TaxTMI 
TaxTMI 
2023 (1) TMI 194
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....mpugned order, the present appeal has been preferred. 2. The Learned Counsel for the Appellant/Operational Creditor, submitting the facts necessitating the filing of this appeal has submitted that they supplied garments to the Corporate Debtor, Kiaasa Retail LLP on the basis of orders received from the Corporate Debtor for the period October 2018 to February 2019. Goods were delivered within the given time-frame and no disputes or complaints was raised by the Corporate Debtor before or after the supply of goods and not even before the Adjudicating Authority. It has also been submitted that after some initial denial, the invoices raised have been acknowledged by the Corporate Debtor and that there has been no denial with regard to receipt of the goods delivered by the Operational Creditor. It is further submitted that the confirmation of accounts by the Corporate Debtor duly signed and sealed clearly indicates that debt has been established. It has also been claimed that the audited balance sheet of the Corporate Debtor for the year ending March 2020 acknowledges the debt. 3. Further adding that payment for the garments having become due from the Corporate Debtor and having remain....
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....ake any mention of bill being payable within 30 days from the date of invoice. It is also submitted that 4440 pieces of garments were received from the Operational Creditor. However, as the material supplied by the Operational Creditor could not be sold despite best efforts made by the Corporate Debtor, the Corporate Debtor was not required to pay any amount for the unsold items. It was also added that clause 9 of the draft MoU also provided that the Corporate Debtor will release refundable security deposit of Rs.30 lakhs towards stock to the Operational Creditor and that payment of Rs.16 lakhs was made to the Operational Creditor by the Corporate Debtor in three tranches on 10.01.2019, 02.03.2019 and 01.05.2019. 6. Narrating subsequent developments, it is submitted that the Operational Creditor entered the office of the Corporate Debtor on 01.05.2019 threatening and demanding payment for the goods sent by them. This incident compelled the Corporate Debtor to seek police intervention which led to the signing of a settlement between the two parties. By virtue of this agreement between them before the police on 01.05.2019, it was submitted by the Learned Counsel for the Respondent t....
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....f the Operational Creditor to Naveen Dalal stating that the terms and conditions contained in the draft MoU proposed to be entered between the Corporate Debtor and Operational Creditor were acceptable and that certain modifications thereto were also suggested by the Operational Creditor. We find that the draft MoU at item 1 states: "That the second party will supply ready made stitched ladies wear goods to the first party on sale or return basis in the brand name Kiaasa." (The first party here is the Corporate Debtor and the second party the Operational Creditor.) We also observe that Naveen Dalal was asked to move further on the draft MoU by an email dated 18.12.2018 as reproduced below: "From: PARIMAL VAKHARIA <[email protected]> Date: Tue 18 Dec 2018, 18.13 Subject: Re: Mou To: Naveen Dalal <[email protected]> Hello GREETINGS TO TEAM KIAASA thanks for MOU drafts. said MoU is between KIAASA RETAIL & PARIMAL VAKHARIA COUTURE. we agree upon each T & C mentioned in MOC except article no-2 & no-7. no-2 is about freight and which is completely clear that first party only will bare the logistics, our prices are Ex-factory basis. no-7 is about insurance f....
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....ion of liability was made by the Corporate Debtor in the said copy. In addition to this, neither the said ledger account nor the signature of the Corporate Debtor bears the date. Therefore, the said ledger account cannot be taken as an admission of liability on the part of Corporate Debtor in the absence of specific words "admitting the liability". Similarly, it cannot be ruled out that the signature of the Corporate Debtor on the ledger copy was obtained much prior to the police report and alleged settlement before police." 13. Furthermore from the submissions made by the Learned Counsel for the Respondent, we note that it has been contended that the ledger account of the Corporate Debtor in the books of the Operational Creditor for the period 01.04.2018 to 28.02.2019 as placed at page 41 of APB cannot be treated as admission of liability since the ledger account is not signed by any of the partners of the Corporate Debtor. Asserting that none of the two signatures therein are that of the partners as per Company Master Data, the Learned Counsel of the Respondent has stated that the reliability of the ledger account has been correctly disregarded by the Adjudicating Authority. W....
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....s and that if the goods could not be sold, they will return them before 15.10.2019. On the pointed query made during the pleadings as to why the goods of the Operational Creditor were not returned, it was clarified that that it was because the Operational Creditor had gone back on the said settlement by issuing a demand notice. However, it was added that the Operational Creditor were free to take the goods back anytime but that they never collected them. 17. We have seen the Impugned Order and note that the Adjudicating Authority having considered at length the contentions of both the sides held that the alleged settlement deed which is a bone of contention between the two parties is in the nature of pre-existing dispute which needs thorough investigation and therefore beyond the scope of the Adjudicating Authority in terms of the judgement of the Hon'ble Supreme Court in (2018) 1SCC 353 Mobilox Innovations Pvt Ltd vs Kirusa Software Pvt Ltd ('Mobilox' in short). It would be useful to peruse the relevant excerpts of the impugned order from paragraphs 6 to 8 as extracted hereunder: "6. The Operational Creditor in para 15 of their rejoinder dated 11.02.2020 admitted regarding the ....
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.... be looked into is whether the defence raises a dispute which needs further adjudication by a competent court. From the available material on record in the APB and after hearing the rival contentions of both the parties as noted in the preceding paragraphs, we are of the view that the Adjudicating Authority has correctly recorded the finding that there exist disputes between the two parties even prior to the date of demand notice both in respect of the terms and conditions of their business transactions and outstanding dues payable to the operational creditor. 19. In the Mobilox judgement, the Hon'ble Apex Court while interpreting Sections 8 and 9 of IBC lays down the guiding principle that the dispute must exist before the receipt of the demand notice or issue of invoice. It may be useful to notice the relevant part of the judgement as reproduced below: "51. It is clear, therefore, that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application under Section 9(5)(2)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It i....