TaxTMI 
TaxTMI 
2021 (5) TMI 581
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....om 30.06.2015. 2. This Petition/Application under section 9 is filed by Mr. James Hearty, Manager Finance on behalf of the Petitioner Company being duly authorised by Board Resolution dated 14.11.2019. Copy of the Board Resolution is annexed to the Petition. 3. Brief facts of the case, as per the Petitioner, which are relevant to the issue in question, are inter alia as follows: (1) It is submitted that the Petitioner is a Company incorporated under Companies Act, 1913 and is engaged in crushing, screening, grinding, material handling and mineral processing equipment, serving the core sector industries mainly iron ore, coal, steel, zinc and copper, limestone and other mineral businesses. The Respondent is a company incorporated under Companies Act, 1956 engaged in designing, manufacturing, installing and maintaining machinery equipment and industrial plants and providing engineering consultancy services. (2) It is submitted that on and around April 2014, the Respondent approached the Petitioner for supply of Crusher-Ring Granulatore Type and Vibrating Grizzly Feeder, (hereinafter referred to as "the said Project"). Thereafter, a series of negotiations took place between the R....
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....ndent responded to Demand Notice vide Letter dated 17.12.2019 purporting to be a reply. It is submitted that the contents of the Reply dated 17.12.2019 do not constitute notice of a pre-existing dispute as contemplated under the Code, 2016. Copy of the Reply is annexed to the Petition. Relevant contents of the Reply Notice are extracted hereinbelow: "You are aware that we had obtained a contract to construct a coal handling plant for Indian Power Corporation (Haldia) Limited (hereinafter "IPCL") and now known as Hiranmaye Energy Limited. IPCL's associate company-Shristi Infrastructure Development Corporation Ltd. (hereinafter "SIDCL") was paying some of the invoices raised under the contract. For the purpose of the contract, we were required to install a crusher-Ring Granulator Type and Vibrating Grizzly Feeder (hereinafter "the Project"). Your company had then represented to us that your company is capable of supplying, installing and commissioning the Crusher-Ring Granulator Type and Vibrating Grizzly Feeder in a timely manner and at a reasonable cost. Believing your representations, we had agreed to place purchase orders on your company for the Project. You are further a....
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.... which had admittedly not been completed. Further, your company was required to provide soft copies and 7 hard copy sets of the operating and maintenance manuals, soft copies and 4 hard copy sets of the commissioning procedures, soft copies and 6 hard copy sets of the drawings for approval and soft copies and 4 hard copy sets of the test certificates within the timelines mentioned in the purchase order. None of these terms were complied with. ......For the sake of brevity and keeping in mind the limited purpose of this reply of only bringing to your company's notice the existence of a dispute as required by the Code, we have not specifically traversed/controverted any of the allegations and claims made in the demand notice. We reserve our right to do so traverse the same should you choose to initiate corporate insolvency proceedings under the Code against us. Non-traversal of the allegations and claims made in the demand notice shall not be deemed as an admission of the same." (11) The Petitioner refutes the claims made in the Reply to Demand Notice. It is submitted that the debt fell due on several dates including on 30.06.2015 being the date on which the last invoice in t....
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....peration" Email dated 02.02.2017 is extracted below: "As informed to you, we had a meeting with Chairman and Director at IPC(H)L, Kolkata. We explained the whole scenario of promises made to our vendors for payments. They have given a patient hearing on our pleas. IPC(H)L has assured us, they will go through all such cases and resolve the matter at the earliest. Kindly bear with us. We may be required to meet them jointly in this connection. We expect your kind co-operation in the matter with sincere thanks." 4. The Respondent Company has filed Statement of Objections to the Petition seeking dismissal of the petition with the below stated contentions: (1) It is submitted that the financial health of the Company and is good and its assets are sufficient to meet its liabilities. (2) It is submitted that the Application under section 9 of the Code, 2016 is incomplete. The Applicant has suppressed the existence of dispute and the fact that the dispute was notified in the Reply to the Demand Notice. (3) It is submitted that as per the Application relied on by the Applicant, the amounts were due on 30.06.2015, after a lapse of 5 years, the instant application is filed on 29.....
