AI Drafter 
TaxTMI 
TaxTMI 
2025 (4) TMI 521
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....No. 180 (AHM) of 2022 ("Petition"). The Petition filed by the Appellant under Section 9 of the IBC against the Respondent / Corporate Debtor, Sadbhav Engineering Ltd was dismissed by the Impugned Order. Brief facts of the case 2. The Corporate Debtor was engaged by Uranium Corporation of India Ltd (UCIL) to carry out activities at Banduhurang Opencast Mines, Jamshedpur. Subsequently, the Corporate Debtor issued a Work Order to the Operational Creditor for drilling operations at the site, initially for a year, and later extended until March 31, 2020. Despite reminders, the Corporate Debtor failed to release outstanding payments to the Operational Creditor and, instead, denied claims and making baseless allegations. The Operational Creditor had issued invoices covering the period from November, 2018, to February, 2020, which were received by the Corporate Debtor on May 5, 2021. The Corporate Debtor also endorsed balance confirmations to the Operational Creditor. Subsequently, the Operational Creditor issued a Demand Notice under Section 8 of the IBC, which was duly received by the Corporate Debtor. With no resolution in sight, the Operational Creditor filed an Application under....
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....iate that going by the decision above, it was incumbent on the AA to examine whether the stand taken by the Respondent was mere bluster or patently feeble, which, however, the AA has failed to do. The Impugned Order is unreasoned and passed in violation of the principles of natural justice and in derogation of the principles underlying adjudication of an application under Section 9 of the IBC. 7. The Impugned Order is passed in derogation of the principles and tests to be applied in adjudicating a Section 9 Petition under the IBC. Submissions made by the Respondent 8. The present Appeal is not maintainable and is liable to be dismissed solely on the ground that there are pre-existing disputes between the parties. The Corporate Debtor has raised dispute with respect to the quantum of amount, multiple times prior to the issuance of the Demand Notice dated 31.12.2021 by the Petitioner. 9. The Appellant issued Legal Notice dated 18.2.2020 (Pg 77 of the Petition) calling upon the Respondent to pay an amount of Rs.4,96,19,400/. In the said Letter, the Appellant has admitted that the Respondent has paid an amount of Rs.1,89,20,129/- and, therefore, the Respondent is liable to ....
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...., which speaks volumes about the conduct of the Operational Creditor. The present Petition, therefore, deserves to be rejected. Respondent also relies upon judgment of Hon'ble Apex Court in Mobilox Innovations (P) Ltd. v. Kirusa Software (P) Ltd. (supra). 11. The Respondent has also raised objections with regard to the maintainability of the Application. Prior to issuance of Demand Notice on 07.03.2019, the Respondent had made number of complaints and had raised concern about the quality of machinery supplied by the petitioner. Copy of the e-mails sent by the Corporate Debtor between 25th April 2015 and 13^th December, 2016 of such complaints/e-mails are at page nos. 41-48. It is also matter of record that the Respondent had made complaints with regard to the quality of the machinery supplied by the Appellant. The Respondent has placed on record copy of the e-mails exchanged between the two parties clearly establishes that there is/was pre-existing dispute before issuance of the demand notice. Thus, the Application is also not maintainable on account of pre-existing dispute which was raised prior to the issuance of Demand Notice. Under the facts and circumstances as discussed in....
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....ally for a period of 1 year but was thereafter extended by the CD on 30.06.2018 till 31.03.2020. It is claimed that the Sole Proprietorship Firm continued to perform the works and completed all works to the full satisfaction of the CD on 29.02.2020, and had initially raised Proforma Invoice(s) for the period November 2018 to February 2020, which were subsequently replaced by the issuance of Tax Invoice(s) for the period November 2018-February 2020. 17. It is contended that despite repeated follow ups, requests and reminders, the CD ignored payment of the outstanding dues, as a result of which the Sole Proprietorship Firm was constrained to issue a Legal Notice to the CD on 18.02.2020 (Legal Notice) demanding payment of the outstanding dues of Rs.3,11,99,271/-. 18. The Respondent - M/s. Sadbhav Engineering Ltd. had replied to this legal notice on 02.03.2020 at (134 APB) in which the Respondent clarified that the figure of Rs.4,96,19,400 is misrepresented and incorrect. The total amount due and payable by the respondent was only Rs.2,73,50,698/- against which they had already made payment of Rs.2,11,07,989/-. Therefore, the total outstanding due was only Rs.68,39,886/- and afte....
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.... and the clear outstanding payable balance stands of Rs. 62,42,709/- 2) That the balance pending amount of Rs. 62,42,709/- will be released to your client within 20 days from the date of receipt of this letter. However, the amount of security deposit standing at Rs 5.97,177/- will be released only on successful discharge of the work order Contract as per the provisions of the Contract. 3. That on release of the outstanding payable amount, your client shall have to clear the GST liability as per law. Only thereafter your client can raise the further Tax Invoices for booking in the ledger account of SEL to clear the balance liability. Considering the matter, we request you to withdraw the notice as it is not valid in the eye of law." [emphasis supplied] 20. In response to the Letter dated 20.06.2021, once again the Appellant addressed a Letter dated 21.07.2020 (Pg 83 of the Petition), wherein the Appellant claimed an amount of Rs.3,11,99,271/-, which includes Rs.2,62,94,583/- towards tax invoice and Rs.49,04,688/- towards GST liability. Thereafter the Appellant issued a demand notice dated 31.12.2021. This was vehemently disputed by the respo....
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....pect to the quantum of amount allegedly due by respondent to the petitioner, multiple. times prior to issuance of Demand Notice dated 31.12.2021 by the petitioner." [emphasis supplied] 22. From the above exchange of correspondence between the Appellant and the Respondent, we find that there is a dispute with respect to quantum of the amount payable by the Respondent. We also find that this issue has been raised multiple times prior to the issuance of the demand notice dated 31.12.2021 by the Appellant. This has not been satisfactorily resolved. We are inclined to agree with the submissions of the Respondent that that UCIL is a Govt. body and all work done is to be certified by a third-party independent agency and the invoices have to be backed by the logbook maintained by the Appellant duly signed by the respondent and certified by an independent agency otherwise these are mere one-sided statements. Furthermore, we also agree with the contention of the respondent that mere stamping of the tax/proforma invoices done at the site office by lower functionaries of the respondent is indicative of mere receipt of the same; it does not mean that the same has been accepted by th....