TaxTMI 
TaxTMI 
2022 (5) TMI 716
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....unal), New Delhi, Bench IV by which order Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as 'Code') filed by Respondent No.1 - the Operational Creditor has been admitted. Aggrieved against the said order, the Appellant has come up in this Appeal. While issuing notice in this Appeal on 23.12.2021, an interim order was passed directing that the Committee of Creditors shall not be constituted. 2. Brief facts of the case necessary to be noticed for deciding this Appeal are: The Corporate Debtor is a manufacturer of famous 'Endura' products since 1996 and has been using the renowned trademark 'Endura Mass A Weight Gainer' since 01.02.2001. The Respondent No. 1 got a trademark 'NPD Endura Mass' registered as Trademark No. 1858441 on 04.09.2009 by making false representation before the concerned registering authorities of Trademark and concealing the fact that Trademark of Corporate Debtor is already duly registered as 'Endura Mass a Weight Gainer'. One Mr. K. N. Mahesh Prasad came in contact with the Corporate Debtor and represented that M/s Piramal Enterprises Limited is interested in taking over the Trademark of the Corporate Debt....
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....n u/s 156(3) of Cr.P.C on 20.10.2018 against Respondent No.1 and other accused. The Respondent No. 1 also lodged a Police Complaint at Mansarovar, Jaipur against the Corporate Debtor in January, 2019, which complaint was appropriately replied by the Corporate Debtor. The Chief Metropolitan Magistrate, West Delhi, Tis Hazari Courts, New Delhi by order dated 15.04.2019 directed the Corporate Debtor to file the complaint before EOW, Police Station. On 31.05.2019, a complaint was lodged with EOW, Police Station by the Corporate Debtor. The Respondent No.1 issued a Demand Notice under Section 8 of the Code dated 11.09.2019 demanding payment of Rs.52,80,000/- towards GST amount. The Corporate Debtor submitted detailed reply to the notice under Section 8 vide its reply dated 26.09.2019. The Corporate Debtor in its reply clearly stated that there is no liability of the Corporate Debtor to pay GST amount. Corporate Debtor stated that the Deed of Assignment dated 19.01.2018 signed between Respondent No.1 and the Corporate Debtor was for total consideration of Rs.4.40 Crores in full and final sale consideration and no amount thereafter was due or payable by the Corporate Debtor. Details of....
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....ng raised by the Corporate Debtor in its reply to the Notice as well as Reply to Section 9 Application, the Adjudicating Authority committed error in admitting the Application under Section 9. The observation of the Adjudicating Authority that since the Cheque was issued by the Corporate Debtor for the aforesaid amount, the liability of GST is admitted by the Corporate Debtor, are incorrect and erroneous. Even much prior to issuance of Notice under Section 8, the Appellant has denied its liability and issued instructions for Stop Payment of the Cheque, hence, pre-existence of dispute was very much there prior to Section 8 notice, which has been ignored by the Adjudicating Authority. The Assignment Deed was of total consideration of Rs.4.40 Crores and in addition to that no further payment including GST was to be made by the Corporate Debtor. 4. Shri Harsh Gokhale, learned counsel appearing for the Respondent submitted that although in the Assignment Deed dated 19.01.2018 there was no mention of payment of GST but in view of the fact that Cheque was issued by the Corporate Debtor for Rs.52,80,000/- dated 15.03.2018 with endorsement on the Cheque, the Corporate Debtor has admitted....
