TaxTMI 
TaxTMI 
2021 (5) TMI 395
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....Applicant is a company limited by shares registered with Registrar of Companies - Delhi, incorporated on 28.11.2015 under the provision of Companies Act, 2013 bearing CIN: U45400DL2014OPC273632 having its registered office at B 5/5, VasantVihar New Delhi DL-110057.It is involved in the business of construction works. 3. The Corporate Debtor is a company limited by shares, registered with Registrar of Companies - Delhi, incorporated on 02.06.1979 under the provisions of Companies Act, 1956 bearing CIN:L45101DL1979PLC009654 having its registered office atA-177, Okhla Industrial Area, Phase- I South Delhi, New Delhi DL-110044. The corporate debtor is one of the leading civil contractors in the construction industry. 4. The applicant submits that the corporate debtor engaged the applicant for performing interior, furnishing and allied civil and electrical works at various project sites. Accordingly, materials were supplied to the corporate debtor as part of various work orders issued for six projects at different locations in the country. 5. The variouswork orders issued by the corporate debtor are detailed as follows: a) On 04.05.2016 work order was issued for constr....
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....etween the parties the corporate debtor in its trail of email dated 08.10.2018, had stated that: "The total amount payable as per ACIL is 8.40,000/- which is 5% retention amount on total work done of Rs. 1,67,99,998/- & this amount is to be release after completion of DLP period of 3 years or against submission of BG of equal amount." In response to the said email the applicant sent another email recording the following: "The DLP period decided with us was one year and the retention amount was to be released against the postdated cheque." 6. The applicant submits that on 06.06.2018, the corporate debtor approached the applicant to carry out "extra item work", at SBIM project in Kolkata which was also completed by the applicant. On 06.08.2018 communication was issued by the project architect, which provides for completion of work. The communication dated 06.08.2018 has been annexed. 7. The applicant submits that against each work order invoices were raised, sent and duly received by the corporate debtor. However, the corporate debtor failed to release the full payment. Hence 09.05.2019 the applicant sent a demand notice under Section 8 of the codecal....
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....r illegally and unlawfully in violation of the contractual terms. 9. The applicant states thatan outstanding balance of Rs. 14,10,77,658.86/- (Rupees Fourteen Crores Ten Lacs Seventy-Seven Thousand Six Hundred and Eighty-Five and Eighty-Six Paisa only) is still pending. The corporate debtor has failed and refused to clear the pending dues despite having admitted the same on several occasions. 10. The applicant filed an application under Section 9 and as per Form V, the total outstanding debt is Rs. 14,10,77,658.86/- (Rupees Fourteen Crores Ten Lacs Seventy-Seven Thousand Six Hundred and Eighty-Five and Eighty-Six Paisa only), is due and payable by the corporate debtor to the applicant. 11. The corporate debtor filed reply raising the following objections: a) That the application is not maintainable, on the grounds that it is arising out of different work orders, which cannot be claimed under one single application and of different service in nature and each contract gives rise to separate alleged debt. Further, clubbing different work orders under a single cause of action is not permissible under the law and is a settled law as per the judgment of Hon'ble NCLAT in....
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....duly paid with GST and not the other taxes so applicable. The corporate debtor states that the issue was intimated to the applicant and refundof Rs. 1,89,19,275/- was sought vide letters dated 22.08.2019 and 16.10.2019. The corporate debtor submits that a legal notice dated 20.11.2019claiming the said amount has also been served upon the applicant. A copy of the said notice is annexed. e) Thatas per clause 6 of commercials/work orders, retention money to the tune of 10% on back-to-backpayment basis was to be retained till the completion of the Defect Liability period, it was required to be considered from the date of obtaining completion certificate, which was never provided by the applicant. Further the corporate debtor states that no retention money was deducted. Moreover, the applicant has failed to abide by the terms and has also not submitted any indemnity bond along with final Bill as per the clause 7 of the Commercials which is in clear violation of the terms of the work order. f) It is stated that the work order dated 06.11.2017, for construction works at Delhi Gymkhana Club, New Delhi mentioned in the present application, was never executed between the pa....
