Tribunal dismisses company petition for operational debt due, citing dispute over goods quality.

The Tribunal dismissed the company petition under Section 9 of The Insolvency and Bankruptcy Code, 2016 for operational debt due, citing a dispute over the quality of goods supplied and lack of proper authorization in the demand notice issued by the applicant's advocate. The respondent's objections regarding the quality of goods and discrepancies in document service were considered. The Tribunal found in favor of the respondent, concluding the dispute rendered the petition not maintainable under the Code. The petitioner was advised to pursue other avenues to enforce its claim against the respondent.

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Issues:
Petition under Section 9 of The Insolvency and Bankruptcy Code, 2016 for operational debt due.

Analysis:
The applicant, a public limited company engaged in manufacturing pipes, filed a petition under Section 9 of The Insolvency and Bankruptcy Code, 2016 against the respondent, a private limited company, for operational debt due from eleven invoices. The applicant claimed that despite supplying goods worth a specific amount, the respondent failed to make the payment, leading to the petition. The applicant also issued a demand notice under Section 8 of the Code to recover the dues. Various documents were submitted to support the claim, including affidavits, bank statements, purchase orders, invoices, and a Board Resolution.

The respondent, in its reply, raised objections, stating a dispute existed regarding the quality of goods supplied by the applicant. During the proceedings, it was observed that the demand notice issued by the applicant's advocate lacked proper authorization and supporting documents. Additionally, a dispute over the quality of goods was raised by the respondent before the demand notice was issued. It was also noted that there were discrepancies in the service of documents and errors in mentioning the respondent's name in the application.

After considering the arguments and evidence presented by both parties, the Tribunal found that a dispute regarding the quality of goods existed between the applicant and the respondent. The Tribunal also concluded that the advocate who issued the demand notice was not authorized to do so. Consequently, the Tribunal dismissed the company petition on the grounds of maintainability under the Insolvency and Bankruptcy Code, 2016. The dismissal did not prevent the petitioner from seeking other appropriate forums to enforce its claim against the respondent.

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