TaxTMI 
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2025 (7) TMI 1462
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....dated 10.08.2020, the Corporate Debtor- M/s. Compack Enterprise India Pvt. Ltd. filed Civil Appeal No.3119 of 2020 before the Hon'ble Supreme Court. Hon'ble Supreme Court vide its judgment and order dated 18.04.2023 disposed of the Appeal setting aside the judgment and order dated 10.08.2020 of this Tribunal and remitted the matter to this Tribunal for fresh determination. Direction of the Hon'ble Supreme Court shall be noticed hereinafter. After the order of the Hon'ble Supreme Court dated 18.04.2023, this Appeal has been heard on 02.07.2025 and judgment reserved. 2. We proceed to notice brief facts of the case leading to filing of Section 9 application by the Operational Creditor, the Appellant herein. 2.1. The Appellant is a company which deals in the business of wholesale trading/ distributorship of paper and paper board for various paper mills such as Khanna Paper Mills Ltd., Century Textiles & Industries Ltd., Sidharth Papers Ltd. etc. Appellant has been supplying paper and paper board to the Respondent based on written/verbal orders received from the Respondent from time to time. Both Operational Creditor and the Corporate Debtor carried out their business from the F.Y. 20....
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.... 01.04.2018 was denied. It was pleaded that between 01.04.2018 to 28.12.2018, total payment of Rs.2,39,80,892/- have been made by the Corporate Debtor. It was further pleaded that the Operational Creditor has not issued credit notes for the period 01.04.2018 to 30.06.2018 and for the period 01.07.2018 to 30.09.2018 towards special quantity discount as per agreed business terms. The Corporate Debtor pleaded that the amount balance to be paid by the Corporate Debtor is Rs.22,56,833/-. Mention of two debit notes and two invoices, with regard to which material was rejected, was also made. It was pleaded that the Corporate Debtor is ready and willing to pay balance outstanding amount of Rs.22,56,833/- towards full and final settlement with all outstanding claim. It was pleaded that the Operational Creditor is making wrong and incorrect statement about outstanding amount. It was further pleaded that the Corporate Debtor did not place any order after 20.09.2018. Claim of two bills dated 22.10.2018 and 23.10.2018 as claimed in the notice was denied stating that neither any goods were received by the Corporate Debtor with regard to aforesaid two bills nor any order was placed. Along with re....
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.... of accounts maintained by Corporate Debtor, amount outstanding is only Rs.22,56,833/- which Applicant is willing and ready to pay. 2.2. The Appellant filed rejoinder affidavit. Appellant in the rejoinder pleaded that the letters filed by the Corporate Debtor dated 28.12.2013 and 16.04.2016 claiming special quantity discounts are forged letters. It was further pleaded that the false and fabricated credit notes have been annexed with the reply. Operational Creditor, however, in the rejoinder affidavit admitted having issued only 8 credit notes with respect to special quantity discounts, rest of the credit notes were denied and was claimed to have been manufactured by the Corporate Debtor. 2.3. The Adjudicating Authority heard the Counsel for the parties and by impugned order dated 23.08.2019 rejected Section 9 application. Adjudicating Authority also noticed the case of the Corporate Debtor that amount of Rs.22,56,833/- is due to be paid for which Corporate Debtor has handed over cheque before the Tribunal which was refused by the Operational Creditor. Aforesaid has been noticed in paragraph 4 of the order which is as follows:- "4. The Respondent made a categorical statement tha....
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...., against the order rejecting Section 9 application the Operational Creditor filed this Appeal in this Tribunal which Appeal was allowed by judgment of this Tribunal on 10.08.2020. Against the judgment dated 10.08.2020, Corporate Debtor has filed Civil Appeal No. 3119 of 2020 which Civil Appeal has been decided by the Hon'ble Supreme Court on 18.04.2023. The Hon'ble Supreme Court noticed the respective contention of the parties. It noticed that the claim of the Appellant was to the extent of Rs.1,81,45,943/- whereas according to the statement of accounts maintained by the Corporate Debtor and Corporate Debtor owed only Rs.22,56,833/-. The Hon'ble Supreme Court also noticed the judgment of the NCLAT that according to the Corporate Debtor, amount of Rs.22,56,833/- is due which amount is more than Rs.1 Lakh, application filed under Section 9 was sustainable. The Hon'ble Supreme Court had expressed disagreement with the reasoning of the NCLAT that on account of admission of amount of Rs.22,56,833/- which is more than Rs.1 Lakh, the application deserves to be admitted. The Hon'ble Supreme Court noticed that the Corporate Debtor has pleaded that the Corporate Debtor is ready to pay the s....
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....iderations which has to be undertaken by this Tribunal in pursuance of the order dated 18.04.2023: - (I) Therefore, in the present circumstance we are of the opinion that the judgment dated 10.08.2020 is liable to be set aside and the matter is to be remitted to the NCLAT to undertake the said exercise to find out as to whether any amount more than Rs.22,56,833/ is due as claimed by the respondent herein and thereafter arrive at its conclusion in accordance with law. (II) Needles to mention that on the said determination as indicated being done, the NCLAT will also keep in view the principles laid down in the case of Mobilox (supra) with regard to the pre-existing dispute or otherwise, insofar as the amount beyond the extent as has been indicated above. 3. We have heard Learned Counsel for the Appellant and Learned Counsel for the Respondent. 4. Learned Counsel for the Appellant in support of the Appeal submits that from the materials which have been brought on the record by the Operational Creditor, Operational Creditor has successfully proved that the amount outstanding to be paid by the Corporate Debtor is the amount of Rs.1,81,45,943/-. It is submitted that the amount of ....
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....not be permitted to be denied. 5. Counsel appearing for the Corporate Debtor refuting the submissions of the Counsel for the Appellant submits that the Adjudicating Authority has rightly returned a finding that Operational Creditor due to his inconsistent conduct has been unable to establish that the amount being claimed by Operational Creditor was owed by the Respondent. It is submitted that the Corporate Debtor has been making payment from time to time and the parties were in business for the last five years and Corporate Debtor stopped issuing any further purchase order only after 20.09.2018 and on the date when demand notice was issued, amount of Rs.10 Lakhs was paid by the Corporate Debtor. Appellant is on incorrect basis claiming due of Rs.1,81,45,943/- whereas Corporate Debtor has filed all its ledgers from F.Y. 2013-14 till 2018-19 which clearly reflect that the amount outstanding is only Rs.22,56,833/-. Corporate Debtor has offered the said amount to the Operational Creditor before the Tribunal which was not accepted by the Appellant and the cheque was kept by NCLT on record which fact has been recorded in the order dated 14.05.2019 of the NCLT. It is submitted that the d....
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....hence, the ledger account of the Corporate Debtor is in accordance with the said confirmation. It is stated that insofar as e-mail dated 17.05.2018 is concerned, although said was issued from e-mail address of the Corporate Debtor but it was not sent by any Director but claimed to be sent by one Santosh which email was clearly denied even in the reply to demand notice. It is submitted that the Appellant with dishonest intention had issued Section 8 notice and false and concocted figures are being claimed by the Appellant after Corporate Debtor stopped giving purchase order from 20.09.2018. Appellant is in habit of manipulating bills and ledger which is clear from the fact that the Appellant wanted to claim CENVAT of Rs.19,63,390.19/- from the Central Government on basis of bogus invoices which was prepared in the name of the Corporate Debtor issued from Khanna Papers Mills Ltd. and it is admitted fact that no goods were received under 166 invoices for which certificate was asked for by Operational Creditor itself. It is submitted that the present was a case where pre-existing dispute was very much there and Corporate Debtor having issued reply to demand notice has issued a notice o....
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....ntity discount as per the agreed business terms. Therefore my clients have issued two debit notes no. COM/DN/126 dated 20.07.2018 for RS. 6,06,989/- and COM/DN/22 dated 15.10.2018 for Rs. 5,83,685/- towards the same, which your clients have concealed. Copy of debit notes dated 20.07.2018 and 15.10.2018 are annexed hereto. 5. It is important to point out that your clients have intentionally and deliberately not reflected in their alleged statement of account the invoices no. 559 dated 04.09.2018 for Rs. 59,476/- and 560 dated 04.09.2018 for Rs. 21,250/- (which were duly received by your clients) towards rejected material returned to your clients. Copy of invoices both dated 04.09.2018 are annexed hereto. 6. It is pertinent to mention here that my clients are ready and willing to pay the balance outstanding amount of Rs. 22,56,833/- to your clients towards full and final settlement of all the outstanding claim. It is submitted that it is really unfair on the part of your clients to make wrong and incorrect statements about outstanding amounts. 7. It is vehemently denied that an amount of Rs. 1,81,45,943/- is due and outstanding against my clients as per computation in tabular....
