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TMI Blog2025 (5) TMI 775X X X X Extracts X X X X X X X X Extracts X X X X ..... n C.P.(I.B.)728/MB/C-I/2023. By the impugned order, the Adjudicating Authority has admitted the Section 9 petition filed by the Operational Creditor admitting the Corporate Debtor into the rigors of Corporate Insolvency Resolution Process ('CIRP' in short). Aggrieved by the impugned order, the present appeal has been preferred by the suspended Director of the Corporate Debtor. 2. Coming to the brief factual background which is relevant for considering the matter at hand, we find that an agreement was entered between S.R. Garments and the Government of Uttar Pradesh for supply of socks. For this purpose, M/s Rameshwar Textiles Mills Private Limited - Corporate Debtor engaged Sadhna Dye Chem - Operational Creditor as sub-contractor and in turn the Operational Creditor had engaged AOV Clever Knit LLP ('Clever Knit' in short) as sub-contractor. As part of business transactions, the Operational Creditor supplied socks to the Corporate Debtor and raised six invoices amounting to Rs.1,65,97,750/-. On not having received payments, a Section 8 Demand Notice was issued by the Operational Creditor on 24.04.2023 by post, delivery of which was admittedly unsuccessful. Thereafter on 02.05.2023, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssues have not been dealt in the impugned order by the Adjudicating Authority. 4. Refuting the contentions of the Appellant, Shri Gaurav Mitra, Ld. Advocate for the Respondent stated that the claim of the Operational Creditor stood at Rs. 4.29 Cr comprising of principal amount of Rs. 1,65,97,750/- and interest amount of Rs.2,63,17,137/-. This operational debt had arisen from the supply of socks under six invoices issued between 16.11.2017 to 27.12.2017 which invoices carried an express clause stipulating interest @30% p.a. for delayed payments. It was asserted that the alleged dispute raised by the Corporate Debtor with respect to supply of defective socks have no nexus with the six invoices which formed the subject matter of the present Section 9 petition. The bogey of pre-existing dispute was therefore a moonshine defence which has been raised by the Corporate Debtor to save themselves from the rigours of insolvency proceedings. On the contention that there was violation of natural justice on grounds of non-service of Section 8 Demand Notice, it was pointed out by the Operational Creditor that the Corporate Debtor was intimated through email on the registered email address of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Corporate Debtor qua the Operational Creditor and that the said amount remained unpaid. It has been vehemently contended that since no Section 8(1) notice had been validly served upon them, the Corporate Debtor remained unaware of the Section 9 proceedings and was precluded from defending themselves before the Adjudicating Authority. 7. Per contra it is the contention of the Respondent No.2 that the Section 8 Demand Notice was communicated to the Corporate Debtor by email on the registered email address of the Corporate Debtor. The email was sent on the registered email address which had been provided by the Corporate Debtor to the Ministry of Corporate Affairs and even uploaded and disclosed on the Company Master Data. The ground taken by the Appellant that their registered email account was not operational since it was handled by an employee who had discontinued working after July 2021 is contrary to record since the same email ID of the Corporate Debtor continued to remain in the public domain even after the said employee had purportedly quit from the rolls of the Corporate Debtor. Even the Section 9 petition filing and dates of hearing fixed by the Adjudicating Authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentation made by them to the world at large about their registered email address having placed the same on the public domain. Thus, when we look at the facts of the present case, we do not find any infraction of the ratio contained in the above Shailendra Sharma and Sunil Sanghavi judgments supra, since the Operational Creditor had met with the requirements prescribed by the statutory construct of IBC by having served the demand notice on the registered email address of the Corporate Debtor after the earlier delivery of the said notice by post had been unsuccessful. The Appellant has relied on the judgment of this Tribunal in Sharad Kesarwani Vs. M/s. Planetcast Media Services Ltd. & Anr. in CA (AT) (Ins) No. 272 of 2018 wherein it was held that a demand notice under Section 8(1) of IBC is not supposed to have been served if the notice was not served by post at the correct address. The present case is distinguishable since in this case the demand notice was dispatched by post at the given address of the Corporate Debtor but could not be delivered since the office was under renovation. On the other hand, in the Sharad Kesarwani judgment supra, the notice was issued by the Operatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... misdoing of not presenting themselves before the Adjudicating Authority on the dates fixed for hearing. 12. The second limb of argument which has been raised by the Appellant is the existence of pre-existing disputes between the two parties. It was submitted that the Operational Creditor-Respondent No.2 had claimed that the Corporate Debtor had failed to pay Rs. 1,65,97,750/- in respect of six invoices raised from 16.11.2017 to 27.12.2017 (after taking into account payment of a sum of Rs 24,66,892/- on 16.11.2017) while deliberately concealing the fact that the Corporate Debtor had paid Rs.1,40,00,000/- in respect of the same transaction relating to the six invoices to AOV Clever Knit LLP ('Clever Knit' in short) on the instructions of the Operational Creditor. Attention was also adverted to the fact that Clever Knit had moved an application before the MSME Council making certain claims against the Operational Creditor and if the same is taken into cognisance, the claim of the Operational Creditor cannot be said to have fulfilled the threshold of Rs.1 Crore thereby making the Section 9 petition non-maintainable. It was also contended that since the application preferred by Clever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... editor by showing payments to Clever Knit are entries which are unilateral in nature and constituted internal records which cannot be relied upon to show that the debt had been extinguished. It was further submitted that since no demur, protest or dispute was raised in relation to these invoices prior to issue of Demand Notice or even prior to filing of Section 9 Petition, this testifies the absence of pre-existing dispute. It was also asserted that the dispute raised by the Corporate Debtor with respect to supply of defective socks was not related with the six invoices which formed the basis of the present Section 9 petition. Since the Corporate Debtor had failed to make payments despite several reminders, the interest of delayed payments was also occasioned. Since debt had become due and payable and default had been committed and there being no real and genuine pre-existing dispute, the Adjudicating Authority had rightly admitted their Section 9 application. 15. Coming to our findings on the issue of pre-existing dispute, at the outset we would like to observe that the principles laid down in Mobilox judgment supra which has been relied upon by the Appellant is settled law. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it remains unexplained as to why the Corporate Debtor had continued to make the further payments to the Operational Creditor on 14.12.2021, 15.12.2021 and 21.12.2021 aggregating to Rs.40,00,000/- to the Operational Creditor. If the Corporate Debtor was of the firm view that defective goods had been supplied, it remains unexplained as to why no debit notes were issued nor has it been persuasively explained as to why the matter was not followed up by the Corporate Debtor. Coming to the contention of the Appellant that they had purportedly paid Rs.1,40,00,000/- to Clever Knit allegedly on the instructions of the Operational Creditor, we are constrained to note that we do not find any communication showing any authorisation or request given by the Operational Creditor to the Corporate Debtor for making any such payments to Clever Knit. 17. Thus, when we look at the alleged pre-existing dispute raised by the Corporate Debtor in the present matter, we are not convinced that the disputes are genuine and real. We are of the considered view that the defence taken by the Corporate Debtor of having been supplied with defective goods as the basis of pre-existing disputes is a moonshine defe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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