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TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 1442
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....ef averments for the consideration of the application, are the following: The Applicant/Operational Creditor is engaged in the business of manufacturing, processing, extracting, refining, importing, exporting, trading, dealing and other ancillary works relating to soya products. The applicant supplied Soya De-Oil-Cake (Soya DOC) from time to time against the orders received from the Corporate Debtor during the calendar year 2013. There were regular supply of materials and receipt of payment for the same during the calendar year 2013. Payments made against the specific invoices have been accounted accordingly and certain ad hoc payments have been set-off against pending invoices on FIFO basis. While doing so, the Corporate Debtor defaulted in paying Rs. 37,50,212/- (Rupees Thirty Seven Lacs Fifty Thousand Two Hundred Twelve Only) against the invoices issued by the Operational Creditor in favour of the Corporate Debtor. Thereby the above said amount towards outstanding invoices raised against copies of Broker Receipts Plus Rs. 31,77,360.05 (Rupees Thirty One Lacs Seventy Seven Thousand Three Hundred Sixty and Paise Five Only) as interest @ 18% per annum on the aforesaid debt amount....
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....he applicant. The Corporate Debtor has no debt or liability towards the applicant. The application has been filed suppressing material facts and failed to disclose several documents and records which categorically show that no money is due or payable by the Corporate Debtor to the applicant. The Corporate Debtor is in the business of manufacture and retail of finished animal feeds, including poultry feeds, fish feeds and pig feeds. In the usual and ordinary course of business, the Corporate Debtor purchases raw materials, including Soya de oiled cake (in short "Soya DOC") from the market. The specification of Soya DOC is well documented and evident from websites of established manufacturers of Soya DOC. Sometime in the year 2013, Mr. K.C. Garg, a director of the applicant was introduced to the Corporate Debtor through an agent of the applicant. An agreement was entered into in between the Operational Creditor and the Corporate Debtor at the office of the Corporate Debtor in Lucknow for supply of Soya DOC upon certain terms described in the reply affidavit. The terms agreed into between the Applicant and the Corporate Debtor are necessary to be implied to give business efficacy to t....
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....ies on this aspect on 5th and 6th September, 2016. To the demand notice dated 25th September, 2017, the Corporate Debtor has sent a reply on 27th November, 2017 by denying and disputing the claim of the Operational Creditor. The e-mails referred to above have been suppressed by the applicant and a false affidavit has been filed stating that there is no notice given by the Corporate Debtor relating to the dispute as to the unpaid operational debt. The two invoices referred to in the application were fabricated along with the consignment note at page Nos. 34, 35, 38 & 39 in the application. The invoices referred to in such pages were never raised on the corporate debtor. (e) The applicant has annexed copies of several 3rd party documents including documents apparently executed between M/s. Ganesh Trading Company, the agent of the applicant and the applicant itself. The Corporate Debtor is not aware of such documents and the contents thereof are specifically denied and disputed. The Operational Creditor is disentitled to make an application u/s 9 of the Insolvency and Bankruptcy Code, 2016. The application is misconceived, mala fide and vexatious and is liable to be dismissed with c....
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....red as alleged on the other hand the test reports submitted along with the reply affidavit vide Annexure 'C' & Annexure 'D' have been fabricated and manufactured for the purpose of litigation so also there was no intimation with respect to price deduction against the quality was ever intimated by the Operational Creditor by the Corporate Debtor. There was no payment at the prevailing market rate for De Oiled Rice Bran as written in the reply affidavit. There was no agreement that goods to be supplied with the prevailing market rate as published in standard marketing portals like Agri news as referred to in the reply affidavit by the Corporate Debtor. The contention that Rs. 5,00,000/- (Rupees Five Lacs Only) was paid in full and final satisfaction of this claim is also incorrect. The e-mail being Annexure 'F' referred to in the reply affidavit evident that no dispute about the quality was recorded and no statement was made that there had been any deduction. There is no suppression of material facts. Actually no dispute has so far been raised on the side of the Corporate Debtor. It is also incorrect to say that the Corporate Debtor was not in receipt of the bills. An amount of Rs. 6....
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.... goods supplied to the Corporate Debtor and upon the said grounds, prays for rejection of the Application. One another contention also raised on the side of the Corporate Debtor that it was not in receipt of two invoices out of the four invoices allegedly issued by the Operational Creditor. 11. The Operational Creditor claims that it issued four Invoices (Exhibit B series), dated 1-7-2013 and 3-7-2013 respectively and Rs. 37,50,212/- is the outstanding amount due after deducting a payment of Rs. 5,00,000/- as on 1-07-2014. According to the Operational Creditor, the above said outstanding debt due from the Corporate Debtor is due with interest @ 18% to the tune of Rs. 30,51,599.51 by totalling Rs. 68,01,811.51. The invoices Exhibit B series referred to at pages 32 and 36 were admittedly delivered to the Corporate Debtor and according to the Corporate Debtor, no amount as per the Exhibit B series invoices referred to above is due. According to the Corporate Debtor, the Invoices referred to at page 34 i.e. SBD 13-00029 dated 1-7-2013 and Invoice at page 38, being No. SBD 13-00035 dated 3-7-2013 are disputed, contending that those invoices were not delivered to the Corporate Debtor. ....
