AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (4) TMI 641
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndent'). 2. The Applicant, the Operational Creditor, namely M/s. A.B. Stainless Steel is a partnership firm, having PAN No. AASFA6512F, having its registered office at 56th, First Floor, Office No. 10, Kika Street, Gulalwadi, Mumbai -400004, Maharashtra, inter alia, engaged in the business of manufacturer, supplier, wholesaler and trader of S.S., C.S., M.S. & Alloy Steel Pipe, Fittings & Flanges, all types of Industruial Valves, M.S. Angle, Channel & Plates, 3. The Respondent, namely M/s. International Coil Limited, is a company incorporated on 2-7-2004 under the provisions of Companies Act, 1956 with CIN No. U29192DL2004PLC127325, having its registered office at A-21/24, Naraina Industrial Area. Phase-II, New Delhi 110028. The Authorised Share Capital of the respondent, company is Rs. 5,00,00,000/- and Paid-up Share Capital of the company is Rs. 5,00,00,000/- as per Master Data of the company. 4. It is the case of the applicant, that the Corporate Debtor approached the Operational Creditor in 2015 and represented that the Corporate Debtor had been assigned project at Mundra Solar PV Limited at Village Wandh, Taluka: Mundra, District Kutch, Gujarat (hereinafter referred to a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....it the aforementioned cheques. It is also submitted that the last invoice was raised by the Operational Creditor on 23-12-2016, since then Operational Creditor has been following up with the representatives and authorised personnel of the Corporate Debtor for clearing dues. Representatives of Corporate Debtor assured' the Operational Creditor that the payment Will be cleared before Diwali vide email dated 18-10-2016, however, the Corporate Debtor failed to honour its commitment. It is also submitted that the Corporate Debtor had acknowledged the liability of outstanding amount and also assured that the outstanding payment would be cleared at the earliest, vide email dated 12-12-2017. 7. It has further been stated by the Applicant, that on 23.09.2017 the Corporate Debtor, in order to create fictitious dispute, filed a frivolous suit for recovery of liquidated damages along with pendente lite and future interest, bearing Civil Suit No. 1018/2017 titled "International Coil Ltd. v. A.B. Stainless Steel" in the court of Sh. Chandra Shekhar, Ld. ADJ, Patiala House Courts, New Delhi (hereinafter referred to as the "said suit"). It has further been submitted that a compromise was ente....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t did not reply. On failure to pay the outstanding dues by the Respondent, the applicant sent a demand notice dated 10-10-2018, under section 8 of the Insolvency & bankruptcy Code, 2016 to the respondent asking them to make the entire payment of Rs. 1,56,24,690/- (Rupees One Crore Fifty Six Lakhs Twenty Four Thousand Six Hundred Ninety) [comprising of due principal amount of Rs. 1,07,22,704/- and interest charged @ 24% from the due date of the invoices till 10-10-2018], within 10 days from receipt of the notice, failing which the applicant shall initiate the Corporate Insolvency Resolution Process against the Respondent. 11. The applicant has annexed postal receipt, along with the tracking report, showing the delivery of the said demand notice at the registered office as well as the corporate office of the Corporate Debtor, 12. After the delivery of demand notice sent under section 8 of the Code, the Respondent has filed its reply through its counsel, to the said notice. In its reply it has been stated that, it had issued purchase orders to the Operational Creditor and the same were accepted by it, time was the essence of the agreement, as the articles was required to be delivere....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e articles were required to be delivered as per the prescribed period mentioned in the respective purchase orders. 16. The Respondent further states that, the Operational Creditor proved to be a defaulter supplier as it had not supplied articles within the agreed delivery period which was specifically stated in the said purchase orders i.e., defect liability period shall be for 12 months from the date of commissioning or 18 months from the date of dispatch, whichever is earlier. It also submitted that the Operational Creditor had breached the agreement by delivering incomplete set of articles. The Corporate Debtor also submits that, against the total value of the said purchase orders the Operational Creditor had supplied the articles for the aggravated value. Thus, making the articles costlier which was never agreed or approved by the Corporate Debtor. 17. The applicant in its Rejoinder states that, Once IRP has been appointed and a moratorium is declared, the directors of the company are no longer in the management of the company, therefore, the company could not file a civil suit. However in the present case CIRP was triggered against the Corporate Debtor on 16-8-2017, in "Maxi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... . 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 defense which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defense 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." In the present case, there is no such dispute as pre-existing, the dispute which was being claimed to be pre-existing by the corporate debtor did not survive. The record reveals that, the Operational Creditor filed an application under Order XXIII Rule 3 of CPC, 1908 in International Coil Ltd. case (supra) for disposing off the said suit in terms of the compromise deed dated 23-5-2018. Thereafter, Ld. Additional District Judge, Patiala House Courts New Delhi, vide o....