TaxTMI 
TaxTMI 
2017 (9) TMI 435
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....eived by the Corporate Debtor, but he has not responded to the demand notice and no notice of dispute has been given by him in terms of section 8(2) of the I & B Code. The applicant has filed several documents in support of the claim. The petitioner has given the details of the transactions on account of which debt has become due in column 1 at pages 5 to 9 of the petition. The petitioner has stated that the total amount payable is constituted of 17 different principal sums, each of the above amount fell due on different dates and each of these dates is set out in the statement, which is Annexure-VII (page nos. 480 to 492) of the petition. The petitioner has also attached the copy of the bank statement, which is Annexure-VIII, page 481 to 865) of the petition. The petitioner has attached the copy of RA bill nos. 1 to 13 Annexure-II; letter dated 14.12.2013 admitting liability towards JSPL Annexure-III; demand notice in terms of form-3 Annexure-IX; Certificate from State Bank of India confirming that no payment made of unpaid of operational debt from GPL, Annexure-X. The petitioner has also attached the copy of the Board Resolution authorising Mr. Satish Tiwari, designated as Vice....
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....such work. The applicant is not entitled to any payment against or any RA bill, which has been submitted. Heard the arguments advanced by the Ld. Counsels for both the parties and perused the record. The Id. Counsel for the petitioner has alleged that once the stage of section 4 of the Code is satisfied, the next stage as contemplated under section 8(1) and 8(2) are to be satisfied. In other words, if Operational Creditors, in terms of section 8(1) deliver a demand notice, it is mandatory on the Corporate Debtor within a period of 10 days on receipt of such notice, to bring to the notice of operational creditor, regarding existence of a dispute, if any, on record the pendency of the suit or arbitration proceedings, filed before the receipt of such notice or make the repayment of unpaid operational debt. Operational Creditor has further submitted that there has been non-compliance of section 8(2)(a) of the I & B Code, but also since the applicant being the Operational Creditor did not receive either payment against the notice of dispute under section 8(2) of the I.B. Code, the applicant was entitled to file the instant application under the provisions of sections 9(1) of the Code.....
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....r factors of default are also to be taken into consideration. It is true that in clause (2) of section 8, the word "shall" has been used and the Code has made it mandatory that after receipt of the notice, the Corporate Debtor shall within a period of 10 days of the receipt of the demand notice bring to the notice of Operational Creditor the existence of a dispute, if any, and recording of the pendency of a suit or arbitration proceedings filed before the receipt of the said notice or invoice in relation to such dispute. The above rule 8(2) imposes a statutory duty on the Corporate Debtor to make a reply within 10 days of receipt of the notice but in case a Corporate Debtor fails to respond to the notice then only on this ground the petition moved under section 9 of the I. & B. Code cannot be admitted and other factors are also to be taken into consideration to verify the fact of existence of a dispute before the receipt of such notice in relation to such debt. The demand notice issued under section 8(1) of the Code has been issued on the Corporate Debtor on 17.04.2017 and the Corporate Debtor has admittedly failed to make a reply to this notice. The Corporate Debtor has filed a d....
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....oject site; xi. Rs. 2,06,23,920/- for the temporary works materials being # unaccounted at the project site; xii. Rs. 2,54,19,320/- for the missing and/or damaged equipment in the project; xiii. Rs. 1,98,54,838/- for the reimbursement payable by the employer on account of taxes/statutory dues paid by DBM; xiv. Rs. 3,52,39,000/- unbilled amounts, for works carried out by DBM; Accordingly, in view of admitted termination of the contract by the respondent, the question of application being immediate entitlement to any outstanding amount against any running bill raised by it or retention amount or bank guarantees cannot be decided by the Adjudicating Authority. It is also undisputed that the petitioner itself invoked arbitration clause of agreement and the matter is pending before the Arbitral Tribunal. Since the petitioner himself has invoked the arbitration clause, thus, it is clear that there was pre-existing dispute relating to the claim raised by the Operational Creditor. It is also pertinent to mention that the petition under section 9 of the I.B. Code cannot be admitted only on the ground that the Corporate Debtor has failed to make the reply of notice issued under sect....
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....tion and Conciliation Act, 1996 for the same matter and arbitration proceedings were pending prior to issuing of demand notice by the Operational Creditor. It is also clear from the record that the applicant itself had filed an application under section 11 of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator to adjudicate the dispute and differences by and between itself and the respondent in respect of contract for construction of berths at Gopalpur Port under the afore-mentioned work order. The applicant has sought adjudication of all disputes arising out of the said contract including those that have arisen on the termination of the same in the arbitration and by an order dated 12th May, 2017, the applicant's application under section 11 of the Arbitration & Conciliation Act, 1996 had been allowed by the Hon'ble Orissa High Court and dispute has been referred to arbitration. The above fact is admitted at page 5 of affidavit-in-opposition. Section 5(6) of the Insolvency & Bankruptcy Code, "dispute" includes a suit or arbitration proceeding relating to - (a) the existence of the amount of debt; (b) the quality of goods or service; (c) the breach o....