TaxTMI 
TaxTMI 
2020 (10) TMI 490
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....000/-, vide LOI, dated 20th May, 2016, and thereafter revised order value at stage II of Rs. 3,54,21,862/- vide subsequent agreement, dated 07th June, 2016 and Revised Change Order-1 dated 14.09.2016 for electrical works at site M/S. Triumph Resort, 336/1-A, Village-Calwaddo, Benaullim, Goa-403716. Pursuant to said order, the operational Creditor from 24.06.2016 to 29.12.2018 had executed the works for Hotel Triumph Resort, Goa and on the such execution, vide their Fourteen Invoices-TIGO/SI/00001/1617 dated 11.07.2016 for Rs. 509,893/-, TIGO/SI/00002/1617 dated 20.08.2016 for Rs. 6,71,410/-, TIGO/SI/00003/1617 dated 08.09.2016 for Rs. 7,87,284/-, TIGO/SI/00004/1617 dated 06.10.2016 for Rs. 13,35,112/-, TIGO/SI/00005/1617 dated 25.11.2016 for Rs. 45,36,282/-, TIGO/SI/00006/1617 dated 11.01.2017 for Rs. 7,72,779/-, TIGO/SI/00007/1617 dated 14.02.2017 for Rs. 25,90,510/-, TIGO/SI/00008/1617 dated 24.03.2017 for Rs. 31,96,138/-, TIGO/SI/00009/1617 dated 01.05.2017 for Rs. 32,32,495/-, IGO/SI/000010/1617 dated 20.06.2017 for Rs. 52,50,4355.77/-, TIGOSI003/1718 dated 01.09.2017 for Rs. 29,92,633/-, TIGOSI003/1718 dated 20.09.2017 for Rs. 20,96,294.03/-, TIGOSI004/1718 dated 29.03.2018 fo....
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....e Debtor, reply was filed and it was submitted by Corporate Debtor that:- i. That there is "existence of dispute" about the quality and quantity of work executed by petitioner under award of contract on 20.05.2016, 07.06.2019 and 14.09.2016 so much so that Corporate Debtor was forced to appoint a third party to undertake the work. The existence of dispute is very much evident from the emails placed on record by the petitioner dated 05.11.2018, 01.11.2018 and 04.10.2019 written by the representative of Corporate Debtor. ii. That existence of dispute due to non completion of work awarded is evident from the report of the experts appointed by the Corporate Debtor, IM Cost Management Pvt. Ltd.., dated 05.03.2019 copy of which was shared and discussed with petitioner by email dated 29.04.2019 but petitioner preferred to abandon the process and rushed to file instant petition to exert pressure on the Corporate Debtor. iii. The petitioner intentionally has not placed on record the entire trail of emails exchanged between the petitioner and the corporate debtor substantiating existence of dispute and the entire agreement executed between the parties and the same ....
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....rusal of the same, we find, in the reply nowhere the Corporate Debtor claimed that the Corporate Debtor sent the reply to the demand notice dated 11.04.2019 but by filing written synopsis at page 9 of the written synopsis, he claimed that he sent the reply to the notice dated 11.04.2019 by email dated 29.04.2019, which he has annexed at page 261 of Volume - II of the reply, whereas the claim of the applicant is that in response to the demand notice, the Corporate Debtor has not sent the reply, therefore, we have gone through the email dated 29.04.2019, which Corporate Debtor has annexed at page 261 of Volume-II of the reply and on perusal of the same, we find that nowhere it is mentioned that this email is in response to the demand notice delivered by the applicant upon the respondent. 9. At this juncture, we would also like to refer demand notice dated 11.04.2019, which was sent by the applicant on the registered address of the Corporate Debtor on 12.04.2019 and the same was duly delivered on 16.04.2019, which would be evident from the tracking report enclosed by the applicant at page 83 of Paper book. When we shall read the tracking report of the Indian Post, which is at page ....
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....s of this section, a "demand notice" means a notice served by an operational creditor to the corporate debtor demanding 3/payment] operational debt in respect of which the default has occurred." "Section 9: Application for initiation of corporate insolvency resolution process by operational creditor. - (1) After the expiry of the period often 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 sub-section (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 deb....
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....efect in his application within seven days of the date of receipt of such notice from the Adjudicating Authority. (6) The corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of this section." 10. Mere plain reading of the provisions contained under Section 8 & 9 of the 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 Corporate Debtor in such form and manner as may be prescribed and the Corporate Debtor after the receipt of the demand notice or copy of the invoice mentioned in Section 8(1) of the 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 Corporate Debtor or notice of t....
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.... the dispute and/or the suit or arbitration proceeding must be preexisting - i.e. it must exist before the receipt of the demand notice or invoice, as the case may be...." "34. Therefore, the adjudicating authority, when examining an application under Section 9 of the Act will have to determine: (i) Whether there is an "operational debt" as defined exceeding Rs. 1 lakh? (See Section 4 of the Act) (ii) Whether the documentary evidence furnished, with the application shows that the aforesaid debt is due and payable and has not yet been paid? and (iii) Whether there is existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt in relation to such dispute? If any one of the aforesaid conditions is lacking, the application would have to be rejected. Apart from the above, the adjudicating authority must follow the mandate of Section 9, as outlined above, and in particular the mandate of Section 9(5) of the Act, and admit or reject the application, as the case may be, depending upon the factors mentioned in Section 9(5)....
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....isciplinary proceedings pending against the Resolution Professional. Therefore, we think it is proper to admit the application. 16. Accordingly, this petition is ADMITTED. A moratorium in terms of Section 14 of the IBC, 2016 shall come into effect forthwith staying:- (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 debt or 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 Securitisation 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. Further: (2) The supply of essential goods or services to the corporate debtor as may be specified shall n....