TMI Blog2023 (5) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... ile any proof of service of Section 8 notice along with Section 9 Application but supplementary affidavit was filed before the Adjudicating Authority bringing on record the proof of service of Section 8 Notice. It is very relevant to notice that at no point of time prior to filing reply to Section 9 Application, corporate debtor issued any such letter or complaint informing the Operational Creditor about non-delivery of goods. The tax invoice which was noticed above clearly contains the details of vehicles with their numbers by which goods were delivered. The fact is that at no point of time, the Corporate Debtor even raised a little finger about non-delivery of goods. In Demand Notice as well as Section 9 Application, there was categorical pleadings of the Operational Creditor that there is no dispute or demur with regard to goods supplied. The statement was made due to attending facts and circumstances when after supply of goods no issue regarding supply or delivery was raised - Present is a case where Demand Notice was not even replied by the Corporate Debtor and the plea raised in the Reply by the Corporate Debtor regarding non-supply of goods has been held to be dishones ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and issued letters dated 25.09.2018, 03.10.2018, 11.10.2018 and 12.10.2018 and lastly on 31.10.2018. (ii) The Corporate Debtor assured for making payment however when no payment was made, Demand Notice Under Section 8 of the Code was issued on 26.10.2020 demanding an amount of Rs. 7,32,51,745 as principal amount with 18% interest totaling Rs. 10,10,88,798/-. Demand Notice was not replied by the Corporate Debtor. An application under Section 9 of the Code was filed by the Operational Creditor on 24.02.2021. (iii) Notices were issued by the Adjudicating Authority in the Section 9 Application to the Corporate Debtor to file its Reply. On 17th July, 2022, supplementary affidavit was filed by the Operational Creditor bringing proof of service of Demand Notice. Operational Creditor filed its Rejoinder to the Reply before the Adjudicating Authority. Statement was made on behalf of the Corporate Debtor seeking adjournment on the ground of possibility of settlement between the parties. The Adjudicating Authority adjourned the proceedings twice subsequently the Adjudicating Authority was informed that no settlement has been entered between the parties. The Adjudicating Authority heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was utilized for CESC Princep Substation and at no point of time, consignee CESC Limited informed the Corporate Debtor or the Operational Creditor about nondelivery of goods and at no point of time, has complained about not supply of goods. In the Reply filed to Section 9 Application, the Corporate Debtor raised defence that Application was not duly signed and verified by the competent person, no service of Section 8 Notice and no proof of delivery of goods have been filed. There was not even clear pleading by the Corporate Debtor that no goods were delivered by the Operational Creditor. The defence taken by the Corporate Debtor was a dishonest defence and moonshine defence. The Corporate Debtor has taken tax input of the invoice. 5. We have considered the submissions of Learned Counsel for the parties and have perused the record. 6. The Adjudicating Authority in its analysis and finding, has noted the legal preposition as to whether the Petition has been duly signed and verified by the competent person. The said issue was analyzed and finding was returned by the Adjudicating Authority that petition which was filed by Mr. Debabrata Basu on behalf of the Operational Creditor w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 14 of the Code of Civil Procedure. A person may be expressly authorized to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual. In absence thereof and in cases where pleadings have been signed by one of it s officers a Corporation can ratify the said action of it s officer in signing the pleadings. Such ratification can be express or implied. The Court can, on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the pleading by it s officer. (Emphasis Added) iii. In Janki Vashdeo Bhojwani and Anr. v. Indusind Bank Ltd. Ors., albeit in a different context, Hon ble Apex Court overruled a judgment of the Bombay High Court in Pradeep Mohanbay v. Mignuel Carlos Dias, inter alia opining as follows: 7. Order 3 Rule 1 and 2 Code of Civil Procedure empowers the holder of power of attorney to act on behalf of the principal. iv. Further, in A.C. Narayanan and Ors. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Debtor from the Operational Creditor, without any dispute or demur. 11. In section 9 Application also, the Operational Creditor in the synopsis itself stated as under: the equipment was duly received by the Corporate Debtor from the Operational Creditor, without any dispute or demur. 12. In Part-IV of the Application (Particulars of Operational Debt) details of purchase orders were mentioned and further statement was made: the equipment was duly received by the Corporate Debtor from the Operational Creditor, without any dispute or demur. 