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TMI Blog2022 (7) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... aishali,(Bihar) (hereinafter referred as the Corporate Debtor). 3. It is submitted by the Operational Creditor that there was a long drawn business relationship between the Operational Creditor and Corporate Debtor. The Operational Creditor supplied Geo Bags and rope Gabian from time to time against purchase orders issued by the Corporate Debtor. It is submitted that the Corporate Debtor never raised issues regarding the goods supplied by the Operational Creditor. The Corporate Debtor approached the Operational Creditor for purchasing Geo Bags vide email work orders/purchase orders bearing details in the emails received on 16th February,2018 at 17.34 p.m. the Operational Creditor supplied goods against the said purchase order, Tax invoices and challan being No.788,866,865/- dated 25th May,2018, 3rd May, 2018 and 2nd May, 2018 were received by the Corporate Debtor. Thereafter, the Corporate Debtor placed orders from time to time and against such Purchase orders, the Operational Creditor supplied goods, the payment of which is due. The details of the goods supplied, tax invoices are as under:- Sl. No. Date Invoice No. Amount 01. 28.04.2018 GS/T-043/17-18 666400 02. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid amount. However, in the said reply dated 16.09.2019 supply of goods were not denied. It is submitted that the supply of goods have been admitted by the Corporate Debtor but has raised question regarding quality and quantity of the goods supplied. It has also been alleged that objections regarding quality and quantity had been raised fraudulently and the Corporate Debtor does not have any document to prove that objection regarding quality and quantity of goods were ever raised. 8. It is submitted that the Operational Creditor in its Demand Notice under Section 8 of the Code demanded the unpaid operational debt from the Corporate Debtor within 10 days from the date of communication of the said notice. A reply was communicated to the Operational Creditor denying its liability to pay the debt. But the Corporate Debtor has failed to bring to the notice of the Operational Creditor any record of pendency of any suit or Arbitration proceedings filed by the Corporate Debtor or any repayment of the unpaid operational deb by the Corporate Debtor. The Corporate Debtor has raised only certain technical issues, which are frivolous in nature because no such dispute had been raised at the tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditor that the prices quoted by it would be inclusive of not only the taxes but also the transportation charges up to the site of the consignee. 12. In the Rejoinder, the Operational Creditor to the reply filed by the Corporate Debtor, the Operational Creditor has submitted that the Corporate Debtor had purchased and consumed the goods supplied by the Operational Creditor and dispute is now being raised is an afterthought only to defeat present petition. It is submitted that the dispute raised is only moonshine and frivolous as it is raised only service of demand notice under section 8 of the Code and therefore, it does not qualify to be "Pre-existing dispute" as envisaged under section 8 of the Code. The Corporate Debtor has failed to point out any instance of contentions raised in its affidavit in reply. It is submitted that there has to be dispute raised by the Corporate Debtor before service of notice under section 8 of the Code. In the present case, the Corporate Debtor has failed to point out any communication whereby it has raised dispute whether about the price, quality or quantity of the goods supplied by the Operational Creditor rather the goods supplied by the Operation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the goods to the Operational Creditor. It is denied that the Operational Creditor agreed to provide material @ Rs.700/- inclusive of taxes and transportation charges. All other averments in the reply affidavit are disputed by the Operational Creditor. 16. During the course of arguments, the Ld. Counsel for the Operational Creditor has supplied goods and six bills have remain unpaid, copies whereof are annexed as Annexure -B (pages 14-21). The goods were supplied in April,2018 to May 2018 and they were consumed by Corporate Debtor without any demur. The amount outstanding for these invoices is Rs.34,90,318/- which is at Annexure-C (Page-22). 17. It is submitted that till issuance of notice under Section 8 of the Code, there was no complaint whatsoever raised by Corporate Debtor to Operational Creditor with respect to supply of goods covered by invoices at Annexure-B. 18. It is submitted that the notice in Form 3 was issued on 07.08.2019 (page-46) and it was replied to after prescribed period of 10 days on 16.09.2019 (page 52) by the Corporate Debtor. In the reply to statutory notice, Corporate Debtor did not complain with respect to supply made for invoices based on which Form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows:- Financial year 2016-17 2017-18 2018-19 Turnover 55,77,131.74 66,30,59,692 10,30,591,145 Profit % (Percentage) 5.93% 6.18% 9.93% Profit Amount 3,30,48,256 4,09,77,447 10,23,26,077 23. It is submitted that having regard to the fact that the Corporate Debtor is a highly solvent and profitable company there exists no basis to push the same into insolvency on the basis of a disputed claim. 24. It is submitted that recovery of a disputed claim is in any event not contemplated under the provisions of Section 9 of the Insolvency and Bankruptcy Code. In this regard, the following decisions are relied upon:- 1. Pratiksh Promod Rai -Versus- Mylaw Learning Resources Pvt.Ltd. CP (IB) No. 195/MB/2019, (NCLT Mumbai) Propositiona. The Operational Creditor must prove that the Corporate Debtor is not finally sound (Para 14) b. IBC is not a Recovery Forum (Para 15) 2. Mobilox Innovations versus Kirusa Software Pvt. Ltd. -2018 1 SCC 353, Paras 33,34,37,42 to 45, 51,54 at page 404 " 54...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 definitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be Rs. 60.50 per bag and the rate for supply of rope would be Rs. 1100 per gabion. 30. It is submitted that it will, however, appear that having regard to the substandard quality of goods supplied the operational creditor agreed to accept far lower rates which demonstrates pre-existing disputes with regard to both quality and rate. It is submitted that although the transactions between the parties spans between 19th February,2016 to 24th May, 2018 and covers 102 invoices, but the petition is confined only to six invoices at pages 6 and 7 (Part IV of the petition). 31. It is submitted by the Ld. Counsel for the Corporate Debtor that the Operational Creditor cannot select six invoices out of a total number of 102 invoices and raise a claim in respect thereof. The transaction between the parties from 19th February 2016 to 24th May 2018 constitute one single series of transactions and the respective claim of the parties against each other will have to be determined in respect of the entire gamut of 102 transaction between 19th February ,2016 and 24th May, 2018. 32. It is submitted that in any event the said six bills have also been raised at a rate below the agreed rate and such c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... encouraged, it will cause havoc in the business circles. 35. On the one hand, the Operational Creditor has proved its case of outstanding debt and the default and on the other hand, the Corporate Debtor in spite of its best efforts to bring this matter in the category of preexisting dispute has failed to do so. 36. We are, therefore, of the considered view that this petition has to be admitted and we, therefore, pass the following orders:- ORDERS i) The application filed by the Operational Creditor under Section 9 of the Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process against the Corporate Debtor, is hereby admitted. ii) We hereby declare a moratorium and public announcement in accordance with Sections 13 and 15 of the I & B Code, 2016. iii) Moratorium is declared for the purposes referred to in Section 14 of the Insolvency & Bankruptcy Code, 2016. The I.R.P. shall cause a public announcement of the initiation of Corporate Insolvency Resolution Process and call for the submission of claims under Section 15. The public announcement referred to in clause (b) of sub-section (1) of Section 15 of Insolvency & Bankruptcy Code, 2016 shall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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