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2025 (5) TMI 163
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....ate Debtor- 'B.S. Ispat Pvt. Ltd.' has been filed challenging the order dated 26.03.2025 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Court-I admitting Section 9 application filed by 'Armaco Infralinks Pvt. Ltd.'. 2. Brief facts and sequence of the events giving rise to this Appeal are:- 2.1. The Corporate Debtor- 'B.S. Ispat Pvt. Ltd.' is engaged in the business of mining and sale of coal and currently has license to mine coal from the coal fields at Marki Mangli III Mine under which ROM coal is supplied. The Respondent No.1- 'Armaco Infralinks Pvt. Ltd.' approached the Corporate Debtor to supply coal. On 19.03.2021, 'Armaco Infralinks Pvt. Ltd.' deposited advance of Rs. 1 crore with respect to supply of coal. The Respondent No.1 continued to buy coal from the Corporate Debtor of large quantities between April 2021 to September 2022. On 15.09.2022, 'Armaco Infralinks Pvt. Ltd.' issued a delivery order 3,00,000 MT coal at the stipulated price. On 16.09.2022 i.e. next date, a modified delivery order was issued by 'Armaco Infralinks Pvt. Ltd.' to the Corporate Debtor requiring supply of 60,000 MT @ 7,000 MT for total amount of Rs.42,00,00,000/....
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.... the Operational Creditor of Rs.35,58,16,538/- and did not authenticate the information. E-mail was sent by the Corporate Debtor on the same day to the NeSL. On 04.09.2024 itself 'Armaco Infralinks Pvt. Ltd.' sent a demand notice in Form 3 under Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 claiming operational debt of Rs.35,58,16,538/- giving the details of transaction. Date of default was mentioned as 15.08.2024. The Corporate Debtor on 11.09.2024 replied to the demand notice disputing the liability to pay amount of Rs.35,58,16,538/-. Corproate Debtor by e-mail dated 11.09.2024 has also issued debit note of Rs.18,89,86,562.40/- and it was claimed that credit lying with Corporate Debtor is only Rs.16,68,29,955.66/-. It was stated that the Corporate Debtor is ready and willing to supply coal valued at Rs.16,68,29,955.66/-. By reply to demand notice, notice was given in terms of Section 8(2)(a) of the IBC that there is an existence of a dispute which has been duly authenticated at the National e-Governance Services Limited (NeSL). Reply to demand notice in detail captures the sequence of the events and dispute any liability and pleads th....
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....ason mining operations will resume only after 20.09.2024 approximately. It is submitted that the Corporate Debtor having never refused to supply there is no occasion to treat any operational debt due on the Corporate Debtor. There was pre-existing dispute between the parties which is apparent from the e-mail dated 08.08.2024 sent by 'Armaco Infralinks Pvt. Ltd.' to Corporate Debtor and reply sent on 13.08.2024. It is submitted that the decision of the buyer to not take delivery is a clear dispute which needs to be adjudicated and no CIRP can be initiated on such a disputed claim. Counsel for the Appellant submits that the Corporate Debtor being ready and willing in delivering the goods, he is entitled to compensation and loss occasioned by the neglect and refusal of the Respondent No.1 to take delivery of the same. It is submitted that the demand notice dated 04.09.2024 was replied by the Corporate Debtor on 11.09.2024 within 10 days disputing the claim and which reply to demand notice is a notice of dispute within the meaning of Section 9(5)(ii)(d). It is submitted that the Adjudicating Authority has not adverted to the relevant materials on the record and ignoring the existence o....
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....co Infralinks Pvt. Ltd.', 'Armaco Infralinks Pvt. Ltd.' has every right to ask for refund by e-mail dated 08.08.2024. It is submitted that the letter dated 20.02.2025 relied by the Counsel for the Appellant during submission written by Bank of Maharashtra has no relevance it having written in response to the letter of Corporate Debtor dated 18.02.2025 i.e. after reserving of the order on 17.02.2025. Counsel for the Respondent has also referred to letter dated 25.02.2025 issued by Government of Maharashtra, Office of District Collector (Mining Section) addressed to 'Armaco Infralinks Pvt. Ltd.' where it was stated that B.S.Ispat Limited is not eligible to dispatch coal until all outstanding dues are paid in full. 6. Counsel for the IRP submitted that in pursuance of the order dated 26.03.2025, publication was made by the IRP on 27.03.2025 and IRP has received various claims and has received claims from various Operational Creditors. 7. Shri Gopal Jain, Learned Senior Counsel for the Intervenor submitted that the Corporate Debtor is liable for operational debt of other parties also from whom advance payment was taken for supply of the coal. He submits that the claims by other Opera....
