TMI Blog2021 (12) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... yam Babu Gautam For the Operational Creditor : Mr. Gauraj Shah a/w Mr. Jeet Gandhi , Advocates For the Corporate Debtor : Mr. Jamsheed Master , Advocate i/b Ms. Asha Nair , Advocate ORDER Per : Shyam Babu Gautam , Member ( Technical ) 1. This is a Company Petition filed under section 9 ( the Petition ) of the Insolvency and Bankruptcy Code, 2016 (IBC) by Mohite Infraprojects Private Limited ( the Operational Creditor ), seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Polo Queen Industrial and Fintech Limited ( the Corporate Debtor ). 2. The Corporate Debtor was incorporated 19.07.1984 under the Companies Act, 1956. Its Corporate Identity Number (CIN) is L72200MH1984PLC094539. Its registered office is at 304, A to Z Industrial Estate, Ganpat Rao Marg, Lower Parel, Mumbai 400013. Brief Facts of the case: 3. On 5th February, 2016, the Corporate Debtor, through its Architects M/s. Parelkar-Ovalekar-Paria (Architects and Interior Designers) floated a Tender Notice and invited Tenders from interested contractors who were willing to take up the work as quoted in the Tender Notice. The Operational Creditor submitted its tender ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2019 11.06.2019 5,39,368/- Net Outstanding Balance 33,53,565/-+ Interest @8% p.a.=2,68,285/- ₹ 34,10,640/- 9. The Operational Creditor further submits that they have raised in all 9 bills and all were admitted. 8 of the 9 bills were paid. The procedure as per the agreement for payment of bills raised by Operational Creditor required Corporate Debtor Architect s Architect certifying the works. This procedure is admittedly also completed. 10. The Operational Creditor further submits that the Corporate Debtor has on the basis of certification of work by the Architect of the Corporate Debtor booked the 9th bill in its accounts and had paid applicable TDS thereon and has filled from 26As. In the form 26AS, Corporate Debtor has in accordance with the certification deducted tax at source on the sum of ₹ 28,14,197/- and ₹ 5,39,368/-. Hence, the amount is due and payable as has been admitted. 11. Procedure for certification of bill and payment: i) As per Clause 4 of the Articles of Agreement, the special conditions (pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided always that the issue of the Architect of any certificate during the process of the work or at or after the completion shall not relive the Contractor from his Liability under Clause 2 and 20 nor relive the Contractor of his liability in case of fraud, dishonesty or fraudulent concealment relating to the works or materials or to any manner dealt with in the Certificate, and in case of all the defects and insufficiencies in the work or material which a reasonable examination would not have disclosed. No Certificate of the Architect shall of itself be conclusive evidence that any works or materials to which it relates are in accordance with the Contract, neither will the contractor have a claim for any amounts which the Architects might have certified in any interim bill and paid by the Employer and which subsequently be discovered as not payment and in this respect the Employer decision shall be final and binding. The Architect shall have power to withhold any certificate if the work or any parts thereof are not being carried out to his satisfaction. The Architect may be any certificate make any correction in any pervious certificate which shall have issued by hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -existing dispute arose between the Petitioner Operational Creditor and the Corporate Debtor in or about June 2019 much prior to the issuance of the statutory notice. Since the disputes have arisen prior to the issuance of the notice of filing of the Petition, the present Petition is not maintainable and is required to be dismissed in limine. ii. It is submitted that the mannerism of carrying out the work and the quality of work undertaken by the Operational Creditor as well as the defaults committed by the Operational Creditor are a matter requiring evidence to be led before a Civil Court of competent jurisdiction, therefore, the issues under consideration in the present Petition cannot be decided in a summary fashion as it would cause grave prejudice and unjust harm to the Corporate Debtor who will be deprived from putting forth his case. iii. The present Petition emanates out of a work contract for construction of a residential building towards a total consideration of ₹ 2,15,74,742/- against which the Operational Creditor has already been paid ₹ 2,85,51,818/- which is about ₹ 70,00,000/- in excess of the total construction value. The Corporate Debtor h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with exemplary costs. 15. The Counsel appearing for the Petitioner during his arguments sought to suggest that payment was required to be made in accordance with the Architect s certificate issued in March 2019, however, the said stand is wholly incorrect and inconceivable since the defects came to light only during the monsoon of 2019 which was subsequent to the issuance of the Architect s Certificate and the Petitioners themselves by their letter dated 13th September, 2019 (Exhibit F at page 254 to the Reply dated 24th February, 2021) stated as under: Regarding the rectification work we have never denied our responsibility. We will execute the same as and when the weather conditions normalize. Also inform your site engineer / architect to certify our rectification work as it progresses. The said letter dated 13th September, 2019 bearing reference No. MIPL/PM/2019-20/015 is also copied to the structural architect mutually appointed by the parties being Parelkar Ovalekar Parpia. Further, it is pertinent to note that the Petitioners themselves had told the Respondents that they will obtain a fresh certificate from the Architect, however, no such certificate has been r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29 4. Pedersen Consultants India Pvt. Ltd. vs. Nitesh Estates Ltd. MANU/NL/0328/2019[Order dated 24th July 2019 in Company Appeal (AT) (Insolvency) No. 720 of 2018 passed by NCLAT, New Delhi] 6-10 21. In Mobilox Innovations Pvt. Ltd. vs. Kirusa Software Pvt. Ltd. (2018) 1 SCC 353 : (2018) 1 SCC (Civ) 311 : 2017 SCC On Line SC 1154 at page 403 The Apex Court after discussing the issue at hand in Paragraphs 31 to 50 held as under : 51. It is clear, therefore, that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application under Section 9(5)(2)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the existence of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, cannot be relied upon. 24. During the course of the hearing, the Petitioners have relied upon the judgment of Pedersen Consultants India Pvt. Ltd. vs. Nitesh Estates Ltd. reported in MANU/NL/0328/2019. The said judgment more particularly paragraphs 6 to 10 lay down the correct proposition of law as regards pre-existing dispute is concerned. The Petitioner has sought to rely on paragraphs 11 and 12, however, the said paragraphs have no binding on the present case as they pertain to the facts and circumstances of that particular case where disputes were not pre-existent. Finding 25. We have heard the submissions of Applicant as well as the Respondent and perused the records. 26. The contentions raised by the Petitioner during the course of arguments seeming to suggest that the defects were subsequently cured by the Petitioner is in itself an admission of dispute and the Petition is required to be dismissed on that ground alone. Therefore, in the lights of Mobilox Innovations Pvt. Ltd. vs. Kirusa Software Pvt. Ltd. (2018) this bench is convinced that this Petition is liable to be rejected. It is beyond reasonable doubt that a pre-existing dispute remained out ..... 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