2022 (9) TMI 323 - Tri - Insolvency and Bankruptcy

Tribunal dismisses Company Petition due to pre-existing dispute over goods quality. No merit found in perjury allegations.

The Tribunal dismissed both CP (IB) No. 373/KB/2018 and I.A. (IB) No. 1078/KB/2019. It held that a pre-existing dispute over the quality of goods supplied ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- Mere denial of payment by the Corporate Debtor without communicating the existence of dispute as to quality of goods supplied cannot be considered as 'Dispute' within the meaning of Section 5(6) of the Code. If bare denial of claim is labelled as dispute then Sections 8 & 9 of the Code would become redundant, which was not the intent of the legislature. With respect to the pre-existing dispute, the Corporate Debtor had sent an email which has been addressed to Mr. Kailash Garg on 11 February 2015 about the quality of products and that the claim was settled in half, and on 28.02.2015 wherein a calculation chart has been given for the deductions made for transportation and weight shortages. Thereafter, the Corporate Debtor has made payments to the Operational Creditor through RTGS and cheques as is evident from the emails correspondences that have been filed by the Operational Creditor - there were pre-existing disputes with regard to the quality and weight of Soya DOC provided. The Corporate Debtor has filed another series of emails from 05.092016 to 26.09.2016 wherein the Operational Creditor has requested the Corporate Debtor to pay the outstanding amount and the Corporate Debtor has time and again reiterated that all the dues have been paid, in these emails the Operational Creditor has not mentioned the amount due or given a statement but has rather asked the Corporate Debtor to look into its accounts. There is existence of pre-existing dispute hence, the Company Petition is liable to be rejected - Petition dismissed. Issues Involved:1. Pre-existing dispute regarding the debt.2. Payments made to the Operational Creditor.3. Allegations of perjury by the Corporate Debtor against the Operational Creditor.Issue-wise Detailed Analysis:1. Pre-existing dispute regarding the debt:The Corporate Debtor argued that there was a pre-existing dispute about the quality of goods supplied by the Operational Creditor. The Corporate Debtor provided several emails and Goods Received Notes (GRNs) indicating discrepancies in the quality of Soya DOC supplied. The Tribunal noted that the Corporate Debtor had communicated quality issues through emails dated 11 February 2015 and 28 February 2015, and had made payments after deducting amounts for transportation and quality issues. The Tribunal observed that the Operational Creditor had taken inconsistent stands regarding the emails sent to 'Kailash,' accepting them when beneficial and rejecting them otherwise. The Tribunal concluded that the existence of pre-existing disputes was evident, leading to the rejection of the Company Petition.2. Payments made to the Operational Creditor:The Corporate Debtor claimed that it had paid the Operational Creditor Rs. 3,09,33,015/- after deducting amounts for transportation charges and quality issues. The Operational Creditor, however, claimed an unpaid amount of Rs. 46,68,629.99/-. The Tribunal found that the last payment of Rs. 10,00,000/- was made on 27.07.2015, as evidenced by the bank statement. The Tribunal accepted the Corporate Debtor's contention that payments were made after necessary deductions, supported by emails and payment records.3. Allegations of perjury by the Corporate Debtor against the Operational Creditor:The Corporate Debtor filed I.A. (IB) No. 1078/KB/2019, seeking to prosecute the Directors of the Operational Creditor for perjury under sections 193 and 195 of the Indian Penal Code, 1860. The Corporate Debtor alleged that the Operational Creditor made false statements and submitted false evidence in the Company Petition. The Tribunal examined the allegations and found that the Corporate Debtor did not provide sufficient evidence to support the claims of perjury. The Tribunal noted that the Operational Creditor had denied the existence of an agreement and laboratory test clause, which was not mentioned in the emails. Consequently, the Tribunal dismissed the application for perjury.Conclusion:The Tribunal dismissed both CP (IB) No. 373/KB/2018 and I.A. (IB) No. 1078/KB/2019. The Tribunal held that there was a pre-existing dispute regarding the quality of goods supplied, which justified the rejection of the Company Petition. Additionally, the Tribunal found no merit in the allegations of perjury against the Operational Creditor. The Tribunal granted liberty to the applicant (Corporate Debtor) to pursue other legal remedies available under the law.