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2025 (5) TMI 164
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....ted the Corporate Debtor's defence that there were concerns regarding the quality of work, and hence, no operational debt was due and payable It was held that this falls within the scope of Section 9(5)(ii)(d) i.e. there is an existence of a prior dispute. Submissions of the Appellant 2. On 08.10.2021, the Corporate Debtor-DLF issued a tender for piling works at its commercial project located at 35, Patto Plaza, Panji, Goa- 403001. The Operational Creditor (M/s Drilltech Engineers Pvt. Ltd.) submitted its bid and was declared the successful bidder. Based on discussions and negotiations, a Letter of Intent (LOI) was issued on 18.11.2021 for 335 piles. The Operational Creditor mobilized plant and machinery to the site on 30.11.2021 and 06.12.2021. A formal agreement incorporating the LOI and terms and conditions was signed on 25.11.2021. The work was executed in phases. Interim and RA (Running Account) bills were raised after approval of Proforma invoices by the Corporate Debtor. The payment due date was 10 days from the date of invoice approval. On 05.03.2022, an amendment (No.-01) was issued for 100 additional piles, of which 98 were fully completed and drilling of 2 pile....
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....r contradicts the assertion of a pre-existing dispute. The reply to the Section 8 notice served by the Operational Creditor was riddled with vague, concocted, and unsubstantiated allegations, raised only after the demand notice was issued on 01.07.2022. The Corporate Debtor's response, dated 12.07.2022, failed to establish any real, bona fide dispute. The timing of the response, coming only after the refusal of the additional 16-pile assignment and the issuance of the demand notice, renders the defence highly suspicious and non-genuine. Such afterthought justifications do not qualify as pre-existing disputes under the judicial precedents laid down by the Hon'ble Supreme Court, including the landmark judgment in Mobilox Innovations Pvt. Ltd. v. Kirusa Software Pvt. Ltd. The conduct of the Corporate Debtor further supports the position that there was no dispute prior to the notice. Initial payments made on earlier invoices and continued issuance of work orders serve as clear acknowledgments of debt. Such behaviour constitutes an admission of liability, as against any subsequent denial. The invoices were not only raised in accordance with contractual terms but also approved, at least ....
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.... a reply dated 12.07.2022. 8. From the materials on record we find that before the demand notice dated 01.07.2022 was issued by the Operational Creditor - Drilltech Engineers, the Corporate Debtor - DLF had already issued a Show Cause Notice (SCN) dated 21.06.2022, which is being dealt little later as per chronology of events. From the records, it can also be seen that the show cause notice had called upon the Operational Creditor to rectify the defective works and reserved its rights to recover revenue losses suffered by it. 9. Even prior to SCN, the Corporate Debtor had been corresponding with the Operational Creditor on various issues, which is noted in next few paragraphs. Through its letter dated 15.12.2021, the Corporate Debtor had brought to the notice of the Operational Creditor - M/s Drilltech Engineers Pvt. Ltd. about various issues relating to slow progress and the site protection. These issues are extracted as below: "1. Mobilization of 4 nos Rigs 4 nos rigs was supposed to be Mobilized within 10 days from date of issue of LOI (18.11.2021) i.e, by 28 Nov 21. 3 nos Rigs with complete accessories was reached on site on 6th Dec 2021 and 4th Rig on 11th Dec 2....
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....based on the problem intimated by M/s Drilltech, DLF have completed 50% filling of site up to 6th Dec 21 and Workfront for 150 piles was available to the contractor. The surface condition for starting of piling work was not intimated by contractor to DLF before issue of LOI, thus any delay in this regard will solely be on contractor part. Also, date of handover of site will not be changed and will be considered as same as date of LOI. 7. Security & Lighting: As per clause 29 of the GCC, the contractor shall provide & maintain, at his cost, all lights, quards, fencing, and security when and where necessary or required by Engineer or by any duly constituted authority for the protection of works, materials, plants and equipment, including the property of the owner. M/s Drilitech has not provided security and adequate lighting at site. Hence, DLF, reserves the right to deploy the Security & Lighting at risk & cost of the contractor. Thus, M/s Drilltech is required to take appropriate measure & also to comply with all applicable laws to finish the work within stipulated timeline as per LOI. For your necessary action & record." [emphasis supplied] 1....
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....ARTING AWAY THE MUCK FROM SITE PREMISES PARTICULAR FORM ZONE 01 & ZONE 02, IS NOT YET INITIATED IN SPITE OF CONSTANT FOLLOW-UPS 2-NO ACTION HAS BEEN TAKEN UP TILL DATE ABOUT CLEANING OF EXTERNAL ROADS ON REGULAR BASIS AS THE SAME ARE GETTING SPOILED DURING CARTING OF MUCK. 3-DISPOSAL OF CONCRETE IN INAPPROPRIATE MANNER INSIDE THE PREMISES 4-SEEPAGE OF NIGHT SOIL THROUGH THE SEPTIC TANK, TOILETS CONSTRUCTED FOR LABOURS It has been constantly communicated to you as well as with your site team in timely manner thru mails dtd. 27th Dec 21, 29th Dec 21 & 05th Jan 22, but as on date no action has been taken to attend & conclude the same. Now the Excavation agency is on board and ready in position to start the work. But due to the above said hindrance cited 01 the activity is getting delayed. Expecting action at your end with immediate effect. Also you are intimated herein to make attention towards HSE aspects (refer point cited 02 to 03)" [emphasis supplied] 13. On 12.03.2022, the Corporate Debtor once again raised the issues relating to the work which is extracted as below: "This is to bring to your notice that, ....
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....ed by another letter on 02.05.2022, wherein the Corporate Debtor rejected incentive request and directed to complete the entire scope of filing works as per the tender / contract specifications urgently and without fail. And since the Corporate Debtor has claimed to incur losses and was continuing to do so due to non-performance of the Contractor - Operational Creditor it claimed to reserve its rights to recover the same from the contractor - Operational Creditor. On 23.05.2022 we find another letter, wherein the Corporate Debtor wrote then that since the Operational Creditor has shown their inability to carry out such orders therefore, the Corporate Debtor is entitled to employee another contractor at the risk and cost of the Operational Creditor. 16. We find that the Corporate Debtor issued a show cause notice to the Operational Creditor on 21.06.2022, which is instructive to note as follows: "Ref No.: DL/PP/DEPL/004 21-Jun-2022 M/s. Drilltech Engineers Pvt. Ltd., 505-B, Kanara Business Centre, Near Laxmi Nagar Bus Stop, Ghatkopar (East), Mumbai-400 075. Sub: - Piling Works at Plot # 35, Patto Plaza, Panaji, Goa-Sh....
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....dertake rectification of all defective works and confirm mobilization schedule for the same in writing within 7 working days from receipt of this letter. 2. Submit No claim certificate and NOC of RMC suppliers and other agencies. 3. Submit GST deposit proof." [ emphasis supplied ] 17. In the meantime, the Operational Creditor had sent notice dated 01.07.2022 to the Corporate Debtor vide email as well as speed post which was replied by the Corporate Debtor on 12.07.2022 and on 30.07.2022 the Operational Creditor filed an Application under Section 9 of the Code. The Appellant-Operational Creditor - Drilltech Engineers claims that the alleged disputes were raised post facto. The Corporate Debtor had availed GST input credit on invoices, for which the work has already been performed by the Operational Creditor, but were subsequently disputed by the Corporate Debtor for evading payment. Corporate Debtor had made partial payments without protest and continued receiving services from the Appellant. Corporate Debtor had disputed its liability only before the NCLAT. The prior conduct of Corporate Debtor - DLF for approving the work, making the payments and fail....