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....al occasions including our recent meeting on 17.07.2024, that you should resume the supply of coal to our company, as no coal has been supplied to us since 01.06.2024. It has come to our notice now that the mines are inoperative. We are facing significant losses because of this, as we have borrowed money from banks and private individuals to remit advance monies to you, and we are currently paying interest on those loans only due to your failure to supply coal. Also, in your email dated 03.07.2024, you confirmed the balance of Rs. 35, 58, 16, 538.06/- and Rs. 1,00,00,000/-(Security Deposit) of Armaco lnfralinks as on 30.06.2024 in your books, with the ledgers sent to us. Given this situation, we request you to refund our monies within 7 days as confirmed by you. Thanking you. Regards, Gaurav Doshi Director" 12. Reply to the e-mail dated 08.08.2024 was sent by the Corporate Debtor to 'Armaco Infralinks Pvt. Ltd.' on 13.08.2024 which e-mail is as follows:- "Dear Sir, We acknowledge your mail and are making sincere efforts to curtail the outstandings at the earliest. You have been associated with us for a long time and we always valued your Company on priority. But as....
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.... to e-mail dated 03.07.2024, the balance amount Rs.35,58,16,538.06/- was asked to be refunded within seven days. E-mail dated 08.08.2024 demanding the balance amount was replied by Corporate Debtor on 13.08.2024 which e- mail is as follows:- "Dear Sir, We acknowledge your mail and are making sincere efforts to curtail the outstandings at the earliest. You have been associated with us for a long time and we always valued your Company on priority. But as you are kind enough, the mining operations are stand stopped due to heavy rains and mine is water logged since the last two months and considering the rainy season mining operations will resume only after 20th September approx. On the start of Coal production, we will intimate you immediately and will start dispatch. Till then it is requested to please bear with us. THANKS & REGARDS, PAWAN ROKADE B S ISPAT LIMITED, WARORA" 18. After 13.08.2024 next e-mail which was sent by the Corporate Debtor was on 26.08.2024 by which e-mail dated 03.07.2024 was recalled. The Operational Creditor took further steps which we shall notice hereinafter. The email dated 26.08.2024 is as follows:- "Dear Sir, We hereby withdraw and recall....
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....ying to misuse the above referred email to unlawfully enrich itself for the defective service rendered by it as an attempt to circumvent the agreed contractual terms and by taking the support of the above referred email which was obtained deceitfully and by using coercive techniques. You shall take note of this email and any misuse of the already withdrawn and recalled email dated 03.07.2024 sent by Pawan Rokade from the email id [email protected] at 17:04 (05:04 PM) [email protected] along with all the attachments thereto, will invite strict legal consequences. Thanks & Regards, Sagar Kasangottuwar VP (Finance & Accounts) B.S. Ispat Limited" 19. The above communication sent by the Corporate Debtor clearly stated that e-mail dated 03.07.2024 was sent by Pawan Rokade by misrepresentation and Pawan Rokade was not authorised to communicate on contractual terms. Thus, the confirmation of amount of Rs.35,58,16,538.06/- which was communicated by 03.07.2024 email was withdrawn. The next action which was taken by the Operational Creditor was sending information to the NeSL. Form C was sent by Operational Creditor as per Regulation 21 of the Insolvency and Bankruptcy Board of ....
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....ault Information as on 04/09/2024 Authentication Status Party Name Relationship UserId Status Date and Time of Authentication B.S.ISPAT LTD. Debtor 2701316 Disputed 04/09/2024 17:04:59 Reason for Dispute: Pre-existing Dispute. Remarks- No default has been committed by B S Ispat Limited. Pre-existing dispute exist prior to the issuance of Demand Notice dated 04.09.2024. Submitter Information Name Armaco Infralinks Private Limited UIN (PAN) AAUCA0687N Relationship Creditor Comm. Address PIN 442401 DOI / DOB 18/09/2020 Mobile No. 9xxxxxxxx1 Telephone No. 9xxxxxxxx1 Billing/ Comm. Address OPP AKASHWANI RAGHATATE LAYOUT A164, Chandrapur. CHANDRAPU R, Maharashtra India 442401 Email ID **************@gmail.com Email ID- Dispute AXlert **@gmail.com Other Part Details Debtor Name BS ISPAT LTD. Relationship debtor Regd./ Permanent Address Khasara No. 97, 101, 190, Village Salon Yesna Post Chinora. Tah. Warora Chandra-our Maharashtra Regd. Address PlN 442914 Billing I Comm. Address Khasara No. 97, 101, 190, Village Salon Yesna Post Chinora. Tah. Warora Chandra-our Maharash....
