TaxTMI 
TaxTMI 
2021 (2) TMI 875
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....). 2. The Corporate Debtor is a private limited Company incorporated on 15.07.2019 under the Companies Act, 2013, with the Registrar of Companies (RoC), Ernakulam, Kerala. Its CIN is U45309KL2019PTC058816. Its registered office is at Building No. XVII/180, Marymatha Square, Arakuzha Road, Muvattupuzha, Ernakulam, Kerala-686661. Therefore, this Bench has jurisdiction to deal with this application. 3. The present application has been filed before this Tribunal on the ground that the Corporate Debtor failed to make payment of a sum of Rs. 2,26,30,208 (Rupees Two Crore Twenty-Six Lakhs Thirty Thousand Two Hundred and Eight only) as principal and Rs. 4,07,093 (Rupees Four Lakhs Seven Thousand and Ninety-Three only) as interest, from the date of default. Case of the Operational Creditor: 4. The Corporate Debtor is a construction company, registered with ROC, Kerala. The Corporate Debtor, which was originally incorporated as a partnership firm by name Marymatha Construction Private Limited, obtained the contract for the construction of the Goa Shipyard office building at Vasco da Gama, Goa. 5. The Operational Creditor is a renowned Mechanical, Electrical and Plumping (MEP) ....
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....ills for the Electrification work totalling Rs. 1,26,38,127/-. Out of this amount, after reducing the interim amounts received (Rs. 1,07,73,241/-) and also deducting the TDS (Rs. 2,14,205/-) and retention amount (Rs. 10,71,028/-), the outstanding amount is Rs. 5,79,653/. The working of computation of default at page 209 of Operational Creditors Application shows how the amounts have been adjusted. It is the last bill dated 30.09.2019 that is pending. The total principal outstanding is therefore Rs. 2,26,30,208 (Rs. 2,20,50,555 (HVAC) Rs. 5,79,653 (Electrification). Nominal interest of Rs. 4,07,093/- calculated as the rate of 8% per annum (banking rate on deposits) has also been claimed as per the Interest Act, 1978. The Operational Creditor, being a MSME is also entitled to interest on amounts under Section 16 of the MSME Act, 2006. 10. Meanwhile, the Corporate Debtor on 28.08.2019 issued a letter stating that 'Marymatha Construction Company' a partnership firm is converted into a private Limited Company and registered under the Companies Act, 2013. Thereafter on 01.10.2019 the Corporate Debtor confirmed total amount due in work orders and undertook to honour the bills/invoices ....
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....tor's defence are as follows: Firstly, the payment terms as agreed between the parties are: - (a) Electrical work: "80% of the BOQ rate for the supply of equipment's excluding circuit wiring and point wiring (for circuit and point wiring 60%) within one month of the bill submission. Corporate Debtor has to furnish a bank guarantee for the balance 10% (difference in value between 70% and 80%) of BOQ rate for the corresponding materials supplied which will be valid for 6 months". (b) In respect of HVAC work "the payment shall be done against 80% of the BOQ rate for the supply of equipment within one month of the submission of bill. However, they should furnish a bank guarantee for the balance 10% difference in value between 70% and 80%) of BOQ rate for the corresponding materials supplied which will be valid for 6 months". 15. Secondly, supply of equipment/material is complete only when the Corporate Debtor approve the detailed technical specification of the item supplied by the Operational Creditor. It is also required to submit the test certificates, guarantee card, warrantee card etc. for all the items supplied by them. The supply will be complete only ....
