TaxTMI 
TaxTMI 
2022 (9) TMI 1008
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....Petition filed under section 9 of the Insolvency and Bankruptcy Code, 2016 ('the Code') read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 by Mr. AniruddhBinnany, Senior Manager (Finance & Treasury), KCO Aluminium LLP ('Operational Creditor'), duly authorisedvideresolution dated 04 November, 2019 Annexure - C, at page 17 of the Petition for initiation of Corporate Insolvency Resolution Process ('CIRP') against Elhard Marketing Limited ('Corporate Debtor'). 3. The present Petition was filed on 18 February, 2020 before this Adjudicating Authority. The total amount claimed in default is Rs.37,06,940/- (Rupees Thirty Seven Lakh Six Thousand Nine Hundred Forty only)[Principal - Rs.30,26,074/-....
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....as issued by the Corporate Debtor to the Operational Creditor. 6. Submissions by the Ld. Advocate appearing on behalf of the Corporate Debtor. 6.1 This instant application suffers from gross suppression of material facts. The Operational Creditor is not entitled to receive any alleged amount from the Corporate Debtor. 6.2 The Corporate Debtor was having business transaction with one Crystal Cable Industries Limited ('CCIL') and during the course of such business transaction, the Corporate Debtor had ordered cables by placing purchase order dated 14 May, 2018 for a total sum of Rs.2,98,63,000/- (Rupees Two Crore Ninety Eight Lakh Sixty Three Thousand only) with CCIL. 6.3 Thereafter, CCIL appointed the Operational Creditor as its ....
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.... that a person not a party to a contract subject to certain well recognized exceptions cannot enforce the terms of the contract. It is undisputed that the case of the parties does not fall within the ambit of these exceptions. Accordingly, the doctrine of privity of contract applies to the present case and consequently, the Operational Creditor does not have any locus standi to maintain the present petition in as much as there is no contractual/ jural relation between the parties (refer Tirumulu Subbu ChettiArunachalam Chettiar (AIR) 1930 Mad 382 followed by Supreme Court in M.C. Chacko v.State Bank of Travancore, Trivandrum (1969) 2 SCC 343). 6.8 Further, while examining an application under Section 9 of the Code this Adjudicating Autho....
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....ish his alleged claim against Corporate Debtor, whereas, the matter of fact is that the goods supplied by the Operational Creditor, being a dealer of CCIL, are not even in the possession of the Corporate Debtor in as much as the same were lifted by CCIL on 19th July 2018 (refer letter of CCIL dated 19July 2019 at pg. 71 of reply). 6.11 There is also a clear admission of pre-existence of dispute between the contracting parties, i.e., the Corporate Debtor and CCIL, pursuant to receipt of the aluminum cables in pursuance to the Purchase Order issued by the Corporate Debtor to CCIL dated 14th May 2018 (refer Purchase Order @ pg. 41 of reply), the Corporate Debtor duly notified CCIL, about the poor, substandard and inferior quality of goods b....
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....019 (pg. 68 of reply) where the Corporate Debtor duly informed CCILthat it shall not bear any Damage/ Loading/ Unloading/ Detention or any claims whatsoever and the same shall be borne by CCIL. Vide the said communication it was also informed that Corporate Debtor shall not settle herein, who supplied goods on behalf of CCIL, and called upon CCIL, to take back thematerials and pay the Operational Creditor directly; (h) Letter dated 17 April 2019 (pg. 69 of reply) issued by CCIL, wherein CCIL admitted that it shall organize to take back materials are their cost; (i) Letter dated 10 July 2019 (pg. 70 of reply) where the Corporate Debtor confirmed lifting of goods by CCIL. Vide the said communication, it was expressly stated ....
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....t there is existence of such a dispute, the operational creditor gets out of the clutches of the Code." 10. Further, in Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software (P) Limited 2017 (1) SCC onLine SC 353 it was opined by the Hon'ble Apex Court that; "33. The scheme under Sections 8 and 9 of the Code, appears to be that an operational creditor, as defined, may, on the occurrence of a default (i.e., on nonpayment of a debt, any part whereof has become due and payable and has not been repaid), deliver a demand notice of such unpaid operational debt or deliver the copy of an invoice demanding payment of such amount to the corporate debtor in the form set out in Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicatin....