TMI Blog2022 (12) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... icating Authority on the validity of the demand notice certainly application filed under Section 9 of the code was required to be rejected. In absence of proper authorization for issuance of demand notice under Section 8 of the code such demand notice may not be termed as if it was in accordance with the provision contained in the code for admitting an application under Section 9 of the code, valid and legal demand notice under Section 8 of the code is pre-requisite. Appeal dismissed. - Company Appeal (AT) (Ins) No. 723 of 2021 - - - Dated:- 5-12-2022 - [ Justice Rakesh Kumar ] Member ( Judicial ) And [ Dr. Ashok Kumar Mishra ] Member ( Technical ) For the Appellant : Mr. Sumesh Dhawan, Ms. Vatsala Kak, Mr. Praveen M Surange, Mr. Shaurya Shyam, Advocates For the Respondent : Mr. Abhijit Sinha, Ms. Aastha Mehta, Mr. Aditya Shukla, Mr. Saikat Sarkar, Ms. Prerana Mohapatra, Advocates. JUDGMENT [ Justice Rakesh Kumar , Member ( Judicial ) ] The Present Appeal has been preferred under Section 61 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as Code ) against an order dated 09.02.2021 passed by the National Company Law Tribunal, Ahmeda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tition is defective and therefore, not maintainable in the eye of law; Operational creditor has not produced purchase order or any delivery challan in respect of supply of goods; The goods supplied by the applicant were of low quality; Both the parties had entered into a settlement in May, 2019 and according to the Settlement agreement Rs. 20.00 lacs were paid to the petitioner, therefore, issuance of demand notice is in breach of settlement; There is existing dispute between the applicant and respondent; Findings : 7. Heard Ld. Counsels appearing for both the sides and perused the documents annexed to the application/reply. 8. On perusal of the record it is found that the petitioner had issued two demand notices, the first one dated 29.11.2018 and the second one dated 10.10.2019. Both the demand notices under Section 8 of the I B Code which is a pre-requisite for initiation of CIRP proceedings, is signed and issued by one Mr. Surendra Prasad Shukla, in the capacity of Whole-time Director and authorized signatory of the applicant company, without there being any authorization. Admittedly, the petitioner has filed a copy of the resolution pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 5520/- PMT plus taxes and other charges. 3. It is the case of the Appellant that Respondent categorically agreed with the quality of the Indonesian Imported Coal being supplied by the Appellant in terms of the offer (including the Calorific Value of the coal of Rs. 5200/- with plus/minus 100) and compliance to that the Appellant provided the certificate of sampling and analysis of the coal (from the port of discharge- Kandla Port), issued by the Independent Surveyors (Elegant Surveyors) dated 11.06.2018. Subsequently, the Appellant supplied 999.920 MT of coal vide to 30 trucks for the value of Rs. 61,95,504/- between the period from 07.07.2018 to 10.07.2018 and the payment of Rs. 61,95,000/- on account thereof was made by the Respondent on 07.07.2018. 4. The Appellant made further supplies of 1000.600 MT of coal vide through 29 trucks for the value of Rs. 61,99,718/- in between the period from 14.07.2018 to 17.07.2018 and receipt payment of Rs. 61,96,000/- on 13.07.2018. 5. The Appellant further claimed in its Memo of Appeal that it made the supplies of 1770.340 MT of coal vide 48 trucks for the value of Rs. 1,05,35,307/- in between the period from 21.07.2018 to 25.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, there was long term business relation with the Respondent the Appellant allowed some time to the Respondent to make payment of said outstanding amount. 12. It is further case of the Appellant that the Respondent on 06.05.2019 through a Cheque made payment of Rs. 10,00,000/- against the same outstanding dues of Rs. 88,79,452/- and further assured to the Appellant regarding payment of balance amount shortly. 13. It has also been stated in the Memo of Appeal that despite assurance given by the Respondent he failed to make payment and breached the settlement talk. The Appellant thereafter on 10.10.2019 issued second demand notice under Section 8 of the code for payment of Rs. 78,79,452/- to the Respondents and since no response was received, the Appellant filed an application under Section 9 of the code before the Adjudicating Authority however, the Adjudicating Authority dismissed the application primarily on the ground that it was not maintainable since pre-existing dispute was there. 14. Mr. Sumesh Dhawan, Ld. Counsel appearing on behalf of the Appellant assailing the impugned order has primarily argued that the Adjudicating Authority has failed to exercise its jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsustainable dispute being raised on the basis of certificate of a stack sampling and analysis, Ld. Counsel has drawn our attention to running page 66 which is a certificate dated 06.08.2018. He has shown from this report that sampling place was At the plant of M/s. Nilkanth Concast Pvt. Ltd., Bhadhreshwar . 18. He has also drawn our attention to third column of remarks i.e. sampling and analysis was carried out in presence of representative of M/s. Nilkanth Concast Pvt. Ltd., Gandhidham . Ld. Counsel tried to persuade the court that such report was nothing but it was brought on record to raise frivolous dispute. 19. Ld. Counsel for the Appellant has also drawn our attention to email dated 04.08.2018 sent by the Respondent to the Appellant at running page 64. It would be appropriate to reproduce the contents as follows: This is in reference to our purchase order of 8000 mts coal 5200 gar in this connection we want you to carry out joint sampling for the material we were lifting from Kandla port. From day one we are receiving low GCV coal around 4600 gar so we want you to carry out joint sampling and whatever report comes will be binding to both of the parties. Joint s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed not at port but at the place of the Respondent. 23. He has also argued that demand notice under Section 8 of the Code by an unauthorized person is having no entity and as such without compliance of Section 8 of the code there was no reason for filing application under Section 9 of the code. According to Mr. Sinha, there is no reason for interference with the impugned order. 24. Besides, herein Ld. Counsel for the parties, we have minutely examined the materials available on record including statement made in the Memo of Appeal by the Appellant himself. Ongoing through the materials on record it is evident that much prior to issuance of so called demand notice dispute was existing in between the parties. It is also not in dispute that initially huge amount was paid to the Appellant on supply of the coal by the Respondent, however, subsequently regarding quality of the coal, dispute was raised. Of course, before this Appellate Tribunal it has been argued that demand notice was issued by a person who was duly authorized by the Board and this statement was also made in the application filed before the Adjudicating Authority by the Appellant under Section 9 of the code which is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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