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....16,538.06/- or any part thereof as incorrectly demanded by you in your Demand Notice under reply. For the reasons elaborated below, it is evident that the Demand Notice is a pressurizing tactic adopted by AlPL to arm-twist us to succumb to your illegal demands. 3. At the outset, we vehemently deny the patently erroneous claim amount ofRs. 35,58,16,538.06/-, inasmuch as, after due and proper reconciliation of accounts, BSIL, has by its email dated 11.09.2024, issued Debit Note of Rs. 18,89,86,562.40/- to AIPL towards the coal already supplied to AIPL Therefore, the amount of AIPL's credit lying with BSIL is only Rs. 16,68,29,955.66/-, strictly as per the terms of the D.O. dated 16.9.2022 (on the basis of which the present Demand Notice has been sent to BSIL). We are ready and willing to supply coal valued at Rs. 16,68,29,955.66/-. 4. We hereby bring to your notice in terms of Section 8(2)(a) of the Insolvency and Bankruptcy Code, 2016 (hereinafter "IBC", for brevity), that there is an existence of a dispute as has been duly authenticated at the National e-Governance Services Limited, the Information Utility (hereinafter "NeSL Information Utility", for brevity). A copy of the....
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....egulations 2017, the NeSL-Information Utility has stated in its email dated 04.09.2024 (Annexure B) to BSIL that- We solicit your early action in the matter within 3 days of its receipt. BSIL has in conformity with the Regulation 21 and the email dated 04.09.2024 duly raised DISPUTE on 04.09.2024 at 17:04:59 stating, "Reason For Dispute: Pre-existing Dispute, Remarks- No default has been committed by B S lspat Limited, Pre- existing disputes exist prior to the issuance of the Demand Notice dated 04.09.2024." which is evident from the Authenticated Record of Financial Information - Form C annexed as Annexure A." 23. Reply to demand notice also pleads that demand notice was sent by the Operational Creditor within 57 minutes and 15 seconds after debt submission by 'Armaco Infralinks Pvt. Ltd.' to NeSL and without allowing the NeSL Information Utility to verify and authenticate the details. In paragraphs 7 and 8 again it was pleaded:- "7. The tearing hurry shown by AIPL in issuing the Demand Notice within 57 minutes and 15 seconds immediately after debt submission by AIPL without having due regard to the Regulation 21 of Information Utilities Regulations 2017 to allow the NeSL- lnfo....
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....ed, the Information Utility (hereinafter "NeSL-Information Utility", for brevity). A copy of the Record of Financial Information Form C in respect of the Debt Information submitted by AIPL indicating the 'Authentication Status' as DISPUTED is annexed herewith as Exhibit-A." 27. Record of Financial Information Form C as has been extracted above was also filed as Exhibit 8 of the reply to Section 9 application which clearly mentioned the status 'disputed'. 28. When we look into Section 9(5)(ii)(d) there are two circumstances under which Section 9 application deserves to be rejected i.e. (i) notice of dispute has been received by operational creditor or (ii) there is record of dispute in the Information Utility. In the present case, both the above clauses are fully met since notice of dispute has been received by operational creditor and there is record of dispute in the Information Utility. The record of dispute in the Information Utility as extracted above was information which was submitted by 'Armaco Infralinks Pvt. Ltd.' for authentication and authentication made on the same day by the corporate debtor disputing the information which is captured in the Information Utili....
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.... the defence of pre-existing disputed raised by the Corporate Debtor is merely a moonshine defence to cover up its failure to supply the goods against the advance, and the Operational Creditor is entitled to seek refund of such amount." 30. Adjudicating Authority adverted to Section 8(2)(a) and has made following observations in paragraph 41:- "41. The Corporate Debtor has disputed only part of the claim, and the remaining admitted amount of debt is more than threshold limit. There is no bar on adjudication of the nature of dispute, even if a dispute is reported in the record of NeSL - in terms of Section 8(2)(a) of the Code." 31. Section 8(2)(a) is a provision which provides that the corporate debtor shall, within a period of ten days of the receipt of the demand notice or copy of the invoice mentioned in sub-section (1) bring to the notice of the operational creditor existence of a dispute, if any, or record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute. Section 8(2)(a) does not in any manner dilute the requirement of Section 9(5)(ii)(d). The initiation of insolvency against the Corporate ....