TaxTMI 
TaxTMI 
2020 (6) TMI 558
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....der Section 9 of the Insolvency and Bankruptcy Code 2016 against the Corporate Debtor Roidec India Chemicals Private Limited for the alleged default on the part of the Respondent-Corporate Debtor in clearing the outstanding amount of Rs. 63,29,169/- (Rupees sixty-three lacs twenty-nine thousand and one hundred sixty-nine only) towards the services rendered by the Applicant. The total outstanding dues Rs. 63,29,169/- pertain to services provided to the Corporate Debtor from 09th September 2013 to 03rd January 2017. The amounts fell due after the Respondent received the invoices. 3. The Applicant contends that despite invoices were raised from time to time; the Respondent did not make the payment of the outstanding debt. 4. It is contended that the Appellant and Respondent were maintaining a mutual account in respect of the invoices raised by the Operational Creditor. The Respondent/Corporate Debtor vide his e-mail dated 10th March 2017 has admitted the debt by acknowledging the debt in its ledger account, showing the outstanding debt of Rs. 53,83,299/-, after deducting TDS, i.e. total gross operational debt of Rs. 59,81,443.33 owed to the Appellant. That despite acknowledgemen....
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....e legal team, Meanwhile this reply was to brief you, With best regards, Anil Jain" It is further to point out that in reply to the demand notice issued on 17th April 2019, the Operational Creditor sent an e-mail wherein it is stated that: "We are in receipt of a document purported to be a notice under rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2019, wherein an amount of Rs. 63,29,169/- is stated to be in default by us. Along with the notice, certain documents have been sent to us. In your notice you state that the amount claimed in your notice "is in default as reflected in the invoice attached to this notice". Unfortunately, neither from your notice nor from the documents sent therewith, it is unclear as how this amount of Rs. 63,29,169/- adds up... " 10. It is pertinent to mention that the demand notice against the Corporate Debtor was issued on 20th March 2019, which was delivered on the Corporate Debtor on 23rd March 2019. The Learned Counsel for the Corporate Debtor submitted that before issuance of demand notice there was a pre-existing dispute which is evident from the e-mail correspondence....
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.... 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 fa.ct and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the Application. 56. Going by the aforesaid test of "existence of a dispute", it is clear that without going into the merits of the dispute, the Appellant has raised a plausible contention requiring further investigation which is not a patently feeble legal argument or an assertion of facts unsupported by evidence. The defence is not spurious, mere bluster, plainly frivolous or vexatious. A dispute does truly exist in fa.ct between the parties, which may or may not ultimately succeed, and the Appellate Tribunal was wholly incorrect in charncterising the defence as vague, got up and motivated to evade liability." 14. The Learned Counsel for the Corporate Debtor further submitted that the e-mail sent to the Operational Creditor on 09th April 2018 is about one year before the filing of the application under Section 9 of the Code, by that the Corporate Debtor had disputed the claims of the Peti....
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....d down by Hon'ble Supreme Court in the above- mentioned case, it is clear that only in a situation where the Corporate Debtor within 10 days of the receipt of demand notice, has not sent the reply to the Operational Creditor, then only, an affidavit to that effect can be submitted in terms of Section 9(3)(b) of the Code. But in a case where such notice has been sent, in reply to the demand notice by the Corporate Debtor 'an affidavit to that effect cannot be given'. In the instant case, after receiving the demand notice Corporate Debtor within ten days of receipt of the demand notice raised the dispute of the unpaid operational debt. Therefore, affidavit in compliance of Section 9(3)(b) could not be submitted. Thus, it is apparent that there is no default in not providing the affidavit in compliance of Section 9(3)(b) of the Code. 16. On perusal of the record, it is crystal clear that about one year before the issuance of demand notice, the Corporate Debtor complained about the quality of service to the Operational Creditor and communicated that he has not provided services after 2015 and also informed that their services are no longer required. 17. In the circ....