TaxTMI 
TaxTMI 
2022 (7) TMI 242
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..../MB-IV/2020. By the said order the Adjudicating Authority acting upon petition filed under Section 9 of the Insolvency & Bankruptcy Code, 2016 (hereinafter referred to as the 'IBC') has initiated Corporate Insolvency Resolution Process (CIRP) and appointed Interim Resolution Professional namely Mr. UVG Nayak by M/s Global Advertisers, a Sole Proprietary Firm-Operational Creditor. 2. The Operational Creditor on the basis of outstanding dues had issued Notice under Section 8 of the IBC against Respondent No.1. As allegedly since no tangible dispute was raised by the Respondent No.1 an application under Section 9 of IBC was filed and thereafter impugned order was passed. 3. One of the Member of the suspended Board of Directors and a shareholder of Sai Estate Consultants Chembur Pvt Ltd, Corporate Debtor, has filed the present Appeal. Initially in the Appeal the IRP was not arrayed as Respondent. On 18.08.2021, a Coordinate Bench of this Tribunal directed for impleading IRP as Respondent, besides issuing necessary directions. The order dated 18.08.2021 is quoted hereinbelow: "Heard Learned Sr. Counsel for the Appellant 2. Learned Sr. Counsel vehemently argued and submitted that t....
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.... within a week, thereafter. Parties to file brief 'Written-Submissions' not more than three pages along with 'Copies of Judgments' they want to refer or rely on, within three weeks. 8. List the Appeal 'For Admission (After Notice)' Hearing on 07th October, 2021." 4. In the Appeal filed before this Tribunal which was numbered as Company Appeal (AT)(Insolvency) No.616/2021, the Appellant besides making prayer for setting aside of the impugned order dated 2nd August, 2021 also prayed for stay of operation of the impugned order during the pendency of the Appeal. Since while issuing notice and directing to implead IRP as 2nd Respondent no 'Stay order' was passed by the Coordinate Bench' of this Tribunal. The Appellant preferred an Appeal before the Hon'ble Supreme Court which was number as Civil Appeal No.4967/2021. The Hon'ble Supreme Court vide its order dated 31st August, 2021 disposed off the Civil Appeal primarily observing for passing suitable orders on 'Stay Application' of the Appellant. It is better to reproduce the order dated 31st August, 2021 passed in Civil Appeal No.4967/2021 as follows:- "Heard learned counsel for the appellant and perused the record. Considering t....
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....he interim arrangement, as indicated above, shall continue until final disposal of the appeal. We would also request the Appellate Tribunal to assign a reasonable priority to the appeal for expeditious consideration." 6. Thereafter the present Appeal was listed on 26.05.2022. Since there was paucity of time the Appeal could not be taken up and was directed to listed on 30th May, 2022 on which date after hearing Learned Counsel for the parties, the 'Order' was 'Reserved'. 7. The case of the Appellant is in its Memo of Appeal has been described as follows:- "7.1 The Respondent carries on the business of display of advertisements on hoardings within the area of Mumbai, Thane and rest of Maharashtra for several years. 7.2 Since the inception of the Respondent's commercial relationship with the Corporate Debtor, on account of a close friendship between the Respondent's representative Mr. Vicky Gupta and the Corporate Debtor's representative Mr. Amit Wadhwani i.e. the Appellant and the Corporate Debtor's Managing Director, it had always been the understanding that in respect of the services being provided by the Respondent, the Corporate Debtor would only pay on a "payable when a....
