TaxTMI 
TaxTMI 
2022 (8) TMI 65
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....tion 14 of the code. 2. The Operational Creditor is engaged in the business of trading of yarn and supplies yarn to various manufacturing units. The Corporate Debtor is a manufacturer of socks and other garments. 3. Brief Facts of the case are as follows: i. From 30.03.2019 to 11.09.2019, the Operational creditor supplied the goods to the Corporate Debtor and raised several invoices in respect of the goods supplied. ii. From 12.09.2019 to 01.12.2019, the Operational Creditor requested the corporate debtor to pay the balance amount of INR 11,39,515/- over telephone and by email. iii. It is submitted that the Corporate Debtor had defaulted in making the payment of the invoice raised by the Operational Creditor and shown unpaid as per statement of account. iv. Thereafter, the Operational Creditor send a demand notice dated 30.11.2019 as per Form-3 under Section 8 of the Insolvency and Bankruptcy Act Code, 2016 read with Rule 5 of the Insolvency and Bankruptcy Act Code, 2016 (Application to adjudicating Authority) calling upon the Corporate Debtor to clear the outstanding amount within a period of 10 days of receipt of Demand Notice. v....
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....ors of operational creditors in their meeting held on 30.11.2019. iii. Following discrepancies and contradictions are arising out from the perusal of reply of corporate debtor to the demand notice u/s. 8 and reply to the main IB petition: a. In para 4 of the reply to the demand notice, the inception point of supply of defective goods was June, 2019 whereas in para 15 of the Reply to IB petition, the supply of defective goods is April, 2019. b. In para 8 of the reply of demand notice, the Corporate Debtor is threatening to debit the account of the operational creditor in future (ie. after 14.12.2019) whereas in Annexuse-3 at page 17 of their Reply to IB petition, the Corporate Debtor already and allegedly debit the account of Corporate Debtor and alleged the debit entries were shown to be passed on 30.04.2019, 31.05.2019, 30.06.2019, 31.07.2019, 31.08.2019 and 30.09.2019. c. In para 10 of the reply of demand notice, the Corporate Debtor is alleging the acceptance of delivery of goods whereas the main bone of contention in Reply to IB petition is the quality of goods. d. In pare 5 of the reply of demand notice, the Corporate Debtor alleges....
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....preexisting disputes with respect to quality of the product supplied by the Operational Creditor to the Corporate Debtor and enclosed the email dated 04.12.2020 and 05.12.2020 which were sent by the Corporate Debtor to the Operational Creditor in respect of inferior quality of the product of the Operational Creditor. 10. The Hon'ble Supreme Court in the case of Mobilox Innovations (P.) Ltd. v. Kirusa Software (P.) Ltd. (2017) 85 taxmann.com 292/144 SCL 37 held that: "What is important is that the existence of the dispute and/or the suit or arbitration proceedings must he preexisting i.e. it must exist before the receipt of the demand notice or invoice, as the case man be. Admittedly, there is nothing on record which can prove that a dispute exists between the parties before the issuance of demand notice. Ld. Adjudicating Authority ought to have rejected the weak feeble contentions of the Corporate Debtor and admitted the application." 11. It is observed that both the emails dated 04.12.2020 and 05.02.2020 were sent by the Corporate Debtor after issuance of Demand Notice dated 02.12.2019. The Corporate Debtor has not placed on record any other document to prove th....
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....mediately (3 days as prescribed by Explanation to Regulation 6(1) of the IBBI Regulations, 2016) with regard to admission of this application under Section 9 of the Insolvency & Bankruptcy Code, 2016. 18. We also declare moratorium in terms of Section 14 of the Code. The necessary consequences of imposing the moratorium flows from the provisions of Section 14 (1) (a), (b), (c) & (d) of the Code. Thus, the following prohibitions are imposed: "(a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property....