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TaxTMI 
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2020 (8) TMI 382
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....e impugned order on 30.09.2019 at paragraph 14 to 16 had observed the following: - "14. As per the invoices issued by the operational creditor from time to time with regard to supply of aluminum / M.S. Shuttering material to the 'Corporate Debtor' it is proved beyond doubt that 'goods' in terms of Section 5(21) of the Code were procured by the 'Corporate Debtor' from the 'Operational Creditor' on various occasions. It is patent from the perusal of the invoices and the delivery challans that the 'Corporate Debtor' had acknowledged the receipt of goods from the petitioner firm. 15. For determination of the aforesaid issue it would be necessary to read the definition of the expression 'Operational Debt' given in Section 5(21) of the Code and the same is set out below: - Section 5(21) (21) "operational debt" means a claim in respect of the provision of goods or services including employment or a debt in respect of the repayment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority. The definition of operational debt postulates that it is a claim, interalia, in respect of the provision o....
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....nce of a 'pre-existing' dispute, the 1st Respondent / 'Financial Creditor' projected an application u/s 9 of 'I&B' Code claiming a sum of Rs. 62,06,786 as an outstanding sum. The grievance of the Appellant is that the said application was filed before the Adjudicating Authority despite the fact that Section 8(1) Demand Notice was not delivered to it and there was a pre-existing dispute in the matter. 7. The clear-cut stand of the Appellant is that no Demand Notice was delivered to the Appellant in terms of Section 8 of the Code and further that no 'Affidavit' was filed as per Section 9(3)(b) of the 'Code'. Apart from that, there exists dispute between the parties and no 'debt' is due and payable. 8. According to the Appellant, the 1st Respondent / 'Operational Creditor' had filed an application before the Adjudicating Authority by suppressing material facts and without disclosing that there was 'pre-existing dispute' between the parties. Moreover, the Adjudicating Authority ('NCLT') New Delhi, Principal Bench while passing the impugned order on 30.09.2019 had not taken into consideration the defenses raised by the 'Corporate Debtor'. In fact, the Adjudicating Authority had ignore....
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....ional Creditor' for its goods and services and quality of materials and the said appreciation letter indicates that the 'Corporate Debtor' was fully satisfied with the material and the business standard of the 'Operational Creditor'. 15. The Learned Counsel for the 1st Respondent projects an argument that since October, 2015 and later, during the financial year 2016-2017 and as per Last 'Invoice' till 23.05.2017, the 'Operational Creditor' had supplied materials, goods etc. to the 'Corporate Debtor' amounting to Rs. 5,21,91,380.72/- against which a payment of only Rs. 4,59,84,594/- was received from the 'Corporate Debtor'. 16. The Learned Counsel for the 1st Respondent takes a stand that the 2nd Respondent / 'Corporate Debtor' had relied on three years old forged and fabricated letters to raise the false ground of 'pre-existing dispute' and this alleged forged letters are created in a single night for taking an illegal defence of 'dispute'. Also, the 1st Respondent was shocked that the signatures and Company's seal on the Letter / Reply 27.7.2016 was fabricated by the 2nd Respondent / 'Corporate Debtor' with an intent to mislead this Tribunal. Indeed, the 2nd Respondent / 'Corpor....
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....porate Debtor'. 21. The Learned Counsel for the 1st Respondent contends that on earlier occasion, the 2nd Respondent / 'Corporate Debtor' went into 'Insolvency' and 'CIRP' was issued against it and that the 'Corporate Debtor' filed an Company Appeal(AT)(Ins.) No. 484/2018 before this Tribunal and raised an illegal defence of not receiving the 'Demand Notice' and subsequently, settled the matter with the 'Operational Creditor'. 22. In the 'Application before the Adjudicating Authority the 1st Respondent /Operational Creditor under Part- IV column the due amount from the 2nd Respondent /Corporate Debtor had mentioned as Rs. 61,24,637/- along with interest at 24% p.a. amounting to Rs. 22,04,870/-, in all a sum of Rs. 83,29,507/- 23. It is the stand of the 1st Respondent that it filed an additional affidavit stating that the validity of alleged letters is not admissible in the eye of law and also that it is a blatant lie to contend that the Appellant had not received the Section 8 Notice. 24. It transpires from the contents of Affidavit dated 06.01.2020 of the 2nd Respondent (IRP) of the 'Corporate Debtor' that the 2nd Respondent had received and verified the claims, received from ....
