AI Drafter 
TaxTMI 
TaxTMI 
2020 (3) TMI 1251
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....iness of apparels, hosiery garments and other accessories through its retail outlets under the name and style of 'Bazar India' 5. The corporate-debtor purchased hosiery garments and apparels ('the goods') from the operational-creditor from time to time and the operational-creditor supplied the same based on the written/verbal orders received from the corporate-debtor from time to time. 6. Since the corporate-debtor was regularly transacting with the operational-creditor, the operational-creditor as a matter of trust and relying on the promise of the corporate-debtor was supplying the goods on a credit of 30 (thirty) days. The operational-creditor was maintaining a running account in respect of the business dealings with the corporate-debtor and against which random payments were made by the corporate-debtor from time to time. The amounts thus randomly paid by the corporate-debtor, were settled against the outstanding invoices by the operational-creditor as per FIFO (first-in-first-out) rule. There has been no dispute with respect to any of the supplies made by the operational-creditor and the same were duly received by the corporate-debtor without any protest ....
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....enty Five Paise) along with 18 per cent interest from the date of each unpaid invoice. 16. The statutory demand notice dated 06th August, 2019 in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016 was sent by the applicant through its Advocate Mr. Manorath Rathi, RJA Legal, Law Offices, which was duly received by the corporate debtor through E-mail on 07.08.2019 and through registered Post on 09.08.2019. The corporate debtor failed to pay the defaulted sum within the prescribed period of ten days from the service of notice via E-mail on 17.08.2019 or from service of notice via registered post on 19.08.2019. 17. True copy of the Statutory Demand Notice, dated 06.08.2019, issued under the code to the corporate debtor along with the proof of dispatch and delivery as Email copy and postal receipt and India Post Tracking status are annexed as Annexure A-6 (Colly). 18. In this manner the corporate debtor continues to be in default as regard to payment of the sum of INR 21,27,034.75 (Rupees Twenty One Lacs Twenty Seven thousand thirty four rupees and seventy five paise) along with 18 per cent interest from the date of each unpaid invoice as the corporate d....
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....settlement on [email protected] in five minutes. Copy of the whatsapp chat between Sh. Arun Somani and accountant of the respondent company dated 24.05.2019 is annexed as Annexure-4. vii. That on 24.05.2019 at 3:34 PM, applicant through its employee's id '[email protected]' sent an email to the respondent on its email id [email protected] stating that after the payment of 25,00,000/- through cheques mentioned below, account will stand settled. A photocopy of the email was also sent on applicant's email id [email protected]. 30.05.2019- 10,00,000/- (Chq. No. 018354)27.05.2019 - 5,00,000/- (Chq. No. 018322)28.05.2019 - 5,00,000/- (Chq. No. 018323)01.06.2019-5,00,000/- (Chq. No. 018325) Copy of the email dated 24.05.2019 sent by the applicant to respondent is annexed as ANNEXURE-5. viii. That again on 24.05.2019 at 3:49, applicant through its employee's id '[email protected]' sent an email to the respondent stating that against the payment of Rs. 25,00,000/- amount of Rs. 47,54,016.75/- stands settled. Applicant also promised that after receiving the cheques, applicant will send t....
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....tted that corporate-debtor has neither disputed the unpaid invoices nor the existence of unpaid operational debt but has falsely stated that the unpaid operational debt was waived off by one Mr. Arun Somani. xv. Further the applicant is engaged in the wholesale trade of hosiery items and is not a facilitator as claimed by the corporate-debtor, the goods sold by the applicant to the corporate-debtor are at first place purchased by the applicant and as such are the property of the applicant. xvi. Further Arun Somani is an independent facilitator between various sellers and purchasers and he is neither a key persons nor an employee or agent of the applicant and as such has no authority to act on behalf of the applicant. xvii. Further, no discount to the waiver and much less settlement in respect of the unpaid operational debt was ever offered by the applicant to the corporate-debtor. The corporate-debtor had not adduced any document credit note or communication from the applicant. xviii. Further, the facilitator has also categorically admitted that no settlement was ever discussed by the corporate-debtor on behalf of the applicant and the corporate-....