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....ute. 14. Coming to the contention that there is no amount due and that the amount liable to be paid has been discharged also, there is no supporting proof produced on the side of the Corporate Debtor. It is contended in the reply notice as well in the reply affidavit that the Corporate Debtor is not liable to pay any amount as claimed for. The Ld. Senior counsel appearing for the Respondent/Corporate Debtor referred to Annexure A to the reply notice dated 27-11-2017 to prove that the liability to pay for the goods supplied to the Corporate Debtor is @ Rs. 11,900./- per M.T. and not @ Rs. 32,100/- per M.T. as shown in the exhibit B invoices. According to him, the goods delivered to the Corporate Debtor is not Soya DOC but De Oiled Rice Bran and to prove that there is difference of quality of goods and difference of rate for the quantity of goods supplied to the Corporate Debtor, the only document which they relied upon is Annexure A to the reply notice. This Annexure A has been seriously disputed on the side of the Operational Creditor. According to the Ld. Counsel appearing for the Operational Creditor, it is a fabricated document. This document also seen not brought to the notice....
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....can only be substantiated upon production of proof of payment. Other than payment of Rs. 5 lacs, no other payment was made by the Corporate Debtor. Therefore, the plea of discharge is not established in the case in hand. 17. The next contention on the side of the Corporate Debtor is that the goods delivered to the Corporate Debtor is not the goods referred to in the invoices but were De Oiled Rice Bran which is a substandard product, of which payment @ Rs. 11,900/- per M.T. alone is liable to paid by the corporate Debtor. The said contention is also seen raised by the Corporate Debtor for the first time in the reply affidavit. It is contended that there was an agreement entered into between the Operational Creditor and the Corporate Debtor fixing certain terms and conditions for placing orders and supply of goods. That contention is also seen denied by the Operational Creditor by filing the rejoinder. In regard to the terms of contract either oral or written, allegedly entered into in between the parties, here in this case, no supporting proof forthcoming other than the contentions raised in the reply affidavit and the reply notice to the demand notice sent by the Corporate Debtor....
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....rd to the quality and if the quality of goods is not as mentioned in the invoice, the reduced rate which the corporate Debtor allegedly liable to pay is alone to be paid by the Corporate Debtor, here in this case no supporting proof. Therefore, the contention that the goods delivered to the Corporate Debtor, being substandard, the corporate Debtor is not liable to pay the amount demanded by the Operational Creditor is found devoid of any merit. 21. It is also significant to note here that the Operational Creditor has issued a demand notice on 03-09-2016 under Sections 433 and 434 of the Companies Act, 1956. To the said notice, no reply was issued on the side of the Corporate Debtor. The Ld. Senior Counsel appearing for the Corporate Debtor submits that because of exchange of E-mails in between the parties in continuation of the demand notice dated 03-09-2016 (Exhibit F) and since the Corporate Debtor has sent a reply to the E-mail dated 05-09-2016, the Corporate Debtor did not opt to send a reply to the demand notice. The E-mail referred to above dated 05-09-2016, admittedly received by the Operational Creditor, does not reveal any dispute regarding the quality of goods or non del....
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....bitration proceedings and not otherwise. This would lead to great hardship; in that a dispute may arise a few days before triggering of the insolvency process, in which case, though a dispute may exit, there is no time to approach either an Arbitral Tribunal or a court. Further, given the fact that long limitation periods are allowed, where disputes may arise and do not reach an Arbitral Tribunal or a Court for up to three years, such persons would be outside the purview of Section 8(2) leading to bankruptcy proceedings commencing against them. Such an anomaly cannot possibly have been intended by the legislature nor has it so been intended. We have also seen that one of the objects of the Code qua operational debts is to ensure that the amount of such debts, which is usually smaller than that of financial debts, does not enable operational creditors to put the corporate debtor into the insolvency resolution process prematurely or initiate the process for extraneous considerations. It is for this reason that it is enough that a dispute exists between the parties." 24. The above said judgment is in no way helpful to substantiate the argument advanced on the side of the Corporate De....
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....efore, the claim is barred by limitation. In the alternative, he also relied upon entry No. 15 of the schedule of the Limitation Act, 1963. As per the entry No. 15 of the Schedule of Limitation Act, 1963, for the price of goods sold and delivered to be paid for after the expiry of a fixed period of credit, the three years period runs from when the period of credit expires. Even if the period of 60 days credit is given in the case in hand even then the period expired because it was filed after three years from the date of payment and hence the filing of the Application is beyond the period of limitation and therefore, it would not lie. 30. The Application seen filed after 31/2years of the starting of period of limitation. There is no acknowledgment in writing as laid down under Section 18 of the Limitation Act, 1963 in the case in hand. Applying Section 19 of the Limitation Act, 1963, the period of limitation in the case in hand would run from the payment of part consideration of the amount due i.e. 01-07-2014. It is significant to note here that the Code has been amended by adding Section 238A to Section 238 of the Code by applying the provisions of the Limitation Act, 1963 to the....