AI Drafter 
TaxTMI 
TaxTMI 
2022 (2) TMI 799
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....016 read with Rule 6 of the Insolvency & Bankruptcy (Application to the Adjudicating Authority) Rules, 2016 wherein at paragraphs 14 to 19 had observed the following: "14. Upon perusal of the typed set of documents filed along with the Application, it is seen that the Operational Creditor has only listed out the details of 1110 Nos of invoices along with the Application, however has failed to enclose the copy of those invoices per se and in the absence of those invoices which sets out the date, the seal of the Operational Creditor and other details, Application which are filed by the Operational Creditor are required to be treated as incomplete. It is also required to be noted that the Applicant even though in his Application has averred in Part - IV of the Application that as per the Books of Accounts that a sum of Rs. 14,41,728/- is balance outstanding, however has miserably failed to place on record the copy of the said Ledger Account in the typed set filed alongwith the Application. All these documents are least required for the Adjudicating Authority to properly adjudicate the Application on hand and the present application filed by the Operational Creditor is bereft ....
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.... b) Right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgement, fixed, matured, unmatured, disputed, undisputed, secured or unsecured; Section 3(11) "debt" means a liability to obligation in respect of a Claim which is due from any person and includes a financial debt and operational debt; Section 3(12) 'default' means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not (Paid) by the debtor or the corporate debtor, as the case may be; Section 5(20) 'operational creditor' means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred; Section 5(21) 'operational debt' means a claim in respect of the provision of goods or services including employment or a debt in respect of the payment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority; 18. It is required to be noted that for a 'debt' to qual....
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....in the normal course of 'Business' the Appellant and Respondent used to set off their respective receivable against their respective supplies and pay the balance to each other. Further in year 2015 and 2016, due to Respondent's financial crisis, it requested the Appellant' an extended and flexible terms towards payment for their purchases from the 'Appellant', As such the Appellant used to pay on time for their purchases from 'Corporate Debtor' but allowed extended time to the 'Corporate Debtor' for the purchased made by the 'Corporate Debtor' from the 'Operational Creditor'. 6. The Learned Counsel for the Appellant points out that as the quality of materials supplied by the Respondent/Corporate Debtor' was of inferior quality, as also there was a huge delay in delivery had caused huge business and goodwill loss to the Appellant's customers and hence the 'Appellant' discontinues purchases from the Respondent from 2017. 7. It is the version of the 'Appellant' that there was an unpaid amount of Rs. 14,41,728/-, standing as outstanding from the Respondent towards the paid supplies made by the Appellant for the period between 01.05.2017 to 10.12.2017. 8. The Learned Counsel fo....
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....' and to allow the 'Appeal', in the interest of justice. EVALUATION: 16. Before the 'Adjudicating Authority', the Appellant'/Operational Creditor in its application dated 20.12.2019 to initiate CIRP [under Rule 6 of the Insolvency & Bankruptcy (Application to 'Adjusting Authority, Rules 2016)] under part IV 'Particulars of 'Operational Debt' had mentioned that the total amount of debt was Rs. 14,41,728/- and the said amount was an unpaid amount, standing as 'outstanding' from 'Corporate Debtor' towards Operational Creditor's supplies to the Corporate Debtor' for the period from 01.05.2017 to 10.12.2017. 17. The Appellant/Operation Creditor had proceed to mention in its Application that the 'Debt' fell due on 11.12.2017 and that the 'Demand Notice' in form -3 dated 23.05,2019 sent to the registered Office of the 'Corporate Debtor' and Director was returned unserved and the 'Demand Notice' to the Managing Director Mr. Janartnan Mohanakrishnan was served on 25.03.2019. In fact, the 'Corporate Debtor' in its reply dated 08.06.2019 (after the mandatory period of 10 days received on 12.06.2019) had not disputed or refuted the subject 'Debt'. The said payment of Rs. 14,42,728/- w....
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..... 14,41,728/- in respect of the 'Debt' and the break-up figure is value of supply Rs. 2,69,95,970/- and the amount received Rs. 2,55,54,242/- and the balance to be paid is Rs. 14,41,728/-. The Date of Default is 11.12.2017. 22. As a matter of fact the Appellant in Form 3 (Form of Demand Notice) at Sr. No.6 and 7 had mentioned the following 6. PROVISION OF LAW CONTRACT OR OTHER DOCUMENT UNDER WHICH DEBT HAS BECOME DUE 1.Section 3(1) of IBC, 2016(Debt) 2.Sec.4(21) of IBC, 2016 (Operational Debt in respect of provision of goods). 3.Various Invoices (appx. 1110 Nos) from 01st May, 2017 to 10th December, 2017. 4.Account Statement in the books of M/s Mando Automotive India Pvt Ltd. 7 LIST OF DOCUMENTS ATTACHED TO THE APPLICATION IN ORDER TO PROVE THE EXISTENCE OF OPERATIONAL DEBT AND THE AMOUNT IN DEFAULT. 1.Account Statement in the books of M/s Mando Automotive India Pvt Ltd from 01.05.2017 to 31.12.2017 2.Legal Notice dated 3.10.2018 3.Email dated 21.10.2018 for proof of deliver of Legal Notice dated 3.10.2018 vide email. 23. For the Notice dated 23.05.2019 of the Appellant, the Respondent/Corporate Debtor had issued a Reply (through its Managing Director on 08.....
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....ity'. Even the copy of the ledger account was not placed on record before the 'Adjudicating Authority'. 29. One cannot remain oblivion to the prime fact that in the case on hand, the Appellant/Operational Creditor and Respondent/Corporate Debtor were supplying materials mutually and under such circumstances the Appellant/Applicant singly to be considered as an 'Operational Creditor' qua the 'Corporate Debtor'. 30. In fact, it cannot be brushed aside that the Appellant had received the services/goods from the Respondent/Corporate Debtor and in that context, the claim arose between the parties. 31. A 'Debt' may not be due if it is not payable in law or in fact. The application must be complete with a view to enable an 'Adjudicating Authority' to admit the same. 32. To put it succinctly, while scrutinising an application under Section 9 of the Code, an Adjudicating Authority is to determine (a) whether there is an 'operational debt' as per Section 4 of the Code (b) whether the material/documentary evidence submitted with the application indicates that the aforesaid 'debt' is due and payable and the same was not paid. (c) whether there is existence to a dispute between the ....