2024 (6) TMI 18

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ter called 'Operational Creditor'), vide a letter of acceptance by National Highway and Infrastructure Development Corporation Ltd (NHIL) for execution of four Lanning of Jhanji to Demow Section of NH37 from 491.05 Kilometre to 535.25 in the state of Assam on Engineering Procurement and Construction mode; ii) on 20.08.2019 since Operational Creditor (OC in short) failed to complete the project, they appointed M/s Kapasi Infracon LLP the Corporate Debtor (CD in short) to complete the project as a sub-contractor under Operational Creditor vide agreement. Under this agreement, CD was entitled to get 96.5% of the net amount received from NHIDCL of from each R.A. Bill and the OC was to take the remaining 3.5% towards management fee. Agreement also contain a reciprocal clause that the CD may utilise OC's resources such as plant and machiney, equipment, manpower, engineers and other functional staff to complete the project and charges and rates for the same were also fixed. iii) from 12.11.2019 to 27.12.2019 there existed various pre- disputes since inception amongst the CD and OC and the same is revealed from their communication; iv) corporate debtor completed about 41.50% of th....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....9.2023 the Adjudicating Authority admitted the Section 9 IBC petition; and. xix) on 08.09.2023 Ld. Arbitral Tribunal Kolkata rejected the Section 16 arbitration application filed by CD and observed there exist arbitrable disputes amongst the parties. 3. The impugned order dated 04.09.2023 was passed wherein the Ld. NCLT had held there was no pre existing dispute between the parties as the Operational Creditor on 15.07.2022 had served a demand notice under Section 8 of IBC to Corporate Debtor and it was replied on 21.07.2022 raising a dispute and before serving a reply to the demand notice, CD had also served a notice to the Respondent on 20.07.2022 through its Advocate under Section 21 of the Arbitration and Conciliation Act, 1996. In this notice the CD had demanded losses suffered due to JIL not allowing to remove the plant and equipment and GDCL had also collected hire charges for machinery during the periods where no work could be carried out due to hindrances such as CAA protests, covid induced lockdowns and it was noticed that prior to sending of demand notice dated 15.7.2022 various letters dated 11.5.2021, 20.11.2021 and 22.12.2021 regarding payment of statutory tax, re....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....rties, which may or may not ultimately succeed, and the Appellate Tribunal was wholly incorrect in characterizing the defense as vague, got-up and motivated to evade liability. 57. Learned counsel for the respondent, however, argued that the breach of the NDA is a claim for unliquidated damages which does not become crystallized until legal proceedings are filed, and none have been filed so far. The period of limitation for filing such proceedings has admittedly not yet elapsed. Further, the appellant has withheld amounts that were due to the respondent under the NDA till the matter is resolved. Admittedly, the matter has never been resolved. Also, the respondent itself has not commenced any legal proceedings after the e-mail dated 30th January, 2015 except for the present insolvency application, which was filed almost 2 years after the said e-mail. All these circumstances go to show that it is right to have the matter tried out in the present case before the axe falls. 5. The above quoted observations of the Hon'ble Supreme Court with regards to a pre-existing dispute qualifies a pre-existing dispute to be a defence which is not spurious, mere bluster, plainly frivolous or ve....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....or to receipt of demand notice under section 8 of IBC then the correctness of its truthfulness is only a matter of evidence. 8. The impugned order would rather show the Learned Adjudicating Authority took upon itself to appreciate rival contentions based upon documents produced to arrive at a finding whether the defence of CD was correct or not. In this regard we may say that the Ld. Adjudicating Authority has erred in exercising jurisdiction to evaluate whether the defence set up by the Corporate Debtor was correct or not. 9. On perusal of the impugned order we find the Ld. Adjudicating Authority has split the entire transaction into two independent contracts between the parties to obligation. The Ld. Adjudicating Authority failed to note the final bill dated 21.06.2022 raised by the Corporate Debtor for the work performed was rather emailed to the Respondent/Operational Creditor on 15.7.2022 at 11.46 A.M i.e. prior to the issue of demand notice. It was only after receipt of the same, a Section 8 demand notice was issued in late night at 9.24 PM. Even a reply raising dispute against the final bill issued by the Corporate Debtor/Appellant was issued by the Respondent on the same ....