TMI Blog2019 (1) TMI 1944X X X X Extracts X X X X X X X X Extracts X X X X ..... date. It is clear that a dispute as to the existence of the amount of debt was already in existence, prior to the issue of Demand Notice under Section 8 of the Code and the same has been raised by the Corporate debtor time and again - The Corporate Debtor could not have unilaterally altered the number of modules to be supplied under the Purchase Orders. Hence, the question of quality of goods services provided requires more intrusion and whether there has been a breach of representation or warranty, has to be adjudicated by an appropriate forum. In respect of the definition of dispute . the law is now very much settled as held by several Hon'ble Courts, most importantly the decision of Mobilox Vs. Kirusa [2017 (9) TMI 1270 - SUPREME COURT ] in which an observation has been made that the Adjudicating Authority is to examine at the stage of admission that whether there is a plausible contention which requires further investigation and on assertion of fact a dispute is supported by evidence. Finally, a conclusion is hereby drawn that this is not a case where the impugned Debt and the alleged default was free from existence of plausible dispute or merely a feeble argume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hones (VDP) and the Home Automation Sytem Units (Automation System) for the Operational Creditor s ongoing project named as Kalpataru Harmony . Consequently, Kalpatru Group issued a Letter Of Intent (LOD dated 15.02.2012 to the Corporate Debtor based on quotations of the Corporate Debtor dated 02.02.2012 for installation of Innovative KoCom VDP along with Innovative E Homes - Wireless Home Automation System. 6. In pursuance of the LOI, the following purchase orders were issued upon the Corporate Debtor: Sr. No. Date Purchase Order No. Order Value 1. 09.03.2012 3100029298 1,37,02,524/- 2. 30.12.2013 3100044614 18,39,572/- 3. 09.07.2014 3100048645 19,42,468/- 4. 18.03.2015 3100053291 8,400/- 5. 23.03.2015 3100053436 24,855/- Total Value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt. 11. After enactment of the Code the Petition has been Transferred to this Bench and then after the Operational Creditor has complied with the procedural formalities under the Code. Submissions by the Operational Creditor : 12. The Operational Creditor has submitted that on 05.06.2015, the Corporate Debtor was called upon by a letter of its Advocate, to refund the excess amount along with interest @2A4% p.a., to which the Corporate Debtor replied baselessly denying the claim. In fact, the Corporate Debtor raised a counter claim of 274,08,068/- against the Kalpataru group companies. Thereafter, various correspondences were exchanged from 20.08.2015 to 18.11.2015, between the Operational Creditor and the Corporate Debtor, inter alia, with respect to the excess amount charged by the Corporate Debtor for the Automation System supplied. 13. The Operational creditor did not at the stage of delivery physically verify the sets supplied in respect of each flat. Delivery was taken in trust and on the assumption that each set supplied, contained all the seven modules ordered. There was no suggestion by the Corporate Debtor at the time of installation that there was any sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefits taken by the Operational Creditor from the Corporate Debtor in terms of services after installation of systems. Moreover, it is submitted that the Petitioner Company has been merged into one Kalpataru Retail Ventures Private Limited vide an order dated 20.07.2017 passed by NCLT, Mumbai Bench in CSP NO. 470/2017 and CSP NO. 478/2017. Hence, the claim of the Corporate Debtor for a sum of 74,08.068/- against the Kalpataru Group for the supply of goods ordered and services provided at various sites of the petitioner is sustainable against the Operational Creditor. 21. The Corporate Debtor denies the supply of inferior quality goods or that the lesser quantities of the products have been supplied. The petitioner approved and acknowledged the supplies and installation of the modules, and hence, as per the corporate debtor, the claim of the Petitioner is false and bogus. 22. However, in the reply to the letter dated 16.12.2015 issued by the Corporate Debtor to the Operational Creditor, the Corporate Debtor agreed to the fact that only 4 modules were installed in each Automation kit each flat. However, it says that the modules installed are of Better Technology and denies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the alleged excess amount. The correct position of the outstanding debt has not been revealed to this Bench till date. It is clear that a dispute as to the existence of the amount of debt was already in existence as discussed supra, prior to the issue of Demand Notice under Section 8 of the Code and the same has been raised by the Corporate debtor time and again. Furthermore, the Corporate Debtor had never discussed the alleged better technology with the operational creditor prior to supplying only 4 modules per flat. The Corporate Debtor could not have unilaterally altered the number of modules to be supplied under the Purchase Orders. Hence, the question of quality of goods services provided requires more intrusion and whether there has been a breach of representation or warranty, has to be adjudicated by an appropriate forum. 29. In this connection, in the decision of the Hon ble Supreme Court in Mobilox Innovations Private Limited v. Kirusa Software Private Limited, Civil Appeal No.9405 of 2017 dated 21.09.2017 wherein vide Para 40, an observation has been made as under:- It is clear, therefore, that once the operational creditor has filed an application, which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of fact a dispute is supported by evidence. The expression used in Section 8(2) of the Insolvency Bankruptcy Code existence of a dispute, if any is very significant because the Legislature is deemed not to waste its words or to say anything in vain hence every word is significant, as held in Mithlesh Singh Vs. Union of India, (2003) 3 SCC 309. It is also important to clarify that if the intent of the Legislature was to limit the dispute to only a pending Suit or Arbitration (refer Section 5(6) Definition of Dispute) then there was no requirement to add in Section 8(2)(a) of the Code existence of a dispute, if any . A harmonious and co-joint reading is, therefore, required. A view has also been expressed that the definition of dispute as per Section 5 of Insolvency Bankruptcy Code is illustrative and not exhaustive. It is held that a dispute must not be spurious, hypothetical or illusory. quoted verbatim Se long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application . The Adjudicating Authority is also expected to see whether there is a plausible contention of dispute and not a feeble a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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