TMI Blog2022 (3) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... so makes it clear that a dispute existed between the two parties regarding the debit note and the amount of debt and both the parties were trying to resolve it. The demand notice was issued by the operational creditor on 18.06.2019 and the email communication to resolve the dispute was taking place between the Corporate Debtor and the Operational Creditor much before the issue of demand notice by the operational creditor. gave no reply and thereafter section 9 application was filed by the Appellant/Operational Creditor for initiation of CIRP. Thus, the issue of non-supply of eighty-four tons of raw material, which resulted in the Corporate Debtor raising a debit note of ₹ 12.50 lakhs which was not accepted by the Operational Creditor and became an element of dispute, is sufficient to show that there was a pre-existing dispute between the Operational Creditor and the Corporate Debtor regarding the debt and its payment. This pre-existing dispute is not illusory or a sham one created only to counter the claim of the Operational Creditor by the Corporate Debtor, but a real one. The Adjudicating Authority has not committed any error in rejecting the section 9 application on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent on 25.06.2019. The Respondent neither replied to this demand notice nor made any payment for pending invoices/debit notes and the Appellant was thus constrained to file an application under Section 9 of the IBC bearing CP (IB) No. 248 of 2020 before the Adjudicating Authority. In this application the impugned order dated 03.03.2021 came to be passed by the Adjudicating Authority and the Appellant has filed this Appeal aggrieved by the said impugned order. 4. We heard the arguments advanced by the Ld. Counsels for the parties and also perused the record. 5. In his arguments the Ld. Counsel for Appellant has submitted that certain goods could not be supplied by the Appellant/Operational Creditor to the Respondent/Corporate Debtor in time for no fault of the Appellant, due to which the Respondent had to purchase goods/materials from the open market at higher prices regarding which the Appellant has already accepted debit notes issued by the Respondent/Corporate Debtor and therefore it should not be taken as pre-existing dispute . He has submitted that the Respondent has on multiple occasions admitted debt of an amount of ₹ 11.25 lacs which is more than the threshold d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (at Pgs. 51-56 of Appeal Paperbook) to contend that the facts regarding non-supply of 84 tons of raw material as also debit notes raised for an amount of ₹ 12.5 lakhs for adjustment regarding the extra price paid by the corporate debtor for purchasing raw materials from open market were submitted before the Adjudicating Authority which showed clearly that the dispute existed much before sending of the demand notice by the Appellant. She has also urged that there is a running account of the Operational Creditor with the Corporate Debtor which is evidenced by the cheque for ₹ 15 lakhs given by the Respondent/Corporate Debtor, and which was accepted by the Operational Creditor without raising any issue. 8. The Ld. Counsel for Respondent has further referred to emails dated 19.02.2018 and 26.02.2018 (both emails attached at Pg. No. 59 of the Respondent s Reply) to argue that the Corporate Debtor had brought the fact of non-supply of materials by the Operational Creditor and that since no supply was received from the Operational Creditor it led to loss of production and raising of debit notes by the Corporate Debtor. The Ld. Counsel for Respondent/Corporate Debtor has thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the aforesaid decision, it is clear that the dispute must exist before the receipt of demand notice. Be that as it may, on appraisal of the arguments advanced by the Ld. Counsels, it emerges that there were disputes existing prior to the issuance of the Demand Notice. The email communication trail starting from date 28.02.2018, 03.07.2018, 05.07.2018 till 26.09.2018 between the Operational Creditor and the Corporate Debtor substantiate the fact that there was delay in supply of material, the same was duly acknowledged by the Operational Creditor in the email communications. 12. To examine the issue of non-supply of materials, it is useful to look at the contents of emails exchanged between the Operational Creditor and the Corporate Debtor. A series of emails (attached between pp. 143-145 of Appeal Paperbook) show that a purchase order was given vide email dated 04.08.2017 by the Respondent to the Operational Creditor alongwith a schedule to dispatch the materials. The rates for the materials are also stated in the email dated 04.08.2017 (attached at Pg. 143 of Appeal Paperbook) even though this email is addressed by the representative of Allied Scripts Ltd. and addressed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 018 sent in reply by the Operational Creditor Dear Sir, Thank you for your valuable reply but we cannot accept this debit note which is issued by you. You are our valued customer and we always did our best to corporate you. The ASL Situation was not purposely created by us to make trouble to our customers. This situation can be happen with any plant. We also loose the delay payment interest day to day over overdue, which is also a financial loss to our company. We deeply regret the inconvenience happen and request you for your cooperation as our esteemed customer. We urge you to release our outstanding amount against our last supplies as per below statement. Xxx xxx xxx . Awaiting your valuable reply for the same. With Regards, Prakhar Chauhan 15. Another email dated 25.10.2018 attached at Pg. 169 of the Appeal Paperbook shows that a meeting took place between the representative of the Corporate Debtor and the Operational Creditor. In this email a reference is made to the minutes of meeting held on 23.10.2018 wherein it is stated as follows: Reference of MOM held on 23.10.2018 below points are discussed for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice-wise but were being made as running account. 18. We refer to the Judgment of Hon ble Supreme Court in the matter of Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software Pvt. Ltd. [2018 1 SCC 353] wherein Hon ble Supreme Court has held as follows:- 40. Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the dispute is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in doing so, the court does not need to be satisfied that the defence is likely to succeed. The court does not at his stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exists in fact and is no spurious, hypothetical or illusory, the adjudicating authority has to reject the application. 19. Detailed examination in aforementioned paragraphs makes it clear that a dispute existed between the two parties regarding the debit note and the amount of debt and both the parties were trying to resolve it. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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