TaxTMI 
TaxTMI 
2022 (12) TMI 271
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....was pleased to dismiss the application filed under Section 9 of the Code primarily on the ground of maintainability. It would be apt to reproduce the impugned order dated 09.02.2021 passed by the Adjudicating Authority as follows: "1. Ms. Mona Rawat, authorized signatory, on behalf of M/s. Agarwal Coal Corporation Pvt. Ltd. filed this Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 [hereinafter referred to as "the Code"] read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 [hereinafter referred to as "the Rules"], as operational creditor/applicant. 2. The applicant/operational creditor, a Pvt. Ltd. company having identification No. U23109MP2000PTC14351, and having its registered office at Indore, Madhya Pradesh, engaged in the business of Import and trade of coal, has submitted that the Respondent is indebted a total sum of Rs. 78,79,452/- (Rupees seventy-eight lakhs seventy-nine thousand four hundred fifty-two only) to the applicant towards the supply of goods. That, the aforesaid debt has fallen due on 06.05.2019. 3. In support of its claim, the applicant has annexed to the applicatio....
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....na Rawat to initiate CIRP against the respondent company. In short, at the time of issuing demand notices dated 29.11.2018 and 10.10.2019, Mr. Surendra Prasad Shukla, claiming to be the authorized signatory of the operational creditor company, in fact, had no authority to issue demand notice and the demand notice so issued by him is invalid in the eye of law. 9. Notwithstanding above, the documents so filed by the corporate debtor (page 14-31 to reply) show that there is/was pre-existing dispute between the parties with regard to quality of the goods supplied by the petitioner. It is found that vide offer date 05.07.2018 (page 15 to reply) the petitioner had offered to supply Indonesian Coal High Gross Calorific value (GCV)- GAR-5200 Kcal/Kg to the corporate debtor. The operational creditor assured to supply specified coal having specified GCV value and GAR to the corporate debtor and that the inspection report of independent agency in respect of quality, shall be final and binding to both the parties. Further, the corporate debtor had specifically pointed out that the corporate debtor will raise debit note on pro-rata basis in case the GCV (ARB) falls below 5100 and in ca....
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.... made supply which is under dispute i.e. to the tune of 1384.680 MT of coal through 39 trucks for the value of Rs. 85,79,477/- in between the period from 26.07.2018 to 30.07.2018 and again supplied 347.070 MT of coal vide 10 trucks for the value of Rs. 21,50,445/- in between the period from 01.08.2018 to 02.02.2018, total aggregating quantity of Rs. 1731.750 MT for the value of Rs. 1,07,29,923/-. There was total outstanding balance of Rs. 2,12,69,451.56 as on 02.08.2018. 7. It is further the case of the Appellant that after lifting the materials to the tune 5432.61 MT between 07.07.2018 to 02.08.2018 for an amount of Rs. 2,12,69,451/- and even after making full and final payment for the first trench supplies of Rs. 999.920 MT between 07.07.2018 to 10.07.2018 of Rs. 61,95,000/- and further after making the payment of Rs. 61,96,000/- for the supplies of 1000.600 MT, the Respondent sent a mail dated 04.08.2018 raising certain irrelevant quality issues including insisting for further sampling testing of the coal at Respondent's premises which was objected by the Appellant vide its mail dated 04.08.2018. Subsequently, the Respondent (Corporate Debtor) got a report dated 06.08.2018 in....
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.... that there were pre-existing disputes in between the parties. He submits that it is true that in a case of pre-existing dispute application under Section 9 of the Code may not be maintained but at the same time if the Adjudicating Authority was satisfied that without any reasonable pre-existing dispute for the purposes of raising question of maintainability a so called dispute is raised, in such situation the application filed under Section 9 of the Code was not required to be rejected merely on the ground of pre-existing dispute. 15. He further submits that before filing application under Section 9 of the Code demand notice under Section 8 of the Code was issued duly supported with the authorization by the Board. The Ld. Adjudicating Authority has incorrectly recorded in its order that no proper authorization was filed along with the application filed under Section 9 of the Code to show authorization to one Mr. Surendra Prasad Shukla, in the capacity of a Whole Time Director and authorized signatory of the Applicant Company. 16. Mr. Dhawan by way of referring to certain documents which have been brought on record has argued that there was no actual pre-existing dispute in b....
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....nd both will test the coal in their own lab whatever results comes will be average out by calculating it and report will be binding to both the parties". 20. By way of referring to contents of the aforesaid email he has argued that the Respondent had admitted that without any objection they had lifted the coal from Kandla Port and thereafter proposed for sampling. In sum and substance it has been argued that the impugned order is erroneous on two grounds. Firstly, the Ld. Adjudicating Authority has incorrectly mentioned that the demand notice under Section 8 was issued by a person who was not authorized by the Board and secondly, the dispute was insignificant to be treated as pre-existing dispute. According to him the Ld. Adjudicating Authority has grossly erred in rejecting the application filed by the Appellant under Section 9 of the code. 21. Mr. Abhijit Sinha, Ld. Counsel for the Respondent supporting the impugned order has argued that it was out and out a case of pre-existing dispute and as such Ld. Adjudicating Authority has rightly dismissed the application filed by the Appellant. Mr. Sinha, has also relied on the same document which was referred to by Ld. Counsel for ....
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....ing thereby to initiate necessary proceedings under Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor and appointing thereby Mr. Surendra Prasad Shukla to issue demand notice, the Impugned order reflects that said resolution was not brought on record. 25. On perusal of the paragraph 8 of the impugned order it is evident that the Adjudicating Authority on perusal of the record has recorded that both the demand notices, first dated 29.11.2018 and the second dated 10.10.2019 issued under Section 8 of the code which is pre-requisite for initiation of CIRP proceedings was signed and issued by one Mr. Surendra Prasad Shukla , in the capacity of whole-time Director and authorized signatory of the Applicant company, without there being any authorization. Once, the Ld. Adjudicating Authority had noticed that there was no specific authorization on record authorizing Mr. Surendra Prasad Shukla for issuance of demand notice under Section 8 of the code, such demand notice may not be termed in accordance with Section 8 of the code. 26. We are of the opinion that if the Appellant was not in a position to satisfy the Adjudicating Authority on the validity of the demand notice....