2020 (11) TMI 124

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....dent (Corporate Debtor) approached the Appellant (Operational Creditor) for the lease of various equipment for power generation from the Appellant. ii) Accordingly the parties entered into a lease agreement dated 5th January 2015 (read with addendum dated 20th September, 2015) and a lease agreement dated 20th January, 2016, respectively. iii) The Appellant and the Respondent also entered into a Service Agreement dated 5th January, 2015 (read with addendum dated 20th September, 2015) and a Service Agreement dated 20th January, 2016 for manpower. iv) The business dealings under the Lease Agreements and the Service Agreements between the parties commenced from February, 2015, which continued till the Financial Year 2018-2019. v) During this period, two mutual open and current running accounts were maintained by the Appellant - Operational Creditor for business dealings under the Lease Agreements and the Service Agreements with respect to the various transaction with the Respondent. vi) Under the Lease Agreements and the Service Agreements, the Appellant raise its invoices fortnightly, in respect of rental charges for the leased equipment and the services respectively su....

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....' and 'Form 4' under Section 8 of the IBC read with Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 which is kept at Annexure - A-10 Page 329 (Vol.-II) of the Appeal Paper Book wherein the principal amount of debt due from the Corporate Debtor is INR. 1,13,29,658/- which is payable along with interest from the date of the last invoice raised i.e. 1st February, 2019 at the rate of 18% per annum amounting to INR. 4,35,803/- the total amount of Rs. 1,17,65,461/-. xiv) The Respondent replied to the Demand Notice vide a reply dated 28th April, 2019, which is marked as Annexure- A-11 at page 345 (Vol.-II) of the Appeal Paper Book is as under: - "1. At this outset, our client states that all the statements, allegations and claims contained in the Demand Notice dated 20th April 2019 received on 27/04/2019, ("impugned notice under reply") shall be deemed to have been fully denied by my client as if the same were set out herein and nothing contained therein shall be construed as admitted or accepted for want of specific traverse. 2. Our client fully denies the alleged payable not to speak of the acknowledgment mail dated 19th J....

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....o state how the debt of Rs. 61 lakh doubled in a span of 49 days. Your act of misusing a communication issued in a different context as an acknowledgement of debt, is malicious and abuse of process of law. Since it is a dishonest claim your notice issued under the Insolvency and bankruptcy Code, 2016 is liable to be withdrawn immediately." xv) Thereafter, the Appellant filed Application under Section 9 of the IBC, 2016 before the Ld. Adjudicating Authority. xvi) The Respondent appeared and file reply and after hearing the parties impugned order dated 23.12.2019 was passed. Hence, the Appeal. 3. Although, one-week time was granted both the parties to file their Written Submissions but only Respondent has filed Written Submissions. Submissions on behalf of the Appellant 4. The learned counsel for the Appellant during the course of argument submitted that the Ld. Adjudicating Authority while dismissing the Application filed by the Appellant under Section 9 of the IBC, 2016 failed to appreciate that there was no prior dispute till 28th November, 2018 which was raised by the Respondent. i) The Learned counsel for the Appellant further submitted that the Ld. Adjudicatin....

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.... so clause 12.3, empowers Respondent to raise debit note for deficiency and supply breakage (at page 82-83 of the Appeal Paper Book). On 30.05.2018, the Appellant acknowledged receipt of such Notes but had not given effect in their accounts (at page 11 of the Reply of Respondent) which is reads hereunder: "Dear Mr. J. Sivakumar, We have reconciled the account statement sent by you. And as on 29th May, 2018 total outstanding is as below. Request you to kindly release the payment at the earliest. Customer account Name Gross O/S C-000061 Soundararaja Mills Ltd. 32,45,418.00 C-000076   28,83,986.00   Total 61,29,404.00 Note 1   3,54,564.00 Note 2   2,58,085.00 Note 1 Credit note issued by customer but not yet booked in QEL Ledger- This is to be discussed on what reason CN issued. Note 2 Total differential TDS not yet booked in QEL ledger." vi) It is further submitted by the Respondent (Corporate Debtor) that the power supply was never regular all through the contract period and that the Respondent suffered heavily and drawn power from 'Tamilnadu Electricity....

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....to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application." xi) The learned counsel for the Respondent further submitted that on the basis of these facts and also placed reliance by the judgment of Hon'ble Supreme Court in "Mobilox Innovations Private Ltd. Vs Kirusa Software Private Ltd., 2018 (1) SCC 353", that much prior to issuance of notice under Section 8 of the IBC the Ld. Adjudicating Authority has rightly held preexisting dispute between the parties. So there is no illegality in the impugned order passed by the Ld. Adjudicating Authority. FINDING 6. We have perused the records of the case, considering the arguments advanced on behalf of the parties and gone through the written submission filed on behalf of Respondent. Taking the aforesaid facts and circumstances, we are of the considered view that the Ld. Adjudicating Authority has rightly taking notes of the facts. i) In view of the averment made at page 11 of Reply Affidavit of the Respondent which has ....