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....eless and false. 27. He further submitted that the corporate-debtor did not raise any notice of dispute as mandate under Section 8(2) of the IB, Code and it is equally well settled that in interpreting a statue, effort should be made to give effect to each and every word used by the legislature and in this regard he placed reliance upon a decision reported in (2005) 2 SCC 271. 28. He further submitted that the corporate-debtor is trying to raise a frivolous dispute. 29. He further submitted that the disputes must be between the two parties that is in between the operational-creditor and the corporate-debtor and not in between the third parties, as held by the Hon'ble NCLAT in Chetan Sharma Vs. Jai Laxmi Solvents (P) Ltd. & Anr. Company Appeal (AT) (Insolvency) No. 66 of 2017. 30. On the other hand, Learned counsel appearing for the corporate-debtor ("hereinafter referred as CD") in course of arguments submitted that the present proceeding is illegal, and instituted to extract the money from the respondent, which has already been settled by Arun Somani. 31. He further submitted that the present proprietorship firm is though registered in the name of Shipra Somani ....
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....one through the averments made in the applications, reply and rejoinders as well as document enclosed with the application, reply and rejoinders and the decisions on which both the parties have placed their reliance, and we find that it is admitted fact that on 6th August 2019, a demand notice was prepared and it was sent on 8th August 2019, on the registered address of the CD and same was duly delivered on 9th August 2019 on the registered address of the CD, which would be evident from the tracking report available as Page 53 of the paper book. 42. We further find that after receipt of the demand notice the respondent has not sent the reply to the demand notice as required under Section 8(2) of the IB, Code. 43. At this juncture, we would like to refer the argument advanced on behalf of the learned counsel appearing for the CD, who in course of his argument submitted that, since the demand notice was sent by the sole proprietorship firm, therefore, it cannot be taken as a valid notice. He further submitted that even if no reply to the demand notice is given, if the CD is able to establish the pre-existing disputes, that can be looked into even if no reply of the demand notic....
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....1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under subsection (2) of section 8, the operational creditor may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process. (2) The application under sub-section (1) shall be filed in such form and manner and accompanied with such fee as may be prescribed. (3) The operational creditor shall, along with the application furnish- (a) A copy of the invoice demanding payment or demand notice delivered by the operational creditor to the corporate debtor; (b) An affidavit to the effect that there is no notice given by the corporate debtor relating to a dispute of the unpaid operational debt; (c) a copy of the certificate from the financial institutions maintaining accounts of the operational creditor confirming that there is no payment of an unpaid operational debt 1[by the corporate debtor, if available;] 2[(d) a copy of any record w....
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.... contained under Section 8 & 9 of the IB, Code, shows that on the occurrence of a default, the operational-creditor is required to deliver a demand notice of unpaid operational debt or copy of the invoice demanding payment of the amount involved in the default to the CD in such form and manner as may be prescribed and the CD after the receipt of the demand notice or copy of the invoice mentioned in Section 8(1) of IB, Code, within ten days of the receipts of the notice bring to the notice of the operational-creditor the existence of disputes or show the documents that the payment of unpaid operational-debt has been made. Section 9 makes it clear that after the expiry of period of ten days, from the date of delivery of the notice or invoice demanding payment, if the operational-creditor does not receive payment from the CD or notice of the dispute under Section 8(2) of the IB, Code, only in that case the operational-creditor may file an applications for initiate of the CIRP. If we shall read these two provisions together then we find, before initiating a proceeding under Section 9, the operational-creditor is required to fulfil the conditions mentioned under Section 8(1), if he has ....
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....receive the notice of dispute under Section 8(2) only then he is required to file the application. 51. In the light of that submissions, we have gone through the decision upon which the learned counsel appearing on behalf of the operational-creditor placed reliance and we find that Hon'ble Supreme Court in Para 14 of the Judgment held it is equally well settled that in interpreting a statue, effort should be made to give effect to each and every word used by the legislature. The courts always presume that the legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statue should have effect. A construction which attributes redundancy to the legislature will not be accepted except for compelling reasons such as obvious drafting errors. 52. In the light of that decision, when we shall consider the case in hand then we are of the considered view that since it is specifically mentioned in Section 8(2) that within ten days from the date of the receipt of the demand notice, the corporate-debtor is required to bring to the notice of the operational-creditor, the existence of dispute or the documents regarding the payment of de....
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....his fact that application filed by him. is complete. There is no payment of unpaid operational-debt and no notice of dispute has been received by the operational-creditor or there is no record of the dispute in the information utility. 56. Therefore, we think it proper to admit the application; accordingly we hereby admit the application. 57. A moratorium in terms of Section 14 of the Code is imposed forthwith in following terms: "(a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property is occu....