AI Drafter 
TaxTMI 
TaxTMI 
2020 (10) TMI 914
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....d Director of the Corporate Debtor i.e., Triumph Realty Pvt. Ltd filed the present Appeal challenging the admission and initiation of Corporate Insolvency Resolution Process (in short 'CIRP') against the Corporate Debtor for the reason that there is a pre-existing dispute between the Corporate Debtor and the Operational Creditor. 3. The learned Adjudicating Authority admitted the Application on the ground that the Corporate Debtor has not raised any dispute by giving a suitable reply in pursuance of the Demand Notice dated 11.04.2019 issued under Section 8(1) of IBC by the Operational Creditor to the Corporate Debtor. The findings of the learned Adjudicating Authority at paragraphs 13 & 14 are reproduced herein: ... 13. 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) of the Code 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 debt, therefore, we have no option, but to hold tha....
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....il of the Respondent dated 05.12.2017 (Page 244, Vol.-II), the Respondent/Operational Creditor admitted delay in execution of work. Further it is submitted that on 02.04.2018 (Page 247 Vol. II), the Corporate Debtor once again called upon Respondent/Operational Creditor by way of e-mail regarding incomplete work at site (Hotel). Learned Senior Counsel further submitted that the Corporate Debtor assigned pending work to a third party i.e., Yadav Electrical Work for completion of the Hotel project since the Operational Creditor could not complete the work. It is submitted that on 05.11.2018 (Page 255 Vol.-II), the Corporate Debtor again pointed out Operational Creditor about the discrepancies of the work executed and requested Respondent/Operational Creditor to depute technical persons at site where all the discrepancies can be shown. The Appellant/Corporate Debtor on 11.01.2019 appointed IM Cost Management Private Limited (in short "IMCMPL"), a team of consulting Engineers to carry out the audit of Civil structures, electrical, plumbing, finishing work and other miscellaneous packages. On 4th and 5th February, 2019, one Mr. Shiraj, Project Engineer of Respondent/ Operational Credito....
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....Innoventive Industries Ltd. Vs. ICICI Bank and Ors." - (2018)1 SCC 407 passed by Hon'ble Supreme Court & ii) "Vinod Mittal Vs. Rays Power Experts & Anr." in Company Appeal(AT)(Insolvency) No. 851/2019 dated 18.11.2019 passed by this Tribunal. Company Appeal (AT)(Insolvency) No. 548 of 2020 Page 7 of 22 iii) Mr. Gajendra Parihar Vs. M/s Devi Industrial Engineers & Anr. in Company Appeal(AT)(Insolvency) No. 1370 of 2019 dated 18.03.2020 of this Tribunal. He prayed this Bench to allow the Appeal by setting aside the impugned order of the learned Adjudicating Authority. 5. Mr. K.K. Tiwary, learned Counsel appearing for the Respondent filed his Reply and submitted that there is no infirmity in the impugned Order passed by the learned Adjudicating Authority and there is no pre-existence of dispute in the eye of law. Learned Counsel submitted that by not filing Reply to the Demand Notice dated 11.04.2019 issued under Section 8(1) of IBC, it is admitted by the Appellant/Corporate Debtor that they have not raised any dispute. Learned Counsel further submits that in order to justify its malafide, illegal stand has been taken by the Appellant/Corporate Debtor ....
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....at there was no delay in completion of the work and the Appellant/Corporate Debtor issued 'Completion Certificate' without any protest of any nature. Therefore, he submitted that even this issue is untenable. He submitted that the learned Adjudicating Authority rightly admitted the Application filed by them on the ground that the Appellant/Corporate Debtor has not raised any dispute which is not prior to the Demand Notice by way of Reply to their Demand Notice dated 11.04.2019, even though the Demand Notice was served on them on 16.04.2019. 6. The learned Counsel for the Respondent submitted that the Appellant/Corporate Debtor has not raised any valid ground in this Appeal and he prayed the Bench to dismiss the Appeal. FINDINGS: 7. Heard learned Counsel for the respective parties. Perused pleadings and citations relied upon by them. After analysing the pleadings, the only issue fell for consideration is whether there is existence of dispute prior to issuance of Demand Notice dated 11.04.2019 or not? 8. Admittedly, the Respondent/Operational Creditor issued Demand Notice on 11.04.2019 to the Appellant/Corporate Debtor demanding Rs. 46,64,878/- and the Appellant/Corporate....
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....ubmission of bill does not mean the completion and correctness of the works. Your team is more than welcome to see for themselves the incomplete/ rectification works that are being carried out these dates. We are open to show and discuss all the points across the table with your technical person at site." 10. The Appellant/Corporate Debtor sent another e-mail dated 05.11.2018 (Annexure- A13 at page 257) to the Respondent/ Operational Creditor stated as under: "Dear Sir, We reiterate that we would like to discuss all the items and issues with your technical person at site and show him the discrepancies in the billed and actual executed work in order to settle the account. It is worth stating that in the contract, any intermediate made against the R.A. bill is only adhoc payment and not necessarily certifies and accepts the work as final completion." 11. Prior to the above e-mail, we have also noticed various exchange of e-mails between the parties. The Respondent/Operational Creditor, vide their e-mail dated 05.12.2017 addressed to the Appellant/Corporate Debtor whereby it has been stated that the Project is also delayed much beyond the original sche....
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....ied out joint inspection with IMCMPL. After joint inspection, the representative of the Respondent/Operational Creditor has not come forward for further inspection. This is borne out from the records of the Appellant's e-mail dated 29.04.2019 (Annexure-A18 at page 283) addressed to the Respondent/Operational Creditor wherein it has been specifically stated that the representative of the Respondent/Operational Creditor visited on 4th and 5th February, 2019 for measurement and verification. However, the Respondent's representative was not able to explain any measurement neither could explain any query. Further, it has been stated that the Billing Engineer from the Respondent/Operational Creditor will be present on 06.02.2019. However, the Billing Engineer did not turn up at site even on 3rd day. It has been stated in the letter that in view of the delay in executing the work, resulting in delay in commencement of the operations of the Hotel and the Company had to suffer huge financial loss. Learned Adjudicating Authority had taken note of the e-mail dated 29.04.2019 in the Impugned Order at paragraph-9 and came to a conclusion that the said e-mail dated 29.04.2019 was not the Reply i....
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....period of 10 days as contemplated under Section 8(2) of IBC, should have analysed the documents placed before it, before taking such objection. 19. As per Article 141 of the Constitution of India, we are bound by the decision of the Hon'ble Supreme Court in the matter of "Mobilox Innovations Private Limited vs. Kirusa Software Private Limited" reported in (2018) 1 SCC 353 at paragraph 33 held as under: "33. The scheme under Sections 8 and 9 of the Code, appears to be that an operational creditor, as defined, may, on the occurrence of a default (i.e. on non-payment of a debt, any part whereof has become due and payable and has not been repaid), deliver a demand notice of such unpaid operational debt or deliver the copy of an invoice demanding payment of such amount to the corporate debtor in the form set out in Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Form 3 or 4, as the case may be [Section 8(1)]. Within a period of 10 days of the receipt of such demand notice or copy of invoice, the corporate debtor must bring to the notice of the operational creditor the existence of a dispute and/or the record of the penden....
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....had been even a review meeting between Operational Creditor and Corporate Debtor and excerpts of which minutes have been placed on record by the Corporate Debtor at Page - 187 which showed that full installation was yet to be completed (see Page - 188). There was also discussion regarding Sag Structure Correction Action Plan. In fact, there is Annexure - 24 showing the Experts enquiry on 5th May, 2015 as to when the plant would be declared fully commissioned so that they could start electrical review of the project. Looking to such material on record, it is quite clear that there was pre-existing dispute regarding installation as well as operation of the project. When this is so, the Section 9 Application could not have been admitted. In fact, when e-mail dated 20th October, 2016 (Page - 431) was already before the Adjudicating Authority and it had also noticed the same, the Adjudicating Authority should have found preexisting dispute and the Section 9 Application should have been rejected. Only by observing that the Respondent - Corporate Debtor have not come forward to dispute the Application would not be sufficient to initiate CIRP, if the record already showed existence of disp....