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....ices/ written confirmation. That was not the case. The said statements were not provided with the invoices / written confirmations and most of them do not even co-relate to the invoices. There is / are no tabulated statements in support of some of the invoices / written confirmations. There is no acceptance shown of the details shown in the tabulated statements. Some of the tabulated statements do not even bear the acknowledgement of receipt by the Corporate Debtor and may not have been provided to it prior of the filing of the Petition. 7.6 In fact, pursuant to the receipt of some of the tabulated statements at different / random points in time, the Corporate Debtor vide correspondence issued by it in February and March 2020 (i.e. much prior to the issuance of Section 8 Notice in June 2020) sought reconciliation of accounts and verification of material evidencing the actual provision of services, the specifications thereof, locations, etc. and listed out the specific information and documents that were needed for the same. The Respondent, however, avoided the same by not providing the specific information / documents sought and rushed to issue the Section 8 Notice on 12th June 2....
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....dent's organization. That, however, cannot lead to the Corporate Debtor paying for advertisements which it had not permitted; not given a go ahead or in respect of which either invoices were never raised or sufficient proof has not been furnished of actual publication/ putting up on hoardings as per agreed specifications and at agreed locations. For all these reasons the Corporate Debtor had raised issues disputing debt, quality of service so provided and even breach of fundamental obligations and sought a reconciliation/ verification exercise by specifying the details / documents required much prior to the issuance of the Section 8 notice. 7.11 The Respondent had however sought to avoid the reconciliation / verification exercise and instead sought to invoke the provisions of the Code in a mala fide attempt to coerce the Corporate Debtor to make payments to the Respondent, which are not due to it and avoid the verification exercise. 7.12 It was an undisputed in the Application that the Respondent despite being in custody of 10 postdated cheques, returned to the Corporate Debtor 8 cheques (aggregating to Rs. 40 lakhs). It was the Corporate Debtor's case that it is inconceivable ....
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....tor had (in pleadings) pointed this out as a crucial instance of falsehood which the Respondent had indulged in whilst justifying its false claim. 7.14 The fact that an account reconciliation had been demanded and discrepancies had been pointed out was apparent from the fact that in response to the Respondent's wrongful letters dated 2nd August 2019 and 8th February 2020, the Corporate Debtor vide its Reply dated 20th February 2020 clearly stated that there were no supporting documents provided for the bills raised and the supporting documents were pending even in respect of the on account of payment of Rs.1.25 Crores. It was in this letter, reiterated that the Corporate Debtor through its representatives Mr. Amit Wadhwani and the Respondent's representative Mr. Vicky Gupta always had an understanding that money would only be payable by the Corporate Debtor when it was able to do so. Integral to this understanding was the requirement of reconciliation of records and accounts. The Corporate Debtor vide its reply dated 20th February 2020 correctly asserted that the understanding that was always followed was that the liability to make payment was on a "payable when able basis". 7.....
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....the proof of services provide. It is for this reason that an ad-hoc payment was only made on an account basis and the balance was to be made post reconciliation of accounts and verification of supporting information/ documents. 7.19 It is in the aforesaid background that the Application was filed on 28th July, 2020. A copy of the Application filed before the Ld. National Company Law Tribunal, Mumbai Bench is annexed hereto and marked as Annexure "C". 7.20 The Corporate Debtor filed its Affidavit in Reply dated 6th July 2021. A perusal of the Affidavit in Reply demonstrates that the following was the broad stand taken: (i) since the understanding between the parties was that the Corporate Debtor would make payments on a "payable when able" basis which meant that liability accrued upon completion of a reconciliation of accounts and verification exercise (which was yet to be carried out), there was an existence of a dispute between the Corporate Debtor and the Respondent and the Corporate Debtor was not liable to make any payment to the Respondent until that exercise was completed; (ii) The Corporate Debtor had specifically stated that the postdated cheques aggregating to Rs....
