TaxTMI 
TaxTMI 
TaxTMI 
2020 (10) TMI 5
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....at page 17 of the petition. As per the master data at Annexure 1 of the petition, the registered office of Bhandari Hosiery is in Ludhiana. Therefore, the jurisdiction lies with this Bench of the Tribunal. 2. It is stated in part IV of Form No.5 that various chemicals and dyes were supplied by Sidana to Bhandari Hosiery on verbal orders placed by the Directors of Bhandari Hosiery with a promise to make payment for each invoice soon after delivery of goods. It is stated that Sidana and Bhandari Hosiery were in trade with each other from 2014 onwards and that Bhandari Hosiery used to make payment on bill to bill basis and has cleared the payments of all other invoices except for the ones ranging from 19.01.2016 to 24.06.2016 and till today an amount of Rs. 2,20,116/- qua these invoices is still due. The first date of default is stated to be 19.01.2016. It is submitted that to the surprise of Sidana, an undated letter was sent by Bhandari Hosiery to Sidana in the month of June, 2018 vide which it was alleged that the chemicals which were supplied to Bhandari Hosiery two years ago were found to be defective and thereby, a debit note to the extent of Rs. 2,15,753/- were issued by Bhand....
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....e operational creditor in Form 5 within seven days. 7. The compliance affidavit was filed vide diary No.6135, dated 05.11.2019 and amended Form 5 was filed in which the operational creditor was shown as "Shri Gunit Pal Singh Sidana, Sole Proprietor, M/s. Sidana Enterprises, a proprietorship concern." The other details in the amended Form 5 are stated to be the same as given in the Form 5 originally filed. 8. The replication was filed vide diary No.5464, dated 10.10.2019. 9. We have heard and considered the arguments of the learned counsel for Sidana and Bhandari Hosiery and have also perused the record carefully. 10. The main issue involved in the present case is whether a notice of dispute has been received by Sidana and the application is required to be rejected on this ground. In "Mobilox Innovation Private Limited Vs. Kirusa Software Private Limited (2017) 140 CLA 123 (SC), it has been held in para 40 thereof as under: "It is clear, therefore, that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application under Section 9(5) (2) (d) if notice of dispute has been received by the operational cr....
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.... in June, 2018 and that the details regarding the material claimed to be defective and when it was supplied, was not mentioned. 14. In the reply filed by diary No.4723, dated 12.09.2019, Bhandari Hosiery has submitted that Sidana used to send defective chemical and excess rates of chemical for which the debit notes for deduction of excess rates charged and for defective material were duly entered by Bhandari Hosiery in its books of account, but for the reasons best known to Sidana, it never entered the difference of rates and amount debited for defective chemicals in its books of account. Reference has been made to debit note for Rs. 636/- debited in the account of Sidana by Bhandari Hosiery on 15.05.2014 and to similar debits on 29.06.2015 (Rs. 573/-), 09.07.2015 (Rs. 343/-), 16.04.2016 (Rs. 721/-), 05.05.2016 (Rs. 1442/-), 14.05.2016 (Rs. 721/-), 28.05.2016 (Rs. 721/-), 27.06.2016 (Rs. 848/-). It is submitted in the reply that Sidana has only accounted for the first debit note of Rs. 636/-. 15. We find that the debit notes contain complete details of excess rates charged and the bill number. For example, the debit of 27.06.2016 of Rs. 848/- gives the details as "Being the amoun....
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....r the losses suffered. No contract stipulating the above conditions has been brought to our notice. 20. In the undated letter received in June, 2018, it is finally stated that in case Sidana does not approach Bhandari Hosiery within seven days of receipt of the notice, the matter will be proceeded in accordance with clause 7 of the purchase order. However, clause 7 of the purchase order only states that the discrepancies, if any, should be brought to notice immediately in writing, but not exceeding three days of the approval of the purchase order. Therefore, the action proposed to be taken as per the undated letter received in June, 2018 is not clear. 21. In view of the above discussion, we conclude that the dispute sought to be raised on the basis of undated letter received in June, 2018 is a patently feeble legal argument or an assertion of fact unsupported by evidence and is spurious, hypothetical or illusory. Therefore, the pre-existence of the dispute cannot be accepted. 22. Section 9(5) (i) of the Code is as under:- (5) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), by an order- (i) admit the application ....
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....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 occupied by or in the possession of the corporate debtor. 26. It is further directed that the supply of essential goods or services to the corporate debtor as may be specified, shall not be terminated or suspended or interrupted during moratorium period. The provisions of Section 14(3) shall however, not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator and to a surety in a contract of guarantee to a corporate debtor. 27. The order of moratorium shall have effect from the date of this order till completion of the corporate insolvency resolution process or until this Bench approves the resolution plan under sub-section (1) of Section 31 or passes an order for liquidation of corporate debtor under Section 33 as the case may be. 28. Under sub-section (4) of Section 9 of the ....
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....ers of the Corporate Debtor shall report to the Interim Resolution Professional, who shall be enjoined to exercise all the powers as are vested with Interim Resolution Professional and strictly perform all the duties as are enjoined on the Interim Resolution Professional under Section 18 and other relevant provisions of the Code, including taking control and custody of the assets over which the Corporate Debtor has ownership rights recorded in the balance sheet of the Corporate Debtor etc. as provided in Section 18(1) (f) of the Code. The Interim Resolution Professional is directed to prepare a complete list of inventory of assets of the Corporate Debtor; iii) The Interim Resolution Professional shall strictly act in accordance with the Code, all the rules framed thereunder by the Board or the Central Government and in accordance with the 'Code of Conduct' governing his profession and as an Insolvency Professional with high standards of ethics and moral; iv) The Interim Resolution Professional shall cause a public announcement within three days as contemplated under Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate....