TaxTMI 
TaxTMI 
2019 (4) TMI 252
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....Rail Clips were supplied. The Operational Creditor has also annexed invoices issued by it, consignment notes and MRN registration receipts. The following communications were exchanged between the parties: (a) 1.12.2017 The Operational Creditor sent a demand notice under IBC (b) 13.1.2018 After that, the Operational Creditor sent a demand notice under IBC on 13.1.2018 calling upon payment of unpaid operational debt. (c) 18.1.2018 The Corporate Debtor through its advocates replied on 18.1.2018 denying the liability to pay. (d) 22.1.2018 The Corporate Debtor sent a reply dated 22.1.2018 stating, inter-alia, the Corporate Debtor had requested the Operational Creditor to resolve the quality issues in the material and submit Performance Bank Guarantee to enable the Corporate Debtor to release the withheld payment. The reply also states that without prejudice to the Corporate Debtor's right, it is releasing a sum of Rs. 34,66,214/-and in order to release further payment, valid Performance Bank Guarantee is required. (e) 24.1.2018 The Corporate Debtor through its advocates sent another reply dated 24.1.2018 stating that discussions are ongoing between the representatives....
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....ther reply the liability to pay is denied. 5. The Operational Creditor has annexed an affidavit to the effect that there is notice given by the Corporate Debtor relating to a dispute of the unpaid operational debt. The Operational Creditor has also annexed an affidavit confirming that the full amount due to the Operational Creditor has not been received since the date of service of invoice/ demand notice as in Form 4/ Form 3 of Insolvency and Bankruptcy (Application to Adjudicating Authority), 2016. 6. The Operational Creditor has stated that it had filed a winding-up petition against the Corporate Debtor before the Hon'ble High court at Bombay, being CP No. 865 of 2016. The aforestated petition was transferred to this Tribunal and renumbered as TCP 935/2017. This Tribunal vide an order dated 29.9.2017 abated TCP 935/2017 with liberty as mentioned in the Notification dated 29.6.2017. 7. The Operational Creditor has also annexed relevant extracts of Statement of Bank Account as Annexure E. 8. The Corporate Debtor has filed an affidavit-in-reply dated 23.11.2018 stating, inter-alia, the following a) The Operational Creditor is guilty of suppressio very suggestio falsi as it has....
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....ts letter dated 25.9.2018, inter-alia, stated that the letter by the Operational Creditor to BSE was issued as a responsible entity to apprise the authorities of the financial situation of the Corporate Debtor which has announced buy back of its shares while withholding payments of its creditors. The Corporate Debtor through its advocate's letter dated 1.10.2018 refuted the contents of the above letter and once again clarified that the proceedings before this Tribunal are distinct from the buy-back of shares. Further stated that the letter issued by the Operational Creditor was merely a desperate attempt to mislead and pressurise the Regulatory Authorities to derail the buyback process and to pressurise the Corporate Debtor to make payment. 9. The Operational Creditor has filed an affidavit-in-rejoinder dated 27.12.2018 inter-alia stating the following a) The Operational Creditor has denied that it is guilty of suppressio very suggestio falsi or has not disclosed the existence of a prior dispute between the parties. The contention of the Corporate Debtor is an after-thought. It is stated that the contention of the Corporate Debtor concerning the quality issue and short suppl....
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....n initiated against the Corporate Debtor. Further stated that the complaint filed against the buy-back of shares offer is different from the present petition. Being a creditor of the company, it is the right to complain against a company, if the company fails to pay off the debt amount and proposes for a buy-back of its shares. e) There is no prior dispute in existence between the parties. For the quality issues, the Corporate Debtor has already deducted 10% of the total material value and settled the matter. f) Withholding payment is against the business ethics as the payment had fallen due in between 21.5.2016 to 16.1.2017, the period during which the performance bank guarantee was active, i.e. being valid till 7.11.2016. 10. The Corporate Debtor averred that the purchase orders dated 26.10.2015 and 29.10.2015 contain specific clauses regarding the warranty of goods. 11. We have heard the parties and perused the record. 12. The Corporate Debtor issued a letter of intent dated 23.9.2015 to the Operational Creditor for manufacturing & supply of the Elastic Rail Clips. After that, the Corporate Debtor issued two purchase orders viz. purchase order no. EA427PO5000007 dated 29.....
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....the adjudicating authority must reject the application under Section 9(5)[ii](d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the "existence" of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the "dispute" is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defence is likely to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application." 14. The law laid down by the Hon'ble Supreme Cour....