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TMI Blog2023 (9) TMI 1292X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Adjudicating Authority (National Company Law Tribunal, New Delhi Bench, Court-II) in CP (IB) No.603(ND)/2020. By the impugned order, the Adjudicating Authority has admitted the application under Section 9 of the IBC filed by Flourish Paper & Chemicals Ltd. - Respondent No.1 and initiated Corporate Insolvency Resolution Process ("CIRP" in short) of the Corporate Debtor-Suchi Paper Mills Ltd. Aggrieved by this impugned order, the present appeal has been filed by the suspended director of the Corporate Debtor. 2. Putting across the concise factual matrix, goods were supplied by the Operational Creditor-Respondent No.1 to the Corporate Debtor against which bills were raised by the Operational Creditor against invoices from 08.10.2016 to 17.12.2016. Since the outstanding debt purportedly stood at Rs. 20,91,690/- which included an interest amount of Rs.7,49,460/-, the Operational Creditor had issued a demand notice to the Corporate Debtor under Section 8 of IBC on 02.01.2020. The Corporate Debtor had replied to the said demand notice on 13.01.2020 demanding payment of Rs 25,00,000/- towards compensation for loss and damages suffered due to poor quality of goods supplied by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Debtor from the Operational Creditor. 5. Adding further that both recovery notice and Section 8 demand notice were issued with mala-fide intention by the Operational Creditor, it was stated that the said notice had also been duly replied to by the Corporate Debtor making a counter claim. It was also added that the demand notice issued by the Operational Creditor included an interest amount which was never agreed upon by the Corporate Debtor. 6. It was therefore contended that the Adjudicating Authority had failed to consider that nothing was due or payable by the Corporate Debtor to the Operational Creditor and that there was a pre-existing dispute subsisting between the two parties. Assailing the impugned order, it was asserted that a viable company which is operating as a going concern with large number of employees has been wrongly pushed into insolvency process. 7. Making their counter submissions, the Learned Counsel for the Respondent No.1-Operational Creditor submitted that the bogey of pre-existing disputes raised by the Corporate Debtor was a sham and a moonshine defence to evade the liability of payments. As regards the issue raised by the Corporate Debtor that they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porate Debtor as a going concern. 10. IRP had been allowed an opportunity to file a reply following which submission has been made by the IRP that an application under Section 19(2) of the IBC has been filed before the Adjudicating Authority for lack of cooperation from the suspended management of the Corporate Debtor which is pending. It is also submitted that the ex-management has been siphoning the revenues of the Corporate Debtor and demanding release of payment to employees/third parties without furnishing necessary details. The IRP has stated that claims of approximately Rs.104 crore has been received from various creditors of the Corporate Debtor and that in the interests of justice CIRP may be commenced without further delay. 11. IA No. 2733/2023 has been filed by the IRP praying for determination and payment of fees and expenses of the IRP in terms of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 12. We have duly considered the arguments advanced by the Learned Counsel for the parties and perused the records carefully. 13. It is the claim of the Appellant-Corporate Debtor that it suffered a loss because the Operational Creditor had suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reply to the Section 9 petition, the Corporate Debtor had only raised a demand of Rs.25 lakh only as compensation for loss and damages. The issue of further payments of Rs. 19,52,161/- was never raised before the Adjudicating Authority and has only been raised before this Tribunal as an after-thought to avoid being dragged into insolvency proceedings. 15. We find that the Adjudicating Authority has looked into the issue of pre-existing dispute arising out of reconciliation of accounts in the impugned order after taking into account the guiding principles laid down by the Hon'ble Supreme Court in the matter of Mobilox Innovations Private Limited Versus Kirusa Software Private Limited, Civil Appeal No. 9405 of 2017 dated 21.09.2017 ('Mobilox' in short) at para 24 of the impugned order which is as extracted below: "40. It is clear, therefore, that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application under Section 9(5)(2)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is further contended by the Respondent that it has to recover Rs.16,08,316/- from the Operational Creditor. That on perusal of reply, we find that ledger account of Operational Creditor maintained by Corporate Debtor is annexed. However, no invoices in support are annexed by the Respondent, which could depict any amount due and payable by the Operational Creditor. 27. Even for a moment, we assume that there is a counter-claim of the Respondent against the Applicant/Operational Creditor, then the same cannot be adjudicated under an application filed under Section 9 of IBC, 2016. Here, it is worthwhile referring to the Judgment of the Hon'ble NCLAT passed in the matter of Deepak Gupta Vs. Ved Contracts Pvt. Ltd. & Ors. in Company Appeal (AT) (Insolvency) Nos. 1262 of 2019, dated 19.11.2019. "3. Learned Counsel for the Appellant submits that in the accounts of three consecutive years, it is shown that the amount is payable to the 'Corporate Debtor' and there are claims and counter claims, which has not been adjudicated by the Adjudicating Authority. However, such ground cannot be accepted as the disputed question relating to claims and counter claims cannot be dete ..... X X X X Extracts X X X X X X X X Extracts X X X X
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