TaxTMI 
TaxTMI 
2021 (4) TMI 728
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....corporate debtor as a non-exclusive distributor of cattle feeds in the designated area of Palwal, Haryana on mutually agreed terms and conditions. ii. Subsequently, the corporate debtor placed various purchase orders for supply of cattle feeds of different varieties commencing from 15.12.2016 to 18.02.2017. The cattle feeds, as per purchase orders, were dispatched by the Operational Creditor under sale invoice(s) and delivery(ies) of cattle feeds have been acknowledged by the Corporate Debtor. iii. The cattle feeds under various sale invoices having total sale value of Rs. 66,07,756/- were dispatched during the period from 15.12.2016 to 18.02.2017 and acknowledged by Corporate Debtor and against the total sale value, amount of Rs. 24,50,000/-have been paid to the Operational Creditor at different intervals. iv. After crediting all receipts, an amount of Rs. 41,57,756/-is outstanding, due and payable to the Corporate debtor as on 21.03.2017. v. Against the due and payable amount, the Corporate debtor issued two cheques to the Operational Creditor aggregating to the outstanding and due amount of Rs. 41,57,756/-. However, the said cheque....
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....operational creditor requesting the operational creditor to return the blank security cheque no. 318843 and 318844 of corporate debtor drawn on Corporation Bank. c. Reply dated 22.05.2017 to the cheque dishonor demand notice dated 12.05.2017 for dishonor of CHEQUE NO. 318843 OF Rs. 25,00,000/- dated 30.08.17 to the cheque dishonor demand notice dated 22.08.17 for dishonor of cheque no. 318844 of Rs. 16,57,756/-, the corporate debtor had disputed the liability as the entire amount of Rs. 24.50 lacs had been paid to the operational creditor, and the blank security cheque no. 318843 was illegally used by the operational creditor, and further requested the operational creditor to return the blank security cheques no. 318843 and 318844. ii. Further, the invoices are not signed and not acknowledged, but are only computer-generated invoices. Further, the said invoices also relate to third party consignee other than the corporate debtor, to which the corporate debtor have no connection. Therefore, the computer-generated unsigned and unacknowledged invoice cannot be looked into for the adjudication of the claim of the operational debtor. iii. The Cheques no. 31884....
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....oods delivered of Rs. 66,07,756/-, the Corporate Debtor has paid only Rs. 24,50,000/- at different intervals. It is further contended that the date of default is 21.03.2017. 9. It is further contended that the respondent employee Mr. Madhur Mittal vide email dated 10.06.2017 acknowledged the outstanding debt. The demand notice was issued on 20.08.20019 which was duly delivered on 22.08.2019. The respondent sent a reply to the demand notice, which was delivered to the applicant on 05.09.2019. after the 10 days of the statutory period. 10. The Corporate Debtor by filing the written submission contended that no purchase order or work order was issued by the Corporate Debtor and there is no acknowledgement receipt of any of the invoices filed by the Operational Creditor. All the invoices filed by the Operational Creditor are computer generated. 11. It is further contended that the Operational Creditor is guilty of playing fraud by placing reliance upon the forged and fabricated document i.e. email from [email protected], which does not belongs to the Corporate Debtor. 12. It is further contended that this fact has been admitted by Sumit Mittal, the brother of Madhur Mi....
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....erwise complete, the adjudicating authority must reject the application under S.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". 19. Now, in the light of the submissions made on behalf of the parties, we consider the case in hand. On the basis of the averment made in the application, reply as well as written submissions filed on behalf of the respective parties, we notice that the demand notice was sent on 20.08.2019 and the reply of the demand notice is also on record. The only contention of the Operational Creditor is that it was received after 10 days of the delivery of the demand notice and hence, cannot be taken into consideration and it is presumed that no dispute was raised. 20. In the light of these facts, we further notice that it is an admitted fact that the reply to the demand notice was received on 05.09.2019, whereas Ld. Counsel for the Corporate Debtor contended that it was sent on 02.09.2019 after receiving the demand notice on 22.08.2019. 21. At this juncture, when we refer to the tracking report filed by the applicant (page 82 of the application), we notice that the d....