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....In the present case initially the IRP after receipt of the Notice has submitted 'Status Report dated 6th September, 2021 wherein he described as to what steps he had taken after the order dated 2nd August, 2021 passed under Section of the IBC by the Adjudicating Authority. The Respondent No.1/Operational Creditor has also filed detailed reply dealing with averments made in the Memo of Appeal. The Respondent in its reply has stated as under:- "1. The present reply is being filed by M/s Global Advertisers through its proprietor Mr. Sanjiv Gupta (hereinafter referred to -as the "Original Petitioner" for the convenience of this Hon'ble Appellate Tribunal) for the purpose of opposing the present Appeal as well as Interlocutory Application No. 1649 of 2021 filed by the Appellant seeking a stay of the order dated the 2nd of August, 2021, passed by the Adjudicating Authority in Company Petition No. (IB) 1393 of 2020 (hereinafter referred to as the "impugned order" for the convenience of this Hon'ble Appellate Tribunal). Through the impugned order, the company by the name of Sai Estate Consultants Chembur Private Limited (hereinafter referred to as the "Corporate Debtor" for the c....
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.... the 29th of June, 2019. There was no correspondence between the parties during this time, or even after the invoices were sent, suggesting that the modus operandi agreed to between the parties was that the invoices would be on "payable when able" basis. It is only after almost a year of following up by the Original Petitioner that the Corporate Debtor asserted that the arrangement between the parties was on a "payable when able" basis. 5. At any rate, even assuming that such was the arrangement between the parties, the interpretation which is now sought to be put on the phrase "payable when able" by the Appellant is clearly facetious and erroneous. As per its literal interpretation, the phrase "payable when able" suggest that the Corporate Debtor sought to make payment only when it is financially capable of doing so. In other words, the very usage of the defence of "payable when able" shows that the Corporate Debtor is an insolvent entity. It is only now that the Appellant seeks to suggest that this phrase means that payment was to be made by the Corporate Debtor to the Original Petitioner after reconciliation of accounts. This could not possibly be the true meaning behind the....
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....hand, as is clear from a perusal of the documents on record. The Appellant seeks to contend that the invoices had no correlation with the written confirmation letters, which is demonstrated false upon a bare perusal of the invoices and the confirmation letters themselves. Even otherwise, it is important to note that each of the invoices stipulates that any objections to their contents ought to be taken within a period of 7 days of the receipt. Admittedly, the Corporate Debtor has never raised any objections to any of the invoices. It is certainly a moonshine defence to seek to cast doubt upon the invoices years after they are raised and only after receiving notices for payment. The Appellant has admitted that the Corporate Debtor had received all of the invoices which is clear from the fact that each of them also contains an endorsement to that effect along with the seal on stamp of the Corporate Debtor. Notably, the invoices have not been denied. 8. With respect to paragraph 7.5 of the memorandum of appeal, the Original Petitioner denies the contents therein as they are false and misleading. The falseness of the assertion of the Appellant is clear from the fact that each of the ....
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....lant have anywhere in their pleadings stipulated what is the position of the accounts between the parties. The Corporate Debtor never produced its own ledger account before the Adjudicating Authority, and neither has the Appellant in the memorandum of appeal. Neither the Corporate Debtor nor the Appellant have stated how much according to them is due and payable to the Original Petitioner. It is submitted that merely seeking reconciliation of accounts without putting forward any actual "dispute" cannot amount to a pre-existing dispute as understood under the provisions of the IBC. 11. The falsity in the case of the Appellant is further clear from the fact that the Original Petitioner agreed to meet with the Corporate Debtor on the 14th of March, 2020, for the purpose of reconciliation of accounts. However, instead of meeting the Original Petitioner, the Corporate Debtor sent a letter to him on the 14th of March, 2020, (i.e., the date upon which reconciliation was to take place) seeking to stall the meeting by calling for documents which were already available with it. In fact, a perusal of this letter dated the 14th of March, 2020, itself shows that the Corporate Debtor could not....