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....s not produced the complete set of the purchase orders along with the application. Supplies were to be made at IPCL/SIDCL site and for use by IPCL/SIDCL and payments were also to be made by IPCL/SIDCL through Respondent. Copy of Purchase Order dated 19.05.2014 containing terms and conditions is annexed to the Objections. (8) The Applicant was required to also supply a supporting structure for the vibrating grizzly feeder (VGF) under the Purchase Order and was to do so within the timeline stipulated therein. However, the Applicant failed to deliver the same despite several reminders. Copy of the email dated 13.10.2015 sent by the Respondent to Petitioner seeking immediate action for supporting tool to VGF is annexed to the Objections. (9) It is submitted that due to failure on the part of Petitioner to supply the Supporting Structures, the erection schedule was delayed and the Respondent was constrained to get the same manufactured for an additional cost. Copies of LOI dated 01.06.2016 raised by the Respondent on M/s. Saikrupa Manufacturer are annexed to the Objections. (10) It is submitted that the Petitioner's obligations were not limited to supply of parts of the projec....
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....directly to Applicant. Copy of the email dated 17.10.2015 is annexed to Objections. Under these circumstances the Respondent is not under an obligation to pay the alleged claims as all the claims, if any, lie against IPCL/SIDCL. The only recourse is a suit for money recovery. That initiation of instant proceedings against the Respondent and without IPCL being made a party is bad in law and ought to be dismissed at the threshold. (13) It is submitted that there is a dispute relating to quality of Petitioner's service and the breach of representations made by it, which constitute a 'dispute' under the Code, 2016. The dispute has been raised with the Applicant vide email dated 13.10.2015. (14) It is submitted that COP No. 295 of 2016 filed before the Hon'ble High Court of Karnataka for winding up of the Company was transferred to this Tribunal, the T.P No. 135/2017 was dismissed as withdrawn. The Respondent had filed detailed objections in the said matter. That despite being aware that there is dispute, this petition has been filed. The breaches and dues, if any, required to be proven through evidence, can only be done by way of a trial and not by summary proceedin....
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....ssued by the Petitioner. That vide reply dated 17.12.2019, the Respondent for the first time referred to a dispute purportedly communicated vide email dated 13.10.2015. It is submitted that there is no dispute indicated in email dated 13.10.2015 to the contrary, there are several emails acknowledging the amounts due. (4) Further, the Respondent's contention that Rs. 25 Lakh was paid to the Petitioner by a third party, and therefore it is that 3rd party that is liable to make payments to the Petitioner is entirely false. (5) It appears that due to some internal arrangement between the IPCL and the Respondent, IPCL has made certain payments to the Petitioner. However, the Petitioner is not bound by any such arrangement. There is no agreement, minutes of meeting or any contract of any other party including the Respondent and IPCL. (6) It is submitted that even after the receipt of Rs. 25 Lakh on 17.10.2015, the Respondent has admitted its liability to the Petitioner vide letters dated 10.05.2016, 18.10.2016 and 02.02.2017. (7) Reliance is placed on the decision of Hon'ble Supreme Court in Tamil Nadu Electricity Board v. N. Raju Reddiar, (1996) 4 SCC 551 where it is obs....
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....e trailing mail & request your immediate action for supply of Supporting stool to VGF along with fixing bolts, (which is under your scope as per the MOM dt. 27-2-15 & 28-2-15 at our HO, Bangalore) Our Site work is held up. Your immediate action on this will be highly appreciable Matter most urgent". 8. Letter of Intent for manufacturing, supply & Transportation of Fabrication items required for CHP Plant at IPCL, Haldia dated 01.06.2016 by Respondent to Saikrupa Industries to establish that due to the unsatisfactory work of Petitioner, the Respondent was constrained to get the work done from others. However, it is also seen that the Respondent has categorically admitted to dues of Rs. 1,47,45,750/- in letter dated 10.05.2016 citing financial distress as a reason and has sought time for releasing payment. The Respondent has again sought more time to release payment vide letter dated 18.10.2016. The Respondent informed the Petitioner that a joint meeting may be required with IPC(H)L, Kolkata to resolve the matter of releasing payments vide email dated 02.02.2017. 9. On the other hand, the Petitioner has not provided any material to establish insolvency of the Respondent company....