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.... proceeding must be preexisting i.e. it must exist before the receipt of the demand notice or invoice, as the case may be." 20. The Hon'ble Supreme Court clearly held that the dispute must exist before the receipt of the Demand Notice or Invoices as the case may be. Further, in the matter of "Innoventive Industries Ltd. Vs. ICICI Bank and Anr." (2018)1 SCC 407, in paragraph 29 held which reads as under: "29. The scheme of Section 7 stands in contrast with the scheme under Section 8 where an operational creditor is, on the occurrence of a default, to first deliver a demand notice of the unpaid debt to the operational debtor in the manner provided in Section 8(1) of the Code. Under Section 8(2), the corporate debtor can, within a period of 10 days of receipt of the demand notice or copy of the invoice mentioned in subsection (1), bring to the notice of the operational creditor the existence of a dispute or the record of the pendency of a suit or arbitration proceedings, which is pre-existing - i.e. before such notice or invoice was received by the corporate debtor. The moment there is existence of such a dispute, the operational creditor gets out of the clutches....
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....issuance of Demand Notice, the Application under Section 9 IBC is not maintainable and once there is existence of such dispute, the Operational Creditor gets out of the clutches of the Code. CONCLUSION: 22. Having gone through the records and the law laid down by the Hon'ble Supreme Court and the precedents of this Tribunal, we are of the considered view that the correspondences i.e., e-mail/ letters show that there is existence of disputes prior to issuance of Demand Notice. 23. Exchange of e-mails/correspondences, as referred above, clearly establishes that there is a pre-existing dispute between the parties regarding completion of the work and the Appellant/Corporate Debtor continuously made complaints regarding non-completion of work and deficiency in services, thereby loss caused to the Appellant/Corporate Debtor. 24. Therefore, it is quite clear that there is pre-existing of dispute regarding completion of the work and the learned Adjudicating Authority ought not to have admitted the Application under Section 9 of IBC filed by the Respondent/ Operational Creditor. Even in the Reply filed by the Appellant/Corporate Debtor before the lear....
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....k was issued again on 17.11.2016. Therefore, those two cheques were issued much before the date as claimed by the operational creditor . 26. Since, this reply dt. 22.05.2017 to the demand notice 12.05.2017 is prior to receiving of the demand notice under Section 8 of the IBC and the amount has already been disputed, therefore, in view of the decision referred Supra even if the reply of the demand notice is not sent within ten days of the delivery of demand notice under section 8(2) of IBC 2016. If the documents available on the record establish the pre-existing dispute, then that shall be taken into consideration and the reply cannot be rejected merely on technical grounds. 27. For the reason discussed above, we are of the considered view that the Corporate Debtor, by referring to the correspondence made between the parties, have succeeded to establish that there is a pre-existing dispute between the parties prior to the issuance of Demand Notice. 28. At this juncture, we also notice that the Operational Creditor at page 69 of the petition has enclosed the demand notice and on perusal of that, we find that the said demand notice was sent in Form-3. Therefore, at this junct....
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..... On perusal of the language of Section 8, it is clear that an Operational Creditor on the occurrence of default has been provided with the option of delivering a demand notice of the unpaid operational debt or raising an invoice demanding payment of the amount involved. The two options available for initiation of Corporate Insolvency Process are provided to deal with all the eventualities that may occur. For example, if an operational debt is in the nature of salary dues, then in that situation, the question of submitting an invoice does not arise. To deal with such a situation, Section 8 contains the provision for issuance of demand notice of the unpaid operational debt. Form 3 of the Adjudicating Authority Rules has only laid down the condition that the applicant has to give the details of the amount of debt, details of the transaction on account of which such debt fell due and the date from which such debt fell due, and as per Column 7 of the said Form 3, applicant has to attach the documents to prove the existence of operational debt and the amount in default. Likewise, where the operational debt involves the generation of the invoice, then in that case, invoice raising the de....