Tribunal rejects application under Section 9 of IBC, emphasizing need for further investigation.

The tribunal rejected the application under Section 9 of the IBC due to the substantial dispute between the parties regarding delays in work completion and quantification of damages. Citing the Mobilox case, it emphasized the need for further investigation when faced with a plausible contention. The tribunal concluded that the matter should be decided by a civil court, leading to the rejection of the application with no costs awarded.

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Issues Involved:
1. Existence of Operational Debt
2. Due and Payable Operational Debt
3. Existence of Dispute between Operational Creditor and Corporate Debtor

Issue-wise Detailed Analysis:

1. Existence of Operational Debt:
The Operational Creditor claimed amounts related to work done under work orders dated 19.08.2009 and 30.07.2013, totaling Rs. 10,59,66,910. These amounts include final bills, retention amounts, and overrun compensation. The tribunal found that these amounts possess the characteristics of an Operational Debt as defined in the Insolvency and Bankruptcy Code (IBC).

2. Due and Payable Operational Debt:
The tribunal examined whether the claimed Operational Debt was due and payable. As per clause 2.5(D)b of the Work Order, if delays were attributable to the Operational Creditor, the Corporate Debtor could adjust liquidated damages from payable amounts. The tribunal noted that there was a delay in the completion of work, and the Corporate Debtor had raised issues regarding this delay even before the issuance of the demand notice. The Operational Creditor argued that the delays were due to the Corporate Debtor’s failure to provide necessary facilities and materials. However, the tribunal found that there was an ongoing dispute regarding who was responsible for the delays.

3. Existence of Dispute:
The tribunal found substantial evidence of a pre-existing dispute between the parties. The Corporate Debtor had repeatedly communicated issues regarding delays and defects in the work through various letters and emails. The tribunal noted that the dispute was not a patently feeble legal argument or an assertion unsupported by evidence. The Hon'ble Supreme Court's decision in Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. was cited, emphasizing that the adjudicating authority must reject the application if there is a plausible contention requiring further investigation.

Conclusion:
Given the existence of a substantial dispute regarding the delay in work completion and the quantification of damages, the tribunal concluded that the application under Section 9 of the IBC must be rejected. The application was accordingly rejected, with no order as to costs.

Key Judgments Referenced:
- Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd.
- J.G. Engineering (P.) Ltd. v. Union of India
- State of Karnataka v. Shree Rameshwara Rice Mills
- Greenhills Exports (Private) Limited v. Coffee Board
- Union of India (UOI) v. Raman Iron Foundry
- Iron & Hardware (India) Co. v. Firm Shamlal & Bros.
- Oil & Natural Gas Corpn. Ltd. v. SAW Pipes Ltd.

The tribunal emphasized that the quantification of damages and the determination of breach of contract are matters for a competent civil court to decide.

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