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.... Punjabi Bagh Branch, New Delhi, on your request for payment of your liability of GST. If any, on the purchase of the Trademark "NPD Endura Mass". This cheque was issued to you only and entirely to help you based on your request and not because of our liability to pay any amount to you. As per our assignment deed and agreements we had not agreed to pay this amount to you. There was and is no obligation, whether contractual or otherwise for Medinnbelle Herbalcare Pvt. Ltd. to pay you this amount. Your request for GST payment was put up to our Board and Our Board of Directors have not approved and declined your request for GST payment. Accordingly, we are instructing our Bank to 'Stop Payment' of this Cheque. You are advised not to deposit the cheque and you are requested to return our above post dated cheque, issued to you, at the earliest. For Medinnbelle Herbalcare Pvt. Ltd. (Mr. D. K. Singhal) Director" 9. After the aforesaid letter, instruction was given by the Corporate Debtor to the Bank on 13.03.2018 to 'Stop Payment' and consequently, Cheque was not honoured by the Bank with the endorsement 'Stop Payment'. 10. The C....
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....g a criminal conspiracy against us in a preplanned manner, that in fact you have by practicing a fraud upon us and made us to make the payment of Rs. 3,96,00,000 to you and Rs. 10,00,000 to your associate Mr. K.N Mahesh Prasad. We have already initiated criminal action against you for defrauding us in the courts of law. We are also in the process of initiating the proceedings for revocation of Assignment Deed and recovery of said amount from you. That it seems that in furtherance of illegal and malafide intention, you have lately deposited a sum of Rs. 52,80,000 towards GST despite knowing the fact that we have initiated legal proceedings in this regard. Malafides on your part can be gauged from the fact that the alleged invoice is dt 6/2/2018 but the GST is allegedly deposited on 20/10/2018. It seems that you have deposited this amount to put a curtain on your illegality with the tax payment. So far as the TDS deposit is concerned no final transaction was arrived as your fraud surfaced immediately. It is clarified to you that we are claiming this GST amount without prejudice to any of our rights and without admitting in any manner whatsoever bindingness of the al....
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....tion against you for defrauding us in the courts of law. We are also in the process of initiating the proceedings for revocation of Assignment Deed and recovery of said amount from you. That it seems that in furtherance of illegal and malafide intention, you have lately deposited a sum of Rs.52,80,000/- towards GST despite knowing the fact that we have initiated legal proceedings in this regard. Malafides on your part can be gauged from the fact that the alleged invoice is dt 6/2/2018 but the GST is allegedly deposited on 20/10/2018. It seems that you have deposited this amount to put a curtain on your illegality with the tax payment. So far as the TDS deposit is concerned no final transaction was arrived as your fraud surfaced immediately. It is clarified to you that we are claiming this GST amount without prejudice to any of our rights and without admitting in any manner whatsoever bindingness of any alleged transaction. This, is for your information." It is submitted that above contents of the said letter are clear and admitted evidence of existing and pre-existing disputes and is on record. Thus, the Affidavit filed by the OC/ Applicant u/s 9(3) (b) of IBC, 2016 is fal....
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...., of any debt or liability." 15. In the above case, the Hon'ble Supreme Court was considering an Appeal against a judgment by which complaint filed under Section 138 of NI Act had been quashed. The observations made in Para 19 have been made in the above context. In the present case, the issue is not as to whether the Appellant has committed an offence within the meaning of NI Act and whether he has been able to dislodge the presumption drawn under Section 139 of NI Act. The question for consideration is as to whether there was a pre-existing dispute prior to service of Notice under Section 8 dated 11.09.2019. 16. In the present case, a post-dated Cheque was given by the Appellant bearing date 15.03.2018 and before 15.03.2018 could arrive or the Cheque was presented, Respondent No.1 was communicated by letter dated 12.03.2018 that the Appellant does not accept any liability to make payment of GST and instructions are being issued to the Bank to Stop Payment. 17. As noted above, further by letter dated 19.10.2018 Respondent No.1 demanded payment of GST amount of Rs.52,80,000/- by the Appellant which was denied by the Appellant by its reply dated 24.10.2018. In the reply it ....
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....CC 353, 'Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software Pvt. Ltd.', wherein in Para 51 following has been laid down:- "51. 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 feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defence is likely to succeed. The Court does not at this stage examine the merits of t....