Adjudicating Authority Upholds Section 9 Application | Operational Debt Due & Payable

The Adjudicating Authority upheld the admission of the Section 9 application as the operational debt was confirmed as due and payable, with no substantial pre-existing dispute established. The debt fell within the limitation period, and the Appellant's claim of being denied a fair hearing was deemed unfounded. The appeal was dismissed without costs.

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Issues Involved:
1. Whether the operational debt above the threshold limit was due and payable.
2. Whether there was a pre-existing dispute discernible at the time of issuing the demand notice.
3. Whether the debt was barred by limitation.
4. Whether the Appellant was denied an opportunity of hearing due to connectivity problems.

Detailed Analysis:

1. Operational Debt Due and Payable:
The Adjudicating Authority confirmed that the total amount of debt in Part IV of the Section 9 application was Rs. 46,95,033/-, which included Rs. 18,31,644/- towards invoices and Rs. 28,63,389/- towards interest on delayed payments. The Respondent No.2 admitted the debt of Rs. 28,31,644/- in an email dated 05.08.2015, which was not disputed. The Authority found that the interest for delayed payment was part of the contractual debt, thus constituting an operational debt. The last payment of Rs. 10,00,000/- was made on 13.01.2016, and the Section 9 application filed on 09.05.2018 was within the limitation period.

2. Pre-existing Dispute:
The Appellant contended that a pre-existing dispute existed regarding the quality of the coal supplied, supported by a debit note dated 16.11.2015. However, the Authority found no evidence of this dispute being communicated to the Operational Creditor before the demand notice was issued on 12.03.2018. The Authority held that the defense of a pre-existing dispute was "moonshine" and an afterthought since no reply was framed in response to the demand notice. The Coal Quality Assessment Reports were submitted only after the Section 9 application was filed, indicating they were an afterthought.

3. Limitation:
The Authority determined that the debt was not barred by limitation. The last payment was made on 13.01.2016, and the Section 9 application filed on 09.05.2018 was within the three-year limitation period. The acknowledgment of debt in the email dated 05.08.2015 also provided a fresh period of limitation.

4. Opportunity of Hearing:
The Appellant claimed that they were denied an opportunity of hearing due to connectivity problems. However, the Authority noted that the Appellant had ample opportunity to seek a hearing, given the long gap between the last hearing date and the order pronouncement. The plea was deemed superfluous and not given any weight.

Conclusion:
The Adjudicating Authority did not err in admitting the Section 9 application filed by Respondent No.1. The operational debt was due and payable, no substantial pre-existing dispute was established, the debt was within the limitation period, and the Appellant was not denied a fair hearing. The appeal was dismissed with no order as to costs.

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