Appeal dismissed as Tribunal upholds Adjudicating Authority's decision on operational debt under IBC.

The appeal was dismissed by the Appellate Tribunal as the Adjudicating Authority's decision under Section 9 of the IBC was upheld. The existence of a pre-existing dispute between the parties regarding the operational debt was established through the Respondent's communications and the debit note raised for service deficiencies. The Tribunal found no legal infirmity in the Adjudicating Authority's decision, aligning with the principles set forth in the "Mobilox Innovations" case, and concluded that the Appellant failed to substantiate their claims.

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Issues Involved:
1. Existence of Operational Debt
2. Acknowledgment of Debt
3. Pre-existing Dispute
4. Adjudicating Authority's Decision

Detailed Analysis:

1. Existence of Operational Debt:
The Appellant (Operational Creditor) claimed that the Respondent (Corporate Debtor) owed a sum of INR 1,10,04,298 for services and equipment leased under various agreements. The Appellant maintained mutual open and current running accounts for these transactions and raised invoices fortnightly, which the Respondent was required to pay within thirty days. The last payment from the Respondent was made on 6th October 2018, and the last invoice was raised on 1st February 2019. The Appellant sent multiple emails requesting payment, and the Respondent acknowledged the debt in an email dated 19th July 2018.

2. Acknowledgment of Debt:
The Appellant argued that the Respondent had acknowledged the debt of INR 1.12 crore in an email dated 19th July 2018, which included a repayment plan. The Appellant also sent a demand notice on 20th April 2019, claiming a total amount of INR 1,17,65,461, including interest. However, the Respondent replied to the demand notice on 28th April 2019, denying the acknowledgment of debt and stating that the email was sent in good faith and not as a formal acknowledgment.

3. Pre-existing Dispute:
The Respondent contended that there was a pre-existing dispute regarding the operational debt. They argued that the power supply from the Appellant was irregular, causing them to incur additional costs by sourcing power from the Tamil Nadu Electricity Board. The Respondent raised a debit note on 28th November 2018 for INR 55,53,730 due to frequent tripping and service deficiencies, which the Appellant initially resisted but later agreed to reconcile. The Adjudicating Authority noted these disputes and relied on the Supreme Court's judgment in "Mobilox Innovations Private Ltd. Vs Kirusa Software Private Ltd., 2018 (1) SCC 353," which mandates rejecting an application under Section 9 of the IBC if a pre-existing dispute is established.

4. Adjudicating Authority's Decision:
The Adjudicating Authority dismissed the Appellant's application under Section 9 of the IBC, 2016, citing the pre-existing dispute between the parties. The Authority considered the Respondent's reply and the email communications, which indicated ongoing disputes about the operational debt. The Appellate Tribunal, after reviewing the records and arguments, upheld the Adjudicating Authority's decision, stating that the Appellant failed to demonstrate any legal infirmity in the impugned order.

Conclusion:
The Appeal was dismissed due to the existence of a pre-existing dispute, as evidenced by the Respondent's communications and the debit note raised for service deficiencies. The Tribunal found no merit in the Appellant's claims and upheld the Adjudicating Authority's decision, aligning with the principles laid out in the "Mobilox Innovations" case.

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