TaxTMI 
TaxTMI 
2022 (10) TMI 585
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.... business of construction works and the Corporate Debtor is a company engaged in the business of engineering, construction, manufacturing and financial services conglomerate, with global operations. 3. Submissions of Operational Creditor: i. The Operational Creditor states that, the Corporate Debtor issued a Letter of Intent, dated 05.05.2017, to depute persons, tools and tackle and commenced work of construction of "Elevated Service Reservoir" (in brevity "ESR") at work site at Pune, ESR and GSR Project at Pune. ii. Further, a Work Order- no. EF516WOD7000042, dated 07.07.2017 for a period from 29.05.2017 to 31.08.2018, for a total value of Rs. 2,00,25,000 by the Corporate Debtor to the Operational Creditor for the following: a. One Number of Elevated Service Reservoir of 4.5 ML (4500000 Litres) Capacity with 18 Mtr Staging at Hadapsar Bus Depot @ Rs. 1.95/Ltr, amounting to Rs. 87,75,000/-; b. One Number of Elevated Service Reservoir of 2.5 ML (2500000 Litres) Capacity with 19Mtr Staging at Ghorpadi Siciliaa ESR-1 @ Rs.2.25/Ltr, amounting to Rs. 56,25,000/-; and c. One Number of Elevated Service Reservoir of 2.5 ML (2500000 Litres) Capacity with 19 Mtr Staging at Gh....
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....l Creditor raised an amount of Rs. 8,85,795/- towards the balances due against the R/A invoices on the account of difference in rates of the invoices issued up to 30.06.2018. ix. Therefore, the Operational creditor served a Legal Notice through its Counsel Anil Kumar Dugar on Corporate Debtor vide the Demand Notice dated 29.03.2019, for a cumulative amount of Rs. 19,54,556.60/-. 4. Submission of the Corporate Debtor: The Corporate Debtor filed a detail reply, dated 10.04.2019, in response to the Demand notice, dated 29.03.2019, opposing the admission of the above Company Petition, more particularly on the ground of Pre-existing Dispute between the parties. The contention of the Corporate Debtor is as follows i. The Corporate Debtor had engaged with the Operational Creditor as a subcontractor under Pune ESR GSR Project for Construction of Elevated Service Reservoir, a Work Order dated 07.07.2017 for a period from 29.05.2017 to 31.08.2018 (together referred as "Subcontract". Pursuant to the enactment of the Central Goods and Services tax Act, 2017 on 12.04.2017, Work Order - 1 was amended on 09.10.2018. ii. The Corporate Debtor had made timely payments towards the works pe....
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....ed 12.10.2017. In furtherance to the Revised WO, the Operational Creditor had raised 5 RA bills which in actions show the acceptance of the revised WO. There, it can be concluded that, the amount claimed in the Demand Notice by the Operational Creditor are denied as they are already paid by the Corporate Debtor. vii. The Corporate Debtor further states that, due to the defective work during the execution, performed by the Operational Debtor, the Corporate Debtor has incurred additional cost. Apart from the subsequent delays in other works, at these 3 sites, for 4-6 months, on account of the irresponsible act of abandoning the site without any valid reasons works by the Operational Creditor, the Corporate Debtor has incurred the additional cost of Rs. 44,89,170/- viii. As per the terms and conditions, the material handed over to the Operational Creditor and the operational Creditor had the obligation to take care of the materials handed over for the execution of project but the materials were misappropriated by M/s. Monolith for which complaint was also filed to the police station. The cost of materials works up to Rs. 200554/-. The Operational Creditor showed a poor workmanship....
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....adly affecting the future schedule of the work. Take the correct action towards progress of work and arrange sufficient manpower at site so as to recover this delay in work. Also we are continuously following up to complete all pending finishing work of structure at site but your approach towards this work is poor. Please clear all pending finishing work as earliest. ii. Email dated 09.10.2018 addressed by Corporate Debtor to Operational Creditor with regards to the slow work progress Subject: Slow work progress Dear Akshay ji, We are again reminding you for slow work progress at Hadapsar ESR Ghorpadi, ESR 2. Ghorpadi For Hadapsar ESR last casting of 3rd Lift wall was done on 22/09/2018 since that in last 17 days no major work found on site. Currently only 3 workers are working on site. Please take necessary action from your site asap to recover the work schedule at site, Also for Ghorpadi ESR 3 backfilling was completed on 15/09/2018 but still plinth beam wok is not completed. Same is for ghorpadi esr 2,backfilling work was completed on 15/09/2018 but still today we don't find major work for tie beam, bottom shuttering is also not completed which is badly hamper....
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....vation is completed 95% and you can immediately deploy your labour for preparation of the PCC. iv. The Corporate Debtor by e-mail dated 02.11.2018 addressed a letter to Terminate to Operational Creditor Dear Mr. Akshay, This is very disheartening to say that you have not been able to boost the work progress since a long period of time for all allotted structures. Even after various commitments, you are not able to mobilize sufficient labours on your sites leading to the progress of work on a poor scale. No work progress has been observed at Hadapsar site after 3rd lift of wall casting on 22/09/2018 that should have reached to the level of top slab in present condition and complete de-shuttering is also not done till date for the same ESR even after several instructions. In the similar manner, for Ghorpadi ESR 02, last casting was done on 14-09-18. Since then no work progress has been observed at the concerned site due to insufficient manpower and for Ghorpadi ESR 03, Plinth beam casting was done on 22-10-18 succeeding the casting of staircase column on 07-08-18. The plinth beam work was completed in the period of more than 1 month. Also, it is observed that work is cont....
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....ave any further apprehensions. Needless to mention the Company (Larsen & Toubro ltd. Construction) does not stand responsible for nay loss or damages that have been or may be caused to your firm. 7. It is very clear from the above referred e-mails that there is a dispute even before the issuance of the Demand notice dated 29.03.2019. The Corporate Debtor had Terminated the Work Order between the parties, via letter dated 12.12.2018, which is also prior to the said Demand Notice. Thus, upon perusing the above e-mails, this Bench notes that both parties are in loggerheads much prior to issuing the Demand Notice. 8. In this context, it is appropriate to mention here that as per the law laid down by the Hon'ble Supreme Court in Mobilox Innovations Private Limited Versus Kirusa Software Private Limited, the Supreme Court clearly held that what 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 blu....