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....remained silent for more than 18 months and did not raise any allegation that the services were not actually rendered. In fact, even today it is not the case of either the Corporate Debtor or the Appellant that services were not rendered by the Original Petitioner. Rather, the Corporate Debtor seeks to avoid making payment on the frivolous ground that it wants to review all of the correspondence and documents relating to the amounts sought without raising any concrete dispute about the same. 14. With respect to paragraphs 7.9 and 7.10 of the memorandum of *appeal, the Original Petitioner denies the contents therein as they are false and misleading. The Appellant is seeking to raise this case for the first time in the present appeal. A perusal of the documents on record will go to show that there was no such practice between the parties as is now sought to be alleged in the paragraph under reply. Rather, the documents on record show that detailed confirmation letters were issued by the Original Petitioner and were countersigned by the Corporate Debtor. It is also clear that details of the services which are being provided by the Original Petitioner were contained in the form of ta....
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....dues would be transferred through wire transfer at a subsequent point of time. At any rate, even if what is stated in the paragraph under reply is considered to be true, the same does not absolve the Corporate Debtor of its default to make payment towards the admitted operational debt owed by it to the Original Petitioner. Nothing contained in the paragraph under reply would amount to a pre-existing dispute as understood by the provisions of the IBC. 17. With respect to paragraph 7.13 of the memorandum of appeal, the Original Petitioner denies the contents therein as they are false and misleading. The Appellant has not been able to produce any document corroborating his baseless assertion set out in the paragraph under reply. This assertion is nothing but an afterthought on the part of the Corporate Debtor with the intention of scuttling/avoiding the initiation of its CIRP. 18. With respect to paragraph 7.14 of the memorandum of appeal, the Original Petitioner denies the contents therein as they are false and misleading. As has been stated above, the Corporate Debtor was in receipt of invoices, confirmation letters, and tabular charts of services rendered, and had not raised any ....
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....h, 2020, has the Corporate Debtor even mentioned the pandemic or COVID19. The falsity of the contentions of the Appellant are laid bare through the paragraph under reply. 21. With respect to paragraph 7.17 of the memorandum of appeal, the Original Petitioner denies the contents therein as they false and misleading. The assertions of the Appellant in the paragraph under reply are please false in light of the documents on record and what has been stated by the Original Petitioner above. It is clear that the bogeyman of reconciliation was raised by the Corporate Debtor for the sole purpose of delaying and avoiding the payments admittedly due and payable by it. Rather than accepting the request of the Original Petitioner to meet on the 14th of March, 2020, for the purpose of discussing reconciliation of accounts, the Corporate Debtor are sought to further obfuscate the matter by calling upon the Original Petitioner to submit documents which were admittedly in its possession. It is pertinent to note that the Corporate Debtor did not raise any "dispute" with respect to the services rendered by the Original Petitioner but only sought reconciliation of accounts. The Corporate Debtor did ....
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....hority has incorrectly and illegally passed the impugned order. The Learned Senior Counsel has taken the Court to number of documents brought on record in the present Appeal, which were according to the Learned Senior Counsel for the Appellant were produced before the Adjudicating Authority, vividly shows that there was pre-existing dispute between the parties. He has referred to number of documents which were in existence much prior to issuance of Notice under Section 8 of the IBC by the Operational Creditor/Respondent No.1. According to Learned Counsel for the Appellant if there were pre-existing dispute, there was no reason for the Adjudicating Authority to entertain the Application under Section 9 of the IBC filed by the Operational Creditor/Respondent No.1. He submits that the Learned Adjudicating Authority ignoring those documents and also overlooking the pre-existing dispute has passed the impugned order. According to the Learned Counsel for the Appellant the order impugned is in the teeth of judgement of Hon'ble Supreme Court passed in Mobilox Innovations Pvt Ltd V Kirusa Software Pvt Ltd (2018) 1 SCC 353. Besides making oral submissions the Learned Counsel for the Appellan....
