TaxTMI 
TaxTMI 
TaxTMI 
2020 (8) TMI 497
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..... 2. The brief facts of the case are as follows: The Appellant is a private limited company having a paid up capital share capital of about 2 crores 64 lakhs and is engaged in the business of manufacturing of equipments required for bulk material handling systems/ components across India. The Appellant has its registered office in Mumbai, in the State of Maharashtra. The Corporate Debtor raised certain purchase order/letter of intent on the Operation creditor in or around 2010. During the period 2010 to 2013, the Corporate Debtor availed of the goods and services of the Applicants for designing, engineering, manufacturing, supply, supervision of erection and commissioning of belt conveyors for their client M/s. Hindalco Industries Limited (unit Aditya Aluminum Project 1 and unit Mahan Aluminum Project 2). Thereafter the OC raised various invoices for the goods and services rendered to CD out of which some of them were cleared and some remained pending. The Respondent engaged M/s Hindalco Industries Limited to service the debt due and payable to the OC. The OC had agreed and/or arrived at an understanding to accept payment of its alleged dues directly from Hindalco for both the pr....
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.... in the form of quality issue as the same has arisen due to rubbing of the rubber belt against conveyor structure, as mentioned in the mails dated 29th march, 2014 and 23rd may, 2014 which was not within the scope of the Appellants work. Erection of the equipments was in the scope of respondent. e) 17-01-2015 & 28-01-2015 - Since the Respondent was facing some financial crisis, they proposed that payments for certain outstanding invoices, with regard to project 1 (Aditya), be made directly by Hindalco (to whom the respondents used to supply) to the Appellant. Accordingly, a joint meeting was held on 17th January, 2015 (mentioned as 16th Jan in the email) between both parties and Hindalco and other vendors. In the said joint meeting accounts were reconciled by all the parties and it was also agreed that balance payment to the Appellant shall be released by Hindalco directly from the Respondent's performance acceptance test invoice. It was also agreed that the Appellant shall submit performance bank guarantees (hereinafter referred to as "PBG") to the respondent and the same shall be confirmed by the respondent to Hindalco upon receipt of PBG before release of final payment. The re....
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....s consent to release an amount of Rs. 508615.47/- to the Appellant. Alongwith the said email the respondent forwarded statement of account which clearly shows that an amount of Rs. 508615.47 was due and payable to Appellant after deducting debit notes worth Rs. 2162089/- for project 2 including Rs. 15 lakhs towards rubber belt. Therefore, even after considering debit notes of Rs. 2162089/- an amount of Rs. 508615.47/- was undisputedly payable to the Appellant. j) 04-07-2015 - Hindalco vide their email dated 04-07-2015 forwarded the respondent's email dated 3rd July, 2015 along with its attachment, i.e. statement of account to the Appellant and informed that the respondent has agreed on Hindalco paying directly to the Appellant and whether the same is acceptable or not to the Appellant. This accounts statement shows debit notes of Rs. 2162089/- for project 2 which includes Rs. 15 lakhs towards rubber belt. Therefore, even after considering debit notes of Rs. 2162089/- an amount of Rs. 508615.47/- was undisputedly payable to the Appellant. k) 03-09-2015 - In response to Hindalco email dated 04-07-2015, the Appellant wrote to the respondent that the debit amounts shown by the resp....
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....ondent, however there is no such confirmation from the respondent. Hindalco also informed that they have already processed respondent case. o) 13-01-2016 In response the Appellant once again informed Hindalco to hold Respondent payment and release the same directly to the appellant. 5. It is also stated by the Appellant that in spite of having received the goods, when the balance payments were not forthcoming from the respondent despite various reminders by the appellant and assurances by the respondent, the appellant was constrained to issue a statutory demand notice dated 5th February, 2016 under Section 433 and 434 of the Companies Act, 2013 for the outstanding amount of Rs. 56,60,203/- along with interest at the rate of 27% to be compounded on monthly basis from due date of payment till actual date of payment within three weeks of the date of the notice. Since the respondent failed to comply with the said statutory notice dated 5th February, 2016 hence the appellant filed a Company Petition (L) No. 960 of 2016 in the Bombay High Court for winding up the respondent company. The same was transferred to National Company Law Tribunal, Mumbai Bench, pursuant to the amendment in C....
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.... them under aforesaid mentioned invoices, the Respondent failed to pay the said amounts due, which have accumulated to a sum of Rs. 56,21,572/-. 11. It is further submitted by the Appellant that having agreed to pay the amount against the supplies, the respondent is now seeking to resile making payments, by raising frivolous and baseless grounds to create a 'dispute' under the I&B Code. 12. It is argued by the Appellant that NCLT has erroneously sought to place reliance on one email alone issued by the petitioner to hold that there were disputes existing between the parties i.e. email dated 03.09.2016 wherein the appellant wrote to respondent that the debit amounts shown by the respondent in the statement were not acceptable since the debit notes of Rs. 15,00,000/- was also not acceptable as the damage to the conveyor belt was due to improper erection and operation of conveyor. 13. It is also further argued that the said email dated 03-09-2015 was in response to email dated 04-07-2015 from Hindalco to the appellant. An account statement showing an amount of Rs. 508615.47 due and payable to appellant after deducting debit notes of Rs. 21,62,089/- was also annexed to the said emai....
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....the respondent, as mentioned in the mails dated 29th march, 2014 and 23rd may, 2014, which was not within the scope of the appellant's work." 18. That further the appellant's reliance of emails dated 29th march, 2014 and 23rd may, 2014 are incorrect and misplaced as the supervision of erection of the belts was within the appellant's scope of work. Further as is evident from the respondent's email dated 29th march, 2014 there were other issues that were unresolved by the appellant in addition to the rubbing of the rubber belt against the conveyor structure. 19. That appellant's advocate has further represented to the NCLAT that the dispute raised by the respondent under its email dated 16 th September, 2014 was settled by the minutes of meeting dated 17th January, 2015 and confirmed under email dated 19th February, 2015. The respondent submits that the appellant has omitted to inform NCLAT that the minutes of meeting dated 17th January, 2015, pertains only to the full and final settlement amount being agreed by the parties in relation to Project 1 only and does not deal with Project 2 at all. 20. Further the respondent submits that the appellant has omitted to inform NCLAT that t....
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....rought to the notice of the Operational Creditor before the receipt of demand notice and in the reply of the Corporate Debtor to the demand notice of the Operational Creditor". 25. That the records clearly indicate that the respondent had been in dispute with the appellant since 2014 in relation to the quality of the belts supplied by the Operational Creditor and at every opportunity, had raised the dispute with respect to the bad quality of services rendered by the appellant as well as appellant's inability to complete its services contracted for within the time prescribed under the LOI and the Purchase Order. The Respondent states that there has been a complete failure on the part of the Appellant to supply the belts as expected under the terms of the LOI and purchase Order. 26. That the Appellant admits in the Affidavit-in-Rejoinder dated 11th January, 2019, that the belt supplied by it were damaged. The appellant raised the spurious defence that the belt conveyors were damaged on account of the improper alignment of conveyance structure which is falsely alleged as being outside the appellant's scope of work under the LOI and the Purchase Orders. 27. That Hindalco withheld th....