13. As noted above, the equipment and materials were supplied by the Operational Creditor as per purchase orders to the consignee CESC Limited. The tax invoice has been filed along with Section 9 Application dated 16.05.2018 in which details of recipients is mentioned as name of the Corporate Debtor and details of consignee was mentioned as CESC Limited. It is useful to notice the aforesaid two column of the invoice. The relevant column of the invoice is as follows: Details of Recipient (Bill To) : 2100053465 Details of Consignee (Ship to); 2800033901 Name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25/- against our Invoice No. 182401001946 dated 16th May, 2018 towards 90% of the contract value along with taxes and duties has already fallen overdue for payment on 30th August, 2018. As per the Terms of the Purchase Order 90% of the contract value along with taxes and duties is payable in 90 days and all the materials were received by you on 30th May, 2018 as per copy of receipted L/Rs enclosed. During our follow up visits to your office we were given the assurance of payment by you latest by 20th September, 2018. We deeply regret to note that till date you have not released out above payment which is putting us in deep financial trouble due to blockage of this huge capital. We earnestly request you to release our overdue payment of Rs. 74,321,225/- to us immediately but not later than 28th September, 2018. We sincerely hope that you would appreciate the gravity of the situation and do needful. Thanking you and assuring you of our best attention at all times. Thanking you, Yours Faithfully For ABB India Limited (Jayanta Nandy) Regional Sale Director Zone East Enclosure :- As stated above. 16. We may al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Letter dated 25.09.2018 that all the materials were received by 30th May, 2018 and Corporate Debtor was informed that ABB Service Engineer s Team which was posted at the substation is being withdrawn. It is very relevant to notice that at no point of time prior to filing reply to Section 9 Application, corporate debtor issued any such letter or complaint informing the Operational Creditor about non-delivery of goods. The tax invoice which was noticed above clearly contains the details of vehicles with their numbers by which goods were delivered. The fact is that at no point of time, the Corporate Debtor even raised a little finger about non-delivery of goods. 18. Learned Counsel for the Operational Creditor has also submitted that Corporate Debtor has also taken tax input credit of the tax invoice which was submitted by the Operational Creditor at the time of hearing. The query was put to the Learned Counsel for the Corporate Debtor as to whether Corporate Debtor has taken tax input credit. An additional affidavit has been filed on behalf of the Appellant dated 18th April, 2023 in which in paragraph 7, following has been stated: 7. On 12.04.2023, during the course of ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchase order placed by the respondent has been supplied by the petitioner. 21. The pleading in paragraph 3(i) states that the work executed by the Appellant was defective and delay and default was committed itself bely the submission of Appellant that goods and materials were never supplied. In paragraph 3(k), the Appellant has stated that Operational Creditor has not been able to prove that as materials ordered under Supply Contract has been supplied. 22. There is one more relevant fact which need to be noticed. When the matter was heard before the Adjudicating Authority on 29th July, 2022, statement was made by Learned Counsel for the Appellant that there is fair possibility of settlement between the parties and the matter was adjourned. Again, the Adjudicating Authority heard the parties on 29.11.2022 where the statement of the Corporate Debtor was noticed that there is possibility of settlement and the matter was adjourned. The Order dated 29th November, 2022 notes as follows: 1. Learned Counsel on both sides present. 2. This is 2021 matter. Ld. Authorised Representative Mr. Arvind Kumar Mishra, CS appears and seeks time to file power of attorney on be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply of goods. 25. Learned Counsel for the Appellant in support of his submission that burden of proof was at the Operational Creditor to prove that goods and materials were supplied, has relied on two Judgements of Hon ble Supreme Court in (2006) 5 SCC 558, Anil Rishi Vs. Gurbaksh Singh and (2011) 12 SCC 220, Rangammal Vs. Kuppuswami Anr. 26. Both the above judgements were considering the provisions of Section 101, 102 and 106 of the Indian Evidence Act, 1872. The observations made by the Hon ble Supreme Court were in context of burden of proof under the Indian Evidence Act. Strict burden of proof under the Evidence Act can not be applicable with regard to proceedings under the I B Code, 2016 which are summary proceeding where pleadings are in proforma as prescribed in Rules and Regulations. 27. In Demand Notice as well as Section 9 Application, there was categorical pleadings of the Operational Creditor that there is no dispute or demur with regard to goods supplied. The statement was made due to attending facts and circumstances when after supply of goods no issue regarding supply or delivery was raised. 28. Learned Counsel for the Appellant has also placed reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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