TMI Blog2022 (1) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... and in this regard, there is enough force, in the stand taken on behalf of the First Respondent. Dispute - HELD THAT:- The dispute as defined in Section 5 (6) of the I BC is not to be restricted to the pending lis or proceedings within the limited purview of Suit or Arbitration proceedings and the term includes should be read as means and includes including the proceedings initiated or pending before Consumer Court, Tribunal, Labour Court or Mediation, Conciliation etc. Ambit of dispute - HELD THAT:- The Adjudicating Authority under the I B Code is required to examine prior to the admission or rejection of an Application as per Section 9 of the Code as to whether the Dispute projected by the Corporate Debtor qualifies as a Dispute as per Section 5(6) of the Code and whether Notice of Dispute given by the Corporate Debtor satisfies the conditions enumerated in Section 8 (2) of the Code. Pre-existing dispute - HELD THAT:- It is the duty of the Adjudicating Authority to find out whether there is a plausible plea which necessitates more investigation and the dispute is not weak one or an assertion of facts unsupported by materials/evidence. If th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to an agreement with regard to purchase and supply of coal and the OC refused to accept the coal supplied by the CD both on the ground of inferior quality and also in not supplying the coal through a particular vessel by name MV Salt Lake City. It also appears that the prices of coal have been dropped after making payment by the OC to the CD at a particular price. The possibility of refusal of acceptance of coal by the OC due to fall of prices cannot be ruled out since the advocate appearing for the applicant during the course of argument refused to accept coal when asked by this Tribunal as to why can t they resolve the issue by accepting coal from the CD as the CD expressed his ready and willingness to supply the coal. The OC did not place any material before the Tribunal to prove the alleged assertion by way of written concluding contract between the parties. On the other hand, the OC in Part V of the present application under column 6 mentioned as if the operational debt has become due and payable out of breach of contract by the CD as per the provisions contained in Chapter V and VI of Indian Contract Act, 1872. The respondent/CD issued reply in response to the demand notice a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /Company submits that the Adjudicating Authority had failed to appreciate that the 1st Respondents in its correspondence had clearly admitted that a contract was made between both the parties and further acknowledged the amounts due on its part even after considering financial losses and interest sum. 4. According to the Learned Counsel for the Appellant, the Appellant had entered into an agreement with the First Respondent on 27.02.2019, towards the purchase of the Thermal Coal and as per the agreement, the First Respondent/Company was supposed to deliver 10,000 MT of Thermal Coal at the basic value of INR 7700 Plus 400 (compensation cess) plus 5% GST plus 1% TCS to the Appellant Company within 60 days from the arrival date of the vessel and payment was to be made in advance 10% approximately INR 80 Lakhs or ₹ 1 Crores towards cash and carry for the lifting of the Coal from the vessel and this is substantiated from the WhatsApp on 27.02.2019 between the Officials of both the parties. 5. The Learned Counsel for the Appellant brings to the notice of this Tribunal that even after the execution of the agreement on 27.02.2019, the Appellant made an advance payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued a reply on 29.04.2019 to the First Respondent stating that it cannot act as per its own whim and fancies and further mentioned that the First Respondent is bound to honour the terms and conditions as agreed to between the parties on 27.02.2019. 9. The Learned Counsel for the Appellant points out that the First Respondent through e-mail dated 31.05.2019 had admitted to the fact that the Agreement was entered between the parties and lifting period of coal was agreed for two months for vessel arrival. Moreover, in the e-mail dated 31.05.2019, the First Respondent had admitted to the fact that the vessel had reached at Kandla Port on 08.03.2019 and keeping in view the statement of the First Respondent, the Appellant had the lifting period of two months from 08.03.2019 till 08.05.2019. However, the First Respondent had sold Thermal Coal on 29.04.2019 as evident from the WhatsApp chat conversation between the parties. 10. According to the Learned Counsel for the Appellant, the First Respondent had acknowledged the due amount and further clearly stated that the refund could be made after forfeiting security and adjusting all losses and claims incurred by the First Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash and carry basis. i.e., invoices basis in which the First Respondent was supposed to supply coal to the Appellant. Therefore, an argument is advanced on behalf of the Appellant that there was no lapse whatsoever qua payment against the purchase coal and the Appellant had complied with the agreed Terms and Conditions . 16. The Learned Counsel for the Appellant contends that the First Respondent had sold the remaining quantity of coal 7600 MT to the third party to make profit as the rate of coal was ₹ 8250/MT whereas the transaction with Appellant was made at ₹ 8100/MT. FIRST RESPONDENT S SUBMISSIONS: 17. The Learned Counsel for the First Respondent submits that First Respondent/Company was always ready and willing to perform its part of the obligation of supplying of coal under the purported Agreement dated 27.02.2019. However, the Appellant itself had tried various methods to terminate the Agreement due to the reason for fall of prices of coal after entering an Agreement with the First Respondent and this was recorded in the impugned order dated 24.02.2020 at paragraph-8 which runs to the following effect : 8 . The possibility of refusal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellant making payment of full cargo value, or alternatively, the Appellant who terminate the Agreement for the part performed after forfeiting the Security Deposit , Adjustment of all Losses , Interests , Costs and Expenses and claims incurred by the First Respondent including but limited to differential due to present fallen market price of Coal from the Appellant s advance payment and refund the balance, if any, to the Appellant. Therefore, the aforesaid statement does not amount to Acknowledgement of Debt in any way. 23. The Learned Counsel for the First Respondent comes out with an agreement that before filing and Application under Section 9 of the I B Code, the Appellant had not informed to the First Respondent in regard to the purported agreement nor agreed to deduction of losses incurred by the First Respondent and rather demanded ₹ 200/MT as profit over the remaining un-lifted quantity of coal without any rhyme or reason. 24. The Learned Counsel for the First Respondent urges before this Tribunal that there was no obligation on the part of the First Respondent as per Agreement dated 27.02.2019 to supply coal from the Vessel MV Salt Lake City ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a suit or arbitration proceeding filed before receipt of notice Section 5(6) only deals with suits or arbitration proceedings which must relate to one of the three sub-clauses, either directly or indirectly. We have seen that a dispute is said to exist, so long as there is a real dispute as to payment between the parties that would fall within the inclusive definition contained in Section 5(6). The correspondence between the parties would show that on 30th January, 2015, the appellant clearly informed the respondent that they had displayed the appellant s confidential client information and client campaign information on a public platform which constituted a breach of trust and a breach of the NDA between the parties. They were further told that all amounts that were due to them were withheld till the time the matter is resolved. On 10th February, 2015, the respondent referred to the NDA of 26th December, 2014 and denied that there was a breach of the NDA. The respondent went on to state that the appellant s claim is unfounded and untenable, and that the appellant is trying to avoid its financial obligations, and that a sum of ₹ 19,08,202.57 should be paid within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs were not jointly signed by the appellant and the respondent but were unilaterally submitted to the Board by the appellant and were later on withdrawn. There did not exist any concluded contract between the Board and the appellant for the performance of the work as per terms and conditions of the tenders floated by the Board. Under Section 32 it was a contingent contract until it was accepted by the Board. In this background, the question emerges: whether there is an arbitration agreement between the parties? It is see; that clause [141 of the agreement [subject to the dispute whether it is arbitrable under clause [14] which is yet another issue with which were are not concerned] independently does not come into existence unless there is a concluded contract pursuant to the proposal made by the appellant on June 22, 1984 or a counter-proposal by the respondent dated June 26, 1984. It is not the case of the respondent that there exist any such independent arbitration agreement. 30. The Learned Counsel for the First Respondent seeks in aid of the Judgment dated 18.03.2020 of this Tribunal in Mr. Gajendra Parihar V. M/s Devi Industrial Engineers [vide Comp. App (AT)(Ins) No 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y (Application to Adjudicating Authority), Rules 2016} whereby and whereunder a demand was made for the payment of an unpaid operational debt from the First Respondent/Operational Debtor for an amount of ₹ 1,97,08,068/- excluding interest against the breach of contract as the Operational Debtor had failed to deliver goods and had not refunded the advance sum paid by the Appellant. 35. The Appellant also had averred in the Notice dated 31.05.2019 that Debt became due on account of Breach of contract committed by the First Respondent/Operation Debt as per provisions contained in Chapter V VI of the Indian Contract, 1972. In fact, the First Respondent/Operational Debtor (through its Directors) was requested by the Appellant s Advocate in the Demand Notice dated 31.05.2019 unconditionally to repay the Operation Debt in Default in full within 10 days from the receipt of the same failing which the CIRP will be initiated. 36. The First Respondent/Operational Debtor through its Advocate had issued a Reply dated 17.06.2019 to the Appellant s Counsel wherein at paragraph 2.14 it is stated as under: 2.14 Still, My Clients by an email dated 31.05.2019 offered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eanwhile, you intended to cancel the order for 4-5K MT on some pretext or the other which we outright rejected and requested you to speed up your lifting of materials at the earliest. 6. However, during telephonic discussion, we agreed to cooperate and sell out some quantity subject to differential price (₹ 500 per MT) to be borne by you to avoid the burden of interest and port rent charges on you. and the above indicates that some violations on the part of the Appellant relating to the Agreement / Contract , were pointed out on the side of the First Respondent, which go to establish that there were pre-existing disputes between the parties, as regards the fulfilment of the covenants of the Agreement / Contracts dated 27.02.2019 entered into between the parties, in respect of purchase of coal . 40. In the instant case, the First Respondent/Operational Debtor has come out with the plea that 1476.36 MT of coal was supplied to the Appellant/Operational Creditor [based on the Invoices and Ledger of the Appellant] though the Agreement was towards the supply of 10000 MT of coal. Hence, the balance quantity is equal to 8523. 64 MT as claimed by the First Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith a view to decide about the breech as per decision BiBi Durga Devi Vs. Shivram AIR 1932 Lahore 148. 46. As far as the present case is concerned, in the instant case, between Appellant/First Respondent, there are Pre-Existing Disputes and they are quite tangible/substantial one and as such, the plausible contentions projected/raised by the parties to the present Appeal require further investigation and in short, the dispute is not to be determined by the Adjudicating Authority /Appellate Tribunal in a Summary Jurisdiction under I B Code. The Adjudicating Authority is not a Court of Law and the CIRP is not an adversial litigation. The Adjudicating Authority is not to decide the Application under I BC like a Money Claim under the I B Code. Viewed in that perspective, the Adjudicating Authority is not supposed to go into the aspect of dispute in a thread bare fashion or on merits. 47. In the light of foregoing detailed discussions, considering the facts and circumstances of the case and also this Tribunal on going through the impugned order dated 24.02.2020 in CP(IB) No. 34/GB/2019 passed by the Adjudicating Authority in rejecting the Section 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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