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....rd by the Operational Creditor before the Learned NCLT and/ or this Hon'ble Tribunal and/ or the Hon'ble Supreme Court of India. 2. The pre-existing dispute: 2.1 The Section 8 Notice in the present case was issued on 12th June 2020 (pg.149). 2.2 The conduct of the Parties and stand taken in correspondence exchanged prior to 12th June 2020 plainly demonstrates the existence of a pre-existing dispute: (Pg. 174 para-viii) 2.2.1 The Corporate Debtor specifically took the stand in its letter dated 20th February 2020 (Pg.144- 145) that the alleged liability / claim was disputed / not admitted and that the supporting documents had not been provided despite repeated requests and reminders. Hence, it had not been able to verify whether the services had actually been provided or not, and there was a need for reconciliation/ verification (paras 2 to 4). The same are reproduced hereinbelow for ease of reference: "2. At the outset, we state and submit that the amount of debt sought to be claimed by you is denied by us in toto, even the debit note raised by your goodselfs are been denied. Infact you have sought to miss-appropriate the amounts paid by us as per your own whims and fancie....
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....Bom 1566 - Paragraphs 12 to 16. 2.2.3 In its letter dated 14th March 2020 (Pg. No. 148-149 of Appeal), the Corporate Debtor specifically took the stand that the Operational Creditor had excessively billed the Corporate Debtor and specifically listed out the documents/ information that was required for the reconciliation / verification exercise (see para 4). Para 4 of this letter is set out hereinbelow for ease of reference: "4. From the aforesaid circumstances it appears that you have excessively billed us we will be only be in a position to a way forward only after the below mentioned are provided to us. i. Details ledger of global Advertisers. ii. Copies of all hoardings and supporting documents as a part of monitoring activities including dates on which hoardings were live iii. copy of creative used for every hoarding. iv. Signed hard copes of all invoices that need to be reconciled v. PO/Confirmation emails for all orders sent across from our side to Global Advertisers vi. Also allocation of 1.25 Crore which has already been paid to you." 2.2.4 It is most important to note that there was NO response whatsoever to the 14th March, 2020 letter from the Operationa....
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....lars (see para 5 (iii) of Reply @ Pg. 169-170). The Operational Creditor chose not to file a rejoinder. None of these contentions are denied. 2.3 Case Law: ii) Mobilox Innovations Private Limited v Kirusa Software Private Limited (2018) 1 SCC 353 - Paragraph 51 - (Pg. No. 222 Vol-II) "40. 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 blust....
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....d cheques if it truly believed the Corporate Debtor owed its monies. 2.5.4 Hence, on every count, the Corporate Debtor respectfully submits that no case is made out for any admission of liability on the basis of the post-dated cheques and in fact, the conduct of the Parties' is a relevant indicator vis-à-vis these cheques. 3. Reliance on Invoices / Written Confirmations is misplaced: 3.1 The written confirmation / purchase orders were necessarily issued prior to the provision of the services and hence are of no assistance to the Operational Creditor to prove whether services were actually provided or not. 3.2 As for the invoices, they are vague, devoid of basic particulars of the services actually provided such as period, specifications, locations, rates, etc. Some of the invoices were raised several months after the alleged provision of services. Hence, the issuance of the invoices by itself does not demonstrate that the services were provided. In any case, all the invoices in fact bear an endorsement that they had been received without being checked and / or bear an endorsement that they had been received for verification (see the handwritten endorsements at the bo....
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..... Hence, these tabulated statements are of no consequence / assistance. 3.6 Lastly, the purported work completion reports (Pg. Nos. 116, 126, 130) can in no manner take the Applicant's case any further. This is because: (a) these work completion certificates by themselves do not indicate the value of the services which they claim to have been provided; (b) these have also been only received by the Corporate Debtor subject to verification and do not constitute an acceptance of liability; and (c) in any event, it is post these purported certificates that parties agreed to carry out the exercise of accounts reconciliation and verification. 4. Re: Deposit of TDS does not amount of acknowledgment of liability: 4.1 The Operational Creditor has relied upon the fact that the Corporate Debtor has deposited TDS amounting to Rs.3,96,540/- in respect of the Operational Creditor. According to the Operational Creditor, this constitutes an acknowledgment of liability. In the Corporate Debtor's respectful submission, this, neither in fact nor in law can be stated to be an acknowledgement of liability in favour of the Operational Creditor. 4.2 Factually, the aforesaid chain of correspondenc....
