TaxTMI 
TaxTMI 
2018 (9) TMI 1866
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....,840/-. 3. The Petitioner claimed interest of Rs. 1,67,283/-as on 20.11.2017. The total amount claimed by the Petitioner is Rs. 30,08,123/- as on 20.11.2017. 4. The Petitioner issued demand notice in Form-3 on 20.11.2017 and it was dispatched on 22.11.2017 and delivered on 27.11.2017 to the Corporate Debtor. 5. In the counter the Respondent stated that the consignment miserably failed the quality test and as a result of which the Corporate Debtor has out rightly rejected the entire consignment after conducting quality tests. It is further the case of the Respondent that the Petitioner is liable to pay damages to the Respondent. 6. It is also the case of the Respondent that there exists a dispute between the Petitioner and the Respondent pertaining to the quality of Material supplied by the Petitioner pertaining to invoice numbered as 261, Dated 22.06.2017, Invoice numbered as 372, dated 13.07.2017 and Invoice numbered as 13, dated 08.08.2017 dispatched 200 bales of Organic cotton. 7. According to the Respondent, the cotton supplied by the Petitioner was contaminated (Poor quality) by virtue of it being:- (A) Water patched cotton where in the moisture content....
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....y of the cotton supplied by the Petitioner to the Respondent has been referred to M/s. APEX Cotton Agency (I) Pvt. Limited who is the market intermediary and exchange serving the primary function of - (a) Defining rules and regulations of trading to carry out uniform trading practice and (b) Provides dispute resolution and settlement mechanism and (c) Circulates price movements and market news to participating members. 11. M/s. APEX Cotton Agencies (I) PVT. Limited as a marked intermediary resolves claims, differences or disputes between the Buyer and Seller arising out of dealings, contracts and transactions and any disputes in relation to the quality and quantity of the physical delivery for transactions that are routed through M/s. Apex Cotton Agencies (I) Pvt. Ltd. 12. The Respondent informed the rejection of the entire consignment to the Petitioner and to the intermediary namely, M/s. Apex Cotton Agencies (I) PVT. Ltd. and requested the Petitioner to take back the defective consignment. 13. It is stated that the quality of the cotton supplied would affect the overall economics of Textile industry and that on account of the higher trash conte....
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....,627/- and Invoice numbered as 13 dated 09.07.2017 for 50 bales of C&A Cotton (Sendhwa station) amounting to Rs. 10,83,861/- which were pending on account of rejection of entire consignment on account quality and weight issues by the Respondent and Be resolved by the Respondent volunteering to come forward and make a full and final settlement of amount of Rs. 19,32,864/- be made as full and final settlement to the Petitioner against pending Invoices and claims. (e) Since the said firms M/s. RS COTTMARK (I) PVT. LTD and M/s. KRISHNA BIO TECH did not have Letter of Credit limit facility with their bankers, the said payment of Rs. 39,15,148/- shall be made by the Respondent by availing letter of credit facility with his banker and the said Letter of Credit will be drawn in the name of the Petitioner namely M/s. SAMKIT BIO FARMS LIMITED by the Respondent and (f) M/s. SAMKIT BIO FARMS for and on behalf of the Respondent i.e., M/s. Rajvir Industries shall make payment to M/s. KRISHNA BIO TECH an amount of Rs. 19,32,864/-as full and final settlement to the Petitioner and that there shall be no further claims from M/s. KRISHNA BIOTECH or M/s. SAMKIT BIO FAR....
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....have to determine: (i) Whether there is an "Operational debt" as defined exceeding Rs. 1 Lakh? (ii) Whether the documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid? And (iii) Whether there is existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt in relation to such dispute? If any one of the aforesaid conditions is lacking, the application would have to be rejected. Apart from the above, the Adjudicating Authority must follow the mandate of Section 9, as outlined above, and in particular the mandate of Section 9(5) of the Act, and admit or reject the application, as the case may be, depending upon the factors mentioned in Section 9(5) of the Act." 23. The claim made by the Petitioner in this case relate to supply of cotton bales made by the Petitioner to the Respondent/Corporate Debtor. 24. The Operational Debt is defined in Section 5(21) which reads as under:- "Operational debt" means a claim in respect of the provisio....
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....email dated 01.01.2018 to Sanjay apexcotton, Account Apex, Arpit apexcotton, marking copy of the same to SAMKIT BIO FARMS PVT. LTD. asking the SAMKIT BIOFARMS PVT. LTD. to adjust Letter of Credit value aginst the payments due to M/s. KRISHNA BIO TECH and M/s. R.S. COTTMARK (INDIA) PVT LTD i.e., Petitioner herein. 31. It is not in dispute that the Respondent issued Letter of Credit for an amount of Rs. 39,15,148/-in favour of M/s. SAMKIT BIO FARMS LIMITED. 32. It is also pertinent to mention here that the Petitioner herein, M/s. SAMKIT BIO FARMS LIMITED and M/s. R.S. COTTMARK (INDIA) PVT. LTD. filed 3 separate Petitions vide CP (IB) No.l02/2018,CP(IB)No. 101/2018, CP(IB) No. 100/2018 respectively, U/s.9 of the IB Code against the Corporate Debtor for initiation of CIRP Process. 33. A reading of the email dated 01.01.2018 clearly goes to show that the Respondent purchased 100 bales from M/s. KRISHNA BIOTECH and 100 bales from M/s. R.S. COTTMARK (INDIA) PVT. LTD. and against that Respondent obtained LS over 200 bales in favour of M/s. SAMKIT BIO FARMS LIMITED. 34. The total claim amount made by M/s. SAMKIT BIO FARMS LIMITED in CP (IB) 101/2018 as on 20.11.2017 is 10,43,562....
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....KIT BIO FARMS LIMITED has been repaid by way of encashment of LC for Rs. 39,15,148/- by M/s. SAMKIT BIO FARMS LIMITED. 43. Even if it is held that there is no repayment of Operational Debt due to the Petitioner and M/s. R.S. COTTMARK (INDIA) PVT. LTD. inspite of the fact that LC has been encashed by M/s. SAMKIT BIO FARMS LIMITED still the material on record goes to show that there exist a dispute between the Petitioner and the Respondent in respect of the Operational Debt claimed by the Petitioner. 44. In the Judgment referred supra the Hon'ble Supreme Court held that the Adjudicating Authority has to see the existence of a dispute. It is also held by Hon'ble Supreme Court that the Adjudicating Authority has to see whether there is any 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. 45. This Tribunal is of the view that there exists a dispute and because of the resolution of the said dispute only, Respondent/Corporate Debtor issued LC for Rs. 39,15,148/- in favour of M/s. SAMKIT BIO FARMS LIMITED with an understanding that after encashment of LC, ....