TaxTMI 
TaxTMI 
2020 (2) TMI 1124
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....ated on 16.09.2004 under the provisions of the Companies Act, 1956 having its registered office at office 1024, 10th Floor, DLF Tower-A, Jasola, New Delhi. Since the registered office of the respondent corporate debtor is in Delhi, this Tribunal having territorial jurisdiction over the place, is the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process in respect of respondent corporate debtor under sub-section (1) of section 60 of the Code. 3. The applicant, N. Padmanabanarma is a person working for gain at NAPC Limited having registered office at Apex plaza, 6th Floor, No.23, Nungambakkam High Road, Chennai. 4. The pleaded case of the Operational Creditor is as under: 4.1 The corporate-debtor approached the Operational-creditor and issued letter of intent cum work order No. Kadimi/2013/LOI/2 to the Operational-creditor on 18.03.2013 for construction of factory building at Pillaipakkam. Subsequently, the Operational-creditor entered into an agreement on 18.03.2013 with the Corporate-debtor for the aforesaid work. The consideration for the work was fixed at a sum of Rs. 8,12,00,000/- (Rupees eight crores twelve lak....
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..... 2,26,65,070/- (outstanding Principal debt) and the interest due to non-payment of the Corproate-debtor@18 % per annum till 09.07.2019 stands at Rs. 1,33,68,046.34. Therefore, total debt payment by the Corporate-debtor stands at Rs. 3,60,33,116.34/-. 7. The respondent has filed its reply on 27.08.2019 and raised various objections against the admission of the present application and the same are as following: 7.1 The present Application has been filed relying upon 5 (five) running invoices i.e., RA 17-21 (at page 29-33 of the Application). These running invoices were termed as 'interim bills' in the work order dated 18th March 2013. As per clause 9[b] of the work order dated 18th March 2013, all interim bills were to be paid within a period of 15 days from the date of certification from the Architect. Without prejudice to the fact that the bills placed on record are not certified, the payment due, if any, was in the year 2014 and 2015 whereas the present application has been filed in July 2019 after a lapse of more than 4 years. Further, the Operational-creditor has stated in the Application that the alleged amounts were 'due' in March 2015. 7.....
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....e and payments in evidence of completion: Except the final certificate no other certificate or payment against a certificate or on general account shall be taken to be an admission by the owner of the due performance of Contract or any part thereof or occupancy or validity of any claim by Contractor." 7.6 The company had issued a notice inviting tenders for construction of proposed Factory building Plant at A6 & A7, SIPCOT Industrial Park, Pillaipakkam, Seriperumbudur, Kanchipuram District, Tamil Nadu. The Operational-creditor had submitted its bid and the same was accepted by the Company. 7.7 Subsequently, an agreement dated 18.03.2013 was executed between the Company and the Operational-creditor. As per the agreement, it was the responsibility of the Operational-creditor to execute, complete, handover, maintain and guarantee all construction work that had been undertaken by the Operational-creditor at the above said premises. 7.8 As time was the essence of the Agreement, 3 work orders were issued to the Operational-creditor by the Company that highlighted the mutually agreeable terms and conditions as well as detailed scope of the work. The work orders ....
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....er receiving an application therefore from CONTRACTOR after verifying from the completion documents and satisfying himself that WORK has been completed in accordance with and as set out in the contraction and erection Drawings, and the Contract Document. CONTRACTOR, after obtaining the Completion Certificate, is eligible to present the Final Bill for WORK executed by him under the terms of CONTRACT for the portion of work included in the Completion Certificate." 7.13 Furtherance, a final certificate had to be given by the Engineer in accordance with Clauses 6,7 and 6,8 to certify completion of work by the Operational-creditor. The Operational-creditor has till date not given the Completion Certificate to the Company, because the work was never completed by the Operational-creditor. Clause 6,7 is reproduced here: 7.14 "Clause 6,7- Final Decisions and Final Certificate: Upon expiry of the period of liability and subject to the engineer being satisfied the WORK has been duly maintained by CONTRACTOR, during such period as herein before provided and the CONTRACTOR has in all respect duly made-up any subsidence and performed in his obligations under contract, the Engin....
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....es to the Corporate Debtor, and as the Corporate Debtor was able to demonstrate the existence of a pre-existing dispute in regard to deficiency of service, the application was rejected by this Tribunal and the same was upheld by the NCLAT Impex Services India (P.) Ltd. v. DBA Enterprises LLP 149 SCL 176 (NCL - AT) which was further upheld by the Hon'ble Supreme Court of India vide order dated 02.01.2019. 8. The main contention of the respondent is that there is a pre-existing dispute between the parties and the work remained incomplete by the operational creditor. 9. The Corporate-debtor had along with the reply to the aforementioned legal notices attached Schedule I list of main civil works pending, Schedule II, of the civil works rectified by the Corporate-debtor by hiring other contractors (improper construction of trenches, communicated via mail to operational-creditor) Schedule III of the work that could not be rectified due to continuous production (trench correction works communicated via mail to operational-creditor), Schedule IV of the pending work that could and should still be completed (rail water harvesting rectification work, employees toilet first floor - t....
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....ime to evade liability but certainly pre-existed much prior to the issuance of notice under section 8 of the Code. The e-mail dated 03.09.2015 reveals that the respondent requested for the accounts of the petitioner to confirm the balance which was never issued. There are allegations of non-conciliation of accounts despite request. 14. These are dealings between the parties and the claims and allegations of both sides' prima facie suggest the need for elaborate enquiry. Once there is material to believe that dispute exists, it is right to have the matter tried out before the axe, in the form of corporate insolvency resolution process falls. 15. Existence of an undisputed operational debt is sine qua non for initiating CIRP under section 9 of the Code. The Code is not intended to be substitute to a recovery forum. The moment there is existence of a dispute, the corporate debtor gets out of the clutches of the Code. In the factual background of this case 'existence of real dispute' cannot be totally overruled. 16. The provisions of section 9 (5) (ii) (d) of the Code clearly mandates that Adjudicating Authority shall reject the application when notice of dispute h....