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.... lacs each were also issued by the Appellant. However, some of the cheques were dishonoured. According to the Learned Counsel for the Respondent there was no genuine dispute rather outstanding dues were without any dispute but once Operational Creditor intimated the Appellant regarding the legal action as an afterthought insignificant dispute was raised by the Appellant. The Learned Adjudicating Authority considering the fact that there was no pre-existing genuine dispute, has rightly entertained the petition filed under Section 9 of the IBC and initiated CIRP. According to him the impugned order warrants no interference. The Learned Counsel for the Respondent has also filed Notes of Written Submissions in the present Appeal. Its written submissions is reproduced hereinbelow: "1. OC [M/s Global Advertisers] occupied in the work of putting up billboards and Hoardings. CD [M/s Sai Estate Consultants Chembur Pvt. Ltd.} is a real estate agent. OC and the CD are in business relationship regarding carrying out Display and Mounting of advertisements for the projects provided by the CD. 2.As per the written confirmation letters issued by the OC and duly signed by the CD, OC carried out....
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....eal] 12.06.2020 The OC issued Demand Notice forwarding along with the notice, photocopies of all the documents as called for by the CD in their letter dated 14.03.2020. [Letter dated 12.06.2020@ Page 149- 156 of Appeal] 23.06.2020 The CD inspite of receipt of all the documents as called by him, never disputed, nor denied the contents/authenticity of documents, contending there is a pre-existing dispute. [Letter dated 23.06.2020@ Page 157-158 of Appeal] NOTE: Till date no dispute of any nature in respect of the display of the advertisement carried out, amount claimed in the petition or about the payment of TDS admitted paid by the CD on all the invoices, or denied or disputed the claim made by the CD in the petition save and except false and frivolous contention, with regard to any specific invoice or work mentioned therein is raised. Chart of page numbers of Invoices with dates and that of Confirmation with dates is at APPENDIX-1. 3. Statement of Account from 01.04.2020 to 30.06.2020 reflecting the total display of advertisements carried out by the OC (as per invoices raised) on behalf of the CD amounting to Rs. 4,74,55,683/-. [Statement of Account- Pg. 81} [Statement refle....
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...., there is nothing substantial in this letter, which CD could have met. v. On 11.03.2020, OC issued 7th Communication to CD placing that: Each display was carried out as per the confirmation letter executed by the CD and all invoices were duly submitted after execution of work as detailed in the confirmation letters. [@Page 146-147 of Appeal]. However, as a good gesture an appointment was also fixed on 14th of March. NOTE- CD never attended any the meeting. (Ld. Counsel verbally mentioned reason for non-meeting as 'COVID' during arguments, which otherwise is dehors the pleadings.) vi. On 14.03.2020, in order to avoid meeting, CD wrote a communication to OC, without raising any substantial dispute but by making a vague statement(s). CD sought certain documents from OC, which documents were in fact already available with the CD.[@ Page 178-179]. NOTE- Till this date there is no dispute of any nature raised by the CD. vii. On 12.06.2020, CD served Demand Notice to OC. [@ Page 151-156 of Appeal]. NOTE: All documents being Statements, Invoices, Confirmation Letters, Xerox of cheques, Out-standing sheets, letters etc. were attached with the demand notice. [Ref: S. No.....