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....ar dues, hence the present application must be allowed. Further also submits that the corporate has failed to consider their own communication, wherein the dispute raised was duly given up vide various communications and was accepted to be wrong. b) The corporate debtorwith the malafide intention issued frivolous communications dated 22.08.2019, 16.10.2019 and notice dated 20.11.2019, after service of notice. c) That a counter claim,raised by corporate debtor has not been supported with any evidentiary documents. However, the applicant discharged all VAT liabilities and thus corporate debtor is not entitled to raise any such claim. The objection with regards the authorized representative, who is not authorized to file reply hence the reply must be struck off. (on what grounds) d) That the corporate debtor has specifically admitted the existence of amount outstanding, due and payable to the applicant. e) The applicant states that the legal notice dated 23.04.2019 was issued erroneously and without authorization by the applicant's lawyer and the same was therefore withdrawn. However, immediately, thereafter a proper notice under Section 8 dated was....
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....95,213/- 29.06.2019 ICCP- Patna, Bihar 8,40,000/- (5% retention amount of the total work done of R. 1,67,99,998/-) 28.02.2019 Delhi Gymkhana Club Rs. 25,10,386/- 31.12.2017 b) That the applicant is a sub-contractor of corporate debtor in projects, and the corporate debtor is a Principal Contractor. c) That the work orders for 6 projects have been executed among the parties pursuant to which respective Letter of intents have been issued. Further also stated that the work executed by the applicant is duly certified and in certain cases virtual certificates are also issued. d) That despite certification of works and bills, payment has not made to the applicant. e) No notice of dispute was raised by the corporate debtor prior to the notice of demand issued by the operational creditor on 09.05.2019 under Section 8 of IBC. f) The corporate debtor has raised technical objection in view of observation passed in "International Road Dynamics South Asia Pvt. Ltd. Vs. DA Toll Road Pvt. Ltd." wherein it is stated that different claims arising out of different agreement or work order, having different amount and different date of ....
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....nd default." Delhi High Court in the case of Delhi State Industrial Development Corporation Vs. Mohan Construction Company, vide order dated 02.09.2015held: "Once the work is completed by the respondent, and in fact a final bill has also been released by petitioner to the respondent ...surely, the retention money which is retained by the petitioner has necessarily to be refunded to the respondent...petitioner is not entitled to retention of this amount for defective work and therefore tis claim no.1 has been rightly allowed by the Arbitrator." i) The applicant has relied upon the case of RaghuvirBuildcon Private Limited Vs. Ketan Construction Limited and Mobilox Innovations Private Limited Vs. Kirusa Softwareon whether the dispute is genuine or merelya dispute being moonshine in nature. 14. The corporate debtor filed written submissions and stated the following: a) The corporate debtorrelying upon the case of NCLAT in International Road Dynamics South Asia Pvt. Ltd. Vs. Reliance Infrastructure Limited,states that it is well settled law that the debt arising out of different work orders of different locations. Where each work order is a differe....
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....notice. iii. Dispute with respect to difference in amount in relation to wooden paragola at Delhi Gymkhana Club, the amount as charged by the applicant is disputed. Further there also exists dispute with respect to the work performed at ICCP Patna in relation to the claim of retention money for which defect liability period was 3 years. The corporate debtor has annexed the email dated 08.10.2019, wherein it has been conveyed by the corporate debtor that no amount is due and payable, which has been agreed by the applicant e) The corporate debtor states that the applicant failed to discharge the first condition as mentioned in Mobilox Judgment, i.e., to show that there exists a debt. The corporate debtor relying upon the case of Krishna Enterprise Vs. Gammon India Limited, COMP AT (INS) No. 144/2018, wherein it has been held that no interest can be claimed as a part of the debt if the contract does not provide for it. In the present case, no clause of the contracts had provided for interest. On the contrary, the clause 1 of the commercial of the contact, bars the same explicitly. Therefore, no interest could have been sought for as an operational debt as the same is....
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....leaving no scope for any further adjudication. we are further strengthened by the law laid down by the Hon'ble Supreme Court in "Innoventive Industries Ltd. Vs. ICICI Bank and Ors. - (2018) 1 SCC 407" it is observed and held as follows: - "The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning non-payment of a debt once it becomes due and payable, which includes non-payment of even part thereof or an installment amount. For the meaning of "debt", we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a "claim" and for the meaning of "claim", we have to go back to Section 3(6) which defines "claim" to mean a right to payment even if it is disputed. The Code gets triggered the moment default is of rupees one lakh or more (Section 4). The corporate insolvency resolution process may be triggered by the corporate debtor itself or a financial creditor or operational creditor. The moment the adjudicating authority is satisfied that a default has occu....