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....rational Creditor from Corporate Debtor with respect to HVAC work. The invoices raised by Operational Creditor is not in tune with the terms of the work order. As per the terms of the work order Corporate Debtor is bound to release only 70% of the cost of the material upon satisfactory supply of materials. The chart below will give a clear picture of the amount which Corporate Debtor ought to have paid to the Operational Creditor and the amount actually paid and the excess amount held by the Operational Creditor. 18. They further submitted that no amount is due to Operational Creditor by MIPL in connection with HVAC work. An amount of Rs. 43,67,137/- is excessively paid to Operational Creditor and the same is liable to be returned. In addition to the above sum, an amount of Rs. 47,32,177/- is liable to be recovered from VKBS for supply of defective materials/equipments. 19. The Corporate Debtor also submitted that the Operational Creditor mentioned about 7 invoices in respect of Electrical work and the total amount claimed is Rs. 1,26,38,127/-. The invoices raised by Operational Creditor upto 6th bill comes to Rs. 1,19,76,672/-. The Operational Creditor admit that they have r....
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....reditor. On 07.09.2019 Corporate Debtor sent an e- mail stating that: - QUALITY ISSUES IN '1F' AND 'DELAY IN ELECTRICAL WORKS' "This is to inform you that 1F electrical works which was started in 14 Mar 2019 hasn't been completed till date. Your team had started work in 2F on 6 May 2019 and 3F on 05 Jun 2019 but only 10% works is completed in 2F and 3F. This shows the utter failure of your execution team at site and' office in mobilizing workforce and tack of proper planning. Quality of work is the worst as you can see in the attached photographs. No proper supervision is done by your execution team as your subcontractor is working at his own will. We had already informed your execution team several times to monitor the works done at site. The same was earlier conveyed to Mr. Jihendra, Mr. Rajesh Dubey and Mr. Vivek Singh several times during their visits at site and through mails. But your execution team is showing no interest in completing the work within committed dates and with required quality, we had already informed your site team that strict action will be taken and heavy penalty will be imposed if these issues are not rectified. C bends and j....
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.... c. External services related to electrical works will be completed by 15.01.2020 * Plant room pedestals in terrace floor to be finished by Marymatha on 30.11.2019. * Marymatha needs to provide temporary doors at all floors for AHU rooms, electrical rooms, server r0oms etc after the panel errection by 30.11.2019 * Internal and External works like cabling, street lights, bollard lights, street pole, earthing works, and Lightening arrestor etc. to be studied in detail by VKBS and a micro level programme should be submitted to Marymatha after discussion with site engineers and further approval from Mr. CP Rajesh on or before 27-11-2019 * VKBS has requested to de scope labour portion of external cabling works (300sqm) - from their scope of work as supply portion was already descoped earlier which will be discussed with the directors of Marymatha and decision will be taken later. * VKBS has committed to increase their labour strength as per the attached schedule and also agreed to engage two additional site engineers for achieving the rate of progress as per the above schedule. * VKBS should submit to Marymatha all warrantie....
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...., much prior to the demand notice, regarding the quality of the work done, which is not being solved. It is also evident that the Operational Creditor also failed to fulfil the commitment made in the minutes of the meeting. 29. In this connection, para No.40 of the decision of the Hon'ble Supreme Court in Mobilox Innovations Private Limited v. Kirusa Software Private Limited, [Civil Appeal No.9405 of 2017 dated 21.09.2017] can be referred to which reads: "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 creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the "existence" of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the "dispute" is not a patently ....
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....hat this is not a case where the impugned Debt and the alleged default was free from existence of plausible dispute or merely a feeble argument; but duly supported by corroborative evidences. Therefore, it cannot be proceeded under the Insolvency Code so as to commence CIRP by declaring the Debtor insolvent or bankrupt. It is worth to put on record that the scope and jurisdiction of this Tribunal is limited and also confined to the provisions of Insolvency Code while dealing with application filed under Section 9. Therefore, the impugned debt in question does not fall within those ambits. However, the claim under any other law, if permissible, can be pursued by the applicant as prescribed under that law. Any observation, legal or factual, shall not prejudice the rights of the applicant, if to be exercised under any other law. 32. With the aforesaid observations and considering the totality of the facts and circumstances of the case and the law applicable, this application does not survive for consideration under the Insolvency and Bankruptcy Code. Hence, IBA/18/KOB/2020 is "Dismissed". No Order as to costs. Dated the 25th day of September, 2020. ============= Document 1 ....