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....ng behind principle sum of Rs.1,98,47,520/- along with interest at 18% pa. For the delayed period. As there was outstanding due, in respect of last 3 invoices, cash payment is made. After 2-8-19, in response to the OC letter, CD issued 20 post-dated cheques of Rs.S,OO,OOO/- each, out of which 10 cheques were honoured and 2 dishonoured for FUNDS INSUFFICIENT, and 8 cheques were returned on the assurance that the same will replaced by pay order /RTGS and still no dispute raised. - 20.02.2020 - Without disputing the liability, the CD contended PAYABLE WHEN ABLE and failed to explain the said contention despite the honourable court repeated asked to explain the same. - Frivolous dispute is sought to be raised that the documents sought vide letter dated 14.03.2020 are not supplied, which is incorrect on record in as much as everything supposed to be supplied as per the understanding between the parties were duly furnished along with the 'demand notice' dated 12.06.2020. - The amount claimed in the Petition by the OC is duly reflected in the COs Books of Accounts as confirmed by the RP is due and payable in COs audited books of accounts. - The liability of the CD far e....
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....oduced herein below: "Pursuant to our written Confirmation letter issued by our Office duly accepted by you, for providing Billboards for the various displays approved by you, wherein we had carried out the Display and Mounting of advertisement on your behalf at various location in Mumbai, Thana, Mira-Bhayandar & Virat as set out in the Work Completion report and had submitted the necessary invoices issued to you and these invoices were duly accepted and acknowledged by you, without raising any objection as to the contents of display till date. In our previous meeting in May, 2019, at your office you had committed to Pay us Rs.1.30 cr by July, 2019 but out of this, we received only Rs.35 lacs till 1st August, 2019, thereby a shortfall of 95 lacs which was required to be paid till the 10th August, 2019. After a lot of follow-up, meetings and calls, and since no payments were forthcoming we wrote a letter dated 02.08.2019 (send by speed post) which was received by you. On receipt of our letter dated 02.08.2019, you called Mr.Vicky Gupta for a meeting to discuss and finalise the interest rate @ 18% p.a. which was levied on the total outstanding from the start till date of real....
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....or this legal suit, which please note. We hope that you will cooperate with us and clear the entire overdue outstanding against your account at the earliest. We would appreciate your prompt action and would be pleased to receive your payment as this amount is long overdue from your end. We look forward to a better and cordial business relationship with you organisation in all our future business endeavour. Yours faithfully, For Global Advertisers Sd/- Rajiv Gupta CA to Proprietor." 13. The Appellant's letter dated 20th February, 2020 which was addressed to Respondent No.1 reflects regarding pre-existing dispute. In its letter dated 20th February, 2020 while referring to letters of Respondent No.1 dated 2nd August, 3rd August, 2019, 20th August, 2019, 4th September, 2019 30th September, 2019 and 6th February, 2020, the Appellant in categorical term had denied regarding demand raised by Respondent No.1. The letter dated 20th February, 2020 at Page 144 and 145 of the Memo of Appeal is reproduced herein below: - "We the undersigned address you as under: 1. At the outset we deny each and every insinuations set out in the said letters and state and submit that the averme....
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....ther interest of Rs.27,56,595/- is due and payable. These amount per-se are contrary to the understanding and as such the demand of these amounts are premature and therefore the demand raised under the said letters are illegal and incorrect. 8. Without prejudice to our rights and contents and as we have had a friendly understanding, we forthwith invite you to meet the undersigned and resolve the difference, if any, hope better sense shall prevail. Yours Truly, For Sai Estate Consultants Chembur Private Ltd Sd/- Vicky Wadhwani Director 14. Besides other documents letter dated 11th March, 2020 addressed to the Corporate Debtor issued on behalf of the Operational Creditor makes it clear that for reconciliation of account date was fixed to 14th March, 2020. However, record shows that thereafter no reconciliation of accounts had taken place in between the parties. It goes without saying that in accounting, reconciliation is the process of ensuring that two sets of records are in agreement. Accordingly it can be inferred that in absence of reconciliation of accounts there was pre-existing dispute between the parties. At this juncture it is necessary to reproduce the letter dat....
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.... Private Limited (2018) 1 SCC 353 has already set the present position at rest. It would be profitable to quote para 40 of the said Judgement, which is as follows:- "40. 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 ....