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.... date the Appellant, or the other members of the suspended management of the 'Corporate Debtor', has not provided the pertinent documents and information sought for, except the financial statement for the year 2018-19 and the tax audit reports. Furthermore, the suspended management of the 'Corporate Debtor' had also failed to provide substantial data for the payment of the salaries or the expenses likely to be incurred by the business so as to facilitate the 2nd Respondents (RP) to obtain sanctions of the required amount. In respect of the Home Buyers, the Appellant had failed to furnish to the 'Resolution Professional' of the 2nd Respondent the relevant contracts as well as the pertinent information as to the payment plans entered into by the Home Buyers together with the details about the accounts of the Home Buyers mentioned by the 'Corporate Debtor'. 30. The Learned Counsel for the 2nd Respondent refers to the Affidavit of the Resolution Professional dated 28.1.2020 and points out that the suspended management of the 'Corporate Debtor' are not sharing the information / documents in details and / or even violating the period of moratorium by registering sale deeds in favo....
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....s annexed to the Bankruptcy Law Reforms Committee Report, Section 5(4) defined "dispute" as meaning a "bona fide suit or arbitration proceedings....". In its present avatar, Section 5(6) excludes the expression "bona fide" which is of significance. Therefore, it is difficult to import the expression "bona fide" into Section 8(2)(a) in order to judge whether a dispute exists or not." 35. The Learned Counsel for the Appellant forcefully submits that the application of the 1st Respondent / 'Operational Creditor' claims that notice was returned as 'unclaimed' and if that be the case, then the Demand Notice was not delivered as per Rule 5(ii) of the Insolvency and Bankruptcy (application to Adjudicating Authority) Rules, 2016. Furthermore, it is the crystalline stand of the Appellant is that the Adjudicating Authority wrongly assumed that service was effected and further that it is an admitted fact that no notice through electronic mail' was delivered and notice by hand was given and the notice claimed to have been given was returned as unclaimed. Therefore, the impugned order of the Adjudicating Authority was passed on wrong premises and the same is liable to be set aside, in the int....
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.... by hand or electronic mail service to the 'Corporate Debtor' relegates to the background and it pales into insignificance because of the fact that failure/omission to effect service by hand or electronic mail service is not fatal to the instant case. 38. As per Section 3 (23) (e) of the I&B Code 'person' includes 'Partnership' and as per Section 5 (20) of the Code 'Operational Creditor' means a person to whom an Operational Debt is owed etc. The 1st Respondent/Financial Creditor's name as a 'Partnership Firm' finds a place in the 'Register of Firms', as per Delhi Partnership (Registration of Firms Rules 1972) as observed by the Adjudicating Authority in the impugned order. Moreover, a Partnership Deed dated 06.05.2005 was placed on record before the Adjudicating Authority. Therefore, the application filed by the 1st Respondent/ Operation Creditor before the Adjudicating Authority under Section 9 of the I & B Code is perfectly maintainable in law. 39. It is to be relevantly pointed out that a 'dispute' does not mean a mere denial viz. no payment is due because there is a dispute. It is to be remembered that I & B Code is not substitute for 'Debt Enforcement Procedure'. 40. In th....
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....orporate Debtor'. Although, the Appellant has taken a plea that these cheques were issued by the 'Corporate Debtor' for some other project and not for the project concerning the subject matter in issue, the same is not established by the Appellant to the subjective satisfaction of this Tribunal. 43. It is not in dispute that the 2nd Respondent / 'Corporate Debtor' had procured the goods from the 1st Respondent / 'Operational Creditor' on several occasions and that the 'Corporate Debtor' had acknowledged the receipt of 'Goods'. Suffice it for this Tribunal to significantly point out that the 1st Respondent / 'Operational Creditor' had supplied Aluminum / M.S. Shuttering Material to the 'Corporate Debtor'. Section 5(21) of the 'I&B' Code defines 'operational debt'. If a 'Debt' is due and payable one to the 'Operational Creditor' by the 'Operational Debtor' then the said 'Debtor' will squarely come within the purview of the ingredients of the definition of Section 5(21) of the Code. In a given case, if it is exhibited that there is a clear default of minimum of Rs. 1/- Lakh, then the dispute in regard to quantum of the amount claimed can not be an hindrance in admitting an Appl....
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....its owner may be different and mainly the allottees (financial creditors), financial institutions (financial creditors) operational creditors are different for such separate project. Therefore, all the asset of the company (Corporate Debtor) are not to be maximized. The asset of the company (Corporate Debtor-real estate) of that particular project is to be maximized for balancing the creditors such as allottees, financial institutions and operational creditors of that particular project. Corporate Insolvency Resolution Process should be project basis, as per approved plan by the Competent Authority. Any other allottees (Financial Creditors) or financial institutions/banks (other financial creditors) or operational creditors of other project cannot file a claim before the Interim Resolution Professional of other project and such claim cannot be entertained. So, we hold that Corporate Insolvency Resolution Process against a real estate company (Corporate Debtor) is limited to a project as per approved plan by the Competent Authority and not other projects which are separate at other places for which separate plans approved. For example- in this case the Winter Hill- 77 Gurgaon Projec....