribed.] (4) An operational creditor initiating a corporate insolvency resolution process under this section, may propose a resolution professional to act as an interim resolution professional. (5) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order- (i) admit the application and communicate such decision to the operational creditor and the corporate debtor if,- (a) the application made under sub-section (2) is complete; (b) there is no 3 [payment] of the unpaid operational debt; (c) the invoice or notice for payment to the corporate debtor has been delivered by the operational creditor; (d) no notice of dispute has been received by the operational creditor or there is no record of dispute in the information utility; and (e) there is no disciplinary proceeding pending4 against any resolution professional proposed under subsection (4), if any. (ii) reject the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. ........ 25. 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 aforesaid conditions is lacking, the application would have to be rejected. Apart from the above, the adjudicating authority must follow the mandate of Section 9, as outlined above, and in particular the mandate o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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