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2022 (11) TMI 933
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....abu Rao Kodali, Appellant herein, was a Member of Suspended Board of Directors, Navayuga Infotech Pvt. Ltd. Navayuga Infotech Private Limited is the 'Corporate Debtor' (CD) who is 2nd Respondent herein, had placed the Purchase Orders on the Vajra IOT Pvt. Ltd. (formally known as 'Green Ark Enersol Pvt. Ltd.') is the 'Operational Creditor'/ 1st Respondent herein. On 03.11.2015 , 2nd Respondent placed 2 Purchase Orders on 1st Respondent for the supply and installation of 20,000 AMR modems (including installation, commissioning, integration and service for 63 months) required for a project by 'Tamil Nadu Generation and Distribution Company' (in short "TANGEDCO"). 3. The 1st Respondent could, however supply only 16140 modems against 20000 modems as per purchase orders. Moreover, the 1st Respondent has completed installation of only 2945 modems as opposed all 20000 modems which were to be installed. In addition, the 1st Respondent did not give integration and Facility Management Services as expected from them as per contract. 4. It has been alleged that the supply of the modems was badly delayed in spite of the purchase order stipulating that all supplies need to be made within 60 day....
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....e Orders, the 1st Respondent is entitled to raise its invoices only after completion of installation of modems in each 'TANGEDCO' operating circle in Chennai and not based on the phase-wise delivery of modems. 11. The Learned Counsel for the Appellant contended that no payment was due and Section 9 application was not maintainable and the 1st Respondent claim is not untenable. 12. The Learned Counsel for the Appellant further stated that as per payment terms contained in clause 2 of Purchase Orders, the 1st Respondent is entitled to only 40% of the cost if 1st Respondent had supplied only modems and was not entitled for payment based on pro-rata number of modem supplied i.e. 100% upon for supply. Accordingly, Rs. 2,77,27,15/- has been paid to 1st Respondent. 13. The Learned Counsel for the Appellant clarified that this reflects that out of the aforesaid sum of Rs. 2,77,27,150/- paid to the '1st Respondent, main component i.e. Rs. 2,52,56,800/- represents 40% of the value of supplies and Rs. 23,04,253/- represents payment of further 20% towards the installation of 2945 modems in terms of clause 2 of Purchase Orders. The Learned Counsel for the Appellant emphasised that hence the ....
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....Limited vs Essar Oil Limited And Ors 2005 (1) ARBLR 454 AP. 19. The Learned Counsel for the Appellant pointed out that since clauses 5, 6 and 7 of Purchase Orders were never complied with by 1st Respondent, as a result of which 2nd Respondent cannot pay the amounts towards mere supply of modems. 20. The Learned Counsel for the Appellant also stated that the 1st Respondent has not produced a single document showing that it demanded earlier the amount claimed in Section 9 Application filed under I & B Code, 2016 from the '2nd Respondent, prior to Form 3 notice dated 30.11.2020. The Learned Counsel for the Appellant stated that there was no claim against the 2nd Respondent as there was pre-existing dispute. The Learned Counsel for the Appellant emphasised that the 'NOC' dated 08.12.2018 to approach 'TANGEDCO' was given on 1st Respondent's request without mentioning any specific amount due and merely certifying that 1st Respondent had supplied 16,140 modems and installed around 3000 modems. 21. The Learned Counsel for the Appellant admitted that the first demand raised by the 1st Respondent is by way of Form 3 to which the 2nd Respondent unfortunately could not reply but mere failur....
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....invoices. 26. The Learned Counsel for the Respondent stated that the 1st Respondent on various occasions approached the 2nd Respondent for clearing the dues but the 2nd Respondent despite assuring the 1st Respondent regarding the payment of the dues repeatedly failed to do so. The Learned Counsel for the Respondent further submitted that the 2nd Respondent vide letter dated 10.04.2017 has acknowledged and confirmed the supplies made by the 1st Respondent to the tune of 16,130 AMR modems and also in respect of modems which had been installed and integrated with the services of the 'TANGEDCO' which is the employer of the 2nd Respondent. Further, it is relevant to note that the 2nd Respondent has acknowledged its liability to pay the 1st Respondent by issuing 'NOC' dated 08.12.2018 wherein it has admitted to the supply of 16,130 modems and installation specified modems as per the contract and is further requested that the 1st Respondent to directly deal with the 'TANGEDCO'. The Learned Counsel for the Respondent stated that it is relevant to note that in terms of the said 'NOC' the 2nd Respondent has also affirmed that in case no money has been received from the 'TANGEDCO' in respec....
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.... and also perused record made available to us. Several issues have been raised in the Appeal which are required to be deliberated upon before coming to final conclusion. (I) Whether there exists debt which is due and payable and has not been paid? (II) Whether the 'Corporate Debtor' is liable to pay for the debts or not? Issue No. (I) Whether there exists debt which is due and payable and has not been paid ? * Sub-sections 10, 11 and 12 of Section 3 of the I & B Code, 2016 prescribes definitions of 'creditor' (including Financial Creditor), 'debt' and 'default' as follows:- (a) To understand better we must refer to the rule position regarding this issue in I & B Code 2016. (b) The debt has been defined in Section 3 (11) of I & B Code, 2016 which is as under:- "3(11). "debt" means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt;" (c) Since, the term claim is mentioned in above definition of debt, there is a need to refer to definition of claim under Section 3(6) of IBC which is as under:- "3(6). "claim" means- (a) A right to payment, whether or not such right is reduced to judgment, fixed, d....
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....ancial institution; (i) the amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in sub-clauses (a) to (h) of this clause; * The other relevant definition of I & B Code, 2016 with reference to this Appeal are 'Operational Debt' and 'Operational Creditor' which are as under:- "5(21). operational debt" means a claim in respect of the provision of goods or services including employment or a debt in respect of the [payment] of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority; "5(20). "operational creditors" means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred;" * These definitions make the distinction between Operational Debt and Financial Debt. As seen from above, 'financial debt' is an inclusive and non-exhaustive definition given under Section 5(8) of the I & B Code to mean "a debt alongwith interest, if any, which is disbursed against the consideration for time value of money. Financial creditors have relationship with the entity as financial contract, lik....
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....n of 2945 modems. This itself proves the existence of remaining unpaid dues. Hence, it is clear that there exists debt which was due and was not paid by 2nd Respondent (Corporate Debtor) to 1st Respondent (Operational Creditor). * This Appellate Tribunal notes that no concrete evidence has been brought out or documentation has been produced to establish that there existed any pre-existing disputes between the parties. The Arbitration proceedings that the 2nd Respondent is trying to portray as a pending dispute is infact not between the 2nd Respondent (Corporate Debtor) to 1st Respondent (Operational Creditor) and is rather between 2nd Respondent and his principal employer for the supply services i.e. 'TANGEDCO'. * This Appellate Tribunal, therefore, in the present appeal do not find any error in the 'impugned order' passed by the 'Adjudicating Authority' and notes that the 'Adjudicating Authority' followed all the steps laid down in Mobilox while ascertaining the application under Section 9. Therefore, this Appellate Tribunal holds that the 'Adjudicating Authority' has correctly examined the existence of debt which was not paid and there was no pre-existing dispute between the 2n....