TMI Blog2022 (3) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Corporate Debtor subject to certification of the bills by the Original Contractor. Before the Adjudicating Authority itself, the Corporate Debtor has filed detailed reply where with regard to all items of the claim made by the Operational Creditor detailed reply was given - it is clearly pointed out in the reply that the bills which are claimed by the Appellant could not be paid due to non-certification of invoices. Retention of money - HELD THAT:- he retention money has not been deducted by the Corporate Debtor and there is no claim of payment of retention money. The claim of TDS has been dealt duly. From the invoices which are on the record, it is clear that invoices were issued to the FCIPL and invoices were not directly issued to the Corporate Debtor. The invoices were issued to the FCIPL only for the purpose of due certification by FCIPL and EIL, so that the Corporate Debtor may make the payment. In facts of the case, the Adjudicating Authority has not committed any error in rejecting the Section 9 Application filed by the Operational Creditor. Appeal dismissed. - Company Appeal (AT) (Insolvency) No. 585 of 2021 - - - Dated:- 14-3-2022 - [Justice Asho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The reply was filed to Section 9 application by the Corporate Debtor refuting the claim of the Appellant. It was pleaded by the Corporate Debtor that all bills issued by the Operational Creditor which have been certified by FCIPL and EIL as per methodology indicated in the Assurance Letter have already been paid and there is no claim of the Operational Creditor received with regard to payment of bills which have been certified by FCIPL and EIL. 4. The Adjudicating Authority after hearing both the parties held that there was no privity of contract between the Operational Creditor and Corporate Debtor, hence, the application cannot be admitted. In paras 6 and 7 of the order of the Adjudicating Authority following observations have been made: 6. From the perusal of the above, we find sufficient merit in the claims made by and on behalf of the alleged Corporate Debtor as these letters merely state that the payment due to the work done by the main contractor i.e. M.S FCIPL through the Operational Creditor would be made directly to the Operational Creditor. In our considered view, this is the real substance of these two letters. Further, this also requires various formalities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 015 and 02.09.2016 has undertaken to honour all conditions of the contract, it was incumbent upon the Corporate Debtor to make all payments pertaining to bills of the Operational Creditor after 01.09.2014. It was submitted that when FERNAS was expelled by the Corporate Debtor there was no occasion for the bills to be certified by the FERNAS. It is submitted that the Appellant has completed its work but no payment has been received. It is submitted that it is liability of the Corporate Debtor to make payment against all works done. 6. Learned counsel for the Respondent refuting the submission of the Appellant contends that all payment of the bills submitted by the Operational Creditor which were duly certified as per the methodology have already been cleared and there is no bill which is due on the Corporate Debtor which was certified by the FCIPL and EIL. It is submitted hat the Corporate Debtor has never stepped into the shoes of FERNAS and only limited undertaking to make payment directly to the Operational Creditor in the interest of the work was made which was subject to certification of bills by FERNAS and EIL. It is submitted that Appellant cannot claim any payment on bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Contract/ Work Order with the FERNAS had been undertaken by the Corporate Debtor, hence, all work which was done by the Operational Creditor will be liable to be paid by the Corporate Debtor. 11. When we look into the Letter of Assurance issued by the Corporate Debtor, it is clear that the Corporate Debtor undertook to make payment directly to the Operational Creditor w.e.f. 01.09.2014 which was subject to receipt of invoices duly certified by M/s FCIPL and EIL. Thus, certification of invoices by M/S FCIPL and EIL was condition precedent for making payment. Said Letter of Assurance cannot be stated to be a letter by which the Corporate Debtor substituted itself in the shoes of FERNAS. The assurance was for limited purpose and Corporate Debtor was liable to adhere to the assurance as per assurance given in the said letter. 12. Learned counsel for the Respondent has placed reliance on judgment of Hon ble Supreme Court in Essar Oil Ltd. vs. Hindustan Shipyard Ltd. Ors. , judgment reported in (2015) 6 SCC 642, in case of similar facts, where ONGC was making direct payment to the sub-contractor, it was held that ONGC cannot be substituted in place of the Principal Contracto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd limited liability to make payment was accepted by the Corporate Debtor subject to certification of the bills by the Original Contractor. Before the Adjudicating Authority itself, the Corporate Debtor has filed detailed reply where with regard to all items of the claim made by the Operational Creditor detailed reply was given. It was clearly pointed out in Para 21 of the Reply that the bills which are claimed by the Appellant could not be paid due to non-certification of invoices and in Para 21 following pleadings has been made by the Corporate Debtor: 21. I say and submit that with reference to first allegation regarding non-payment of some of the alleged invoices namely (RA bill No. 03A, RA-07, RA-08, RA-09, RA-28) amounting to ₹ 3,767,647.5/, it is submitted that same has not been paid by respondent due to certain deficiencies i.e. non-compliance of the following explicit conditions: I. Non-amended work order; II. Non-submission of the Undertakings by FCIPL; III. Non-certification of the invoices by FCIPL and; IV. Not providing indemnity. Hence, in view of the above deficiencies, the aforesaid invoices were not processed by OPaL. In other wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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