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.... that no pre-existing dispute has been highlighted or pointed out by the Corporate Debtor in its reply to the Statutory Notice. It is submitted that there was no agreement between the Operational Creditor and the Corporate Debtor where the Operational Creditor has allegedly agreed to grant the Corporate Debtor any Special Quantity Discount much less the one allegedly claimed by the Corporate Debtor. Reply dated 11.01.2019, sent by the Corporate Debtor to the Operational Creditor has been annexed herewith and marked as ANNEXURE-F." 10. A detailed reply to Section 9 application was filed by the Corporate Debtor which is Annexure 11 to Appeal. In Paragraph 5 of the reply, Corporate Debtor has claimed that credit notes have been issued by the Operational Creditor for the F.Y. 2013-14 to 2017-18 and letters dated 28.12.2013 and 16.04.2016 have been issued by the Operational Creditor in that regard. Details of 16-17 credit notes have also mentioned in paragraph 5 of the reply. It is useful to notice paragraph 5 of the reply:- "5. Without prejudice to the aforesaid preliminary objections, it is submitted that the applicant completely concealed the fact that the Applicant also issued cr....
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....ated which were never issued by the Applicant. It is also submitted that vide email dated 20.01.2018 the Applicant had sent the statement of account qua the sale made by it to the Respondent for the period 01.11.2017 to 31.12.2018. Notably, the Respondent has never raised the issue regarding factoring of the forged credit notes dated 06.12.2017, 07.12.2017, 31.12.2017 and 31.03.2018 inasmuch as there existed none. As such the story regarding factoring of the Forged Credit Notes ought to be rejected by this Hon'ble Adjudicating Authority. Further, the contents of the aforementioned paragraphs are reiterated and reaffirmed. Email dated 20.01.2018 sent by the Applicant to the Respondent along with the statement of accounts for the period 01.11.2017 to 31.12.2018 is annexed herewith and marked as Annexure-A-7. 6. The contents of Para 6 are denied being incorrect, baseless and afterthought. It is denied that the Applicant was under obligation to issue any credit notes much less alleged credit notes amounting to Rs. 6,06,989.50 for the period 01.04.2018 to 30.06.2018 or Rs. 5,83,685/- for any period much less the period from 01.07.2018 to 30.09.2018. It is denied that any special ....
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....us to you on quarterly basis after the end of each quarter @ Rs. 3/- per kg. Regards, For Jitendra Impex Pvt. Ltd. Vishal Jain Director" "TIN : 07490238580 011-23243934 CIN: U17211DL1996PTC076873 011-23247015 E-mail: jitendra_impex @yahoo.com" "Jitendra Impex Pvt. Ltd. Deals in: Paper & Board 908/102; 1st FLOOR, MAHARAJA AGGARSEN MARKET, CHAWRI BAZAR, DELHI-110006 Dated 16-04-2016 Ref. No....................... Minutes of Meeting Held at Compack Enterprises India Pvt. Ltd. Office on 20th April-2016 Present: Vishal Jain, Director - Jitendra Impex Pvt. Ltd. Anil Gosain, Director - Compack Enterprises India Pvt. Ltd. Subject: Change in Special Quantity Discount w.e.f. 01-04-2016 Dear sir, Please refer our discussion in your office regarding change in Special Qty. Discount applicable to you w.e.f. 01-04-2016. The following is discussed and mutually agreed: 1. Jitendra Impex Pvt. Ltd. have been giving special qty. discount of Rs. 3.00 pér kg. since January, 2014 to Compack Enterprises India Pvt. Ltd. 2. Henceforth, special qty. discount will be Rs. 2.50 per kg. with effect from 1st April-2016 on all supplies made to Compack Enterprises India Pvt. Ltd....
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..../0001- COMPACK Attention: Your Order Number: DESCRIPTION Description Quantity Unit/Price Amount credited Special Quantity Discount Quarterly from July 2014 to September 2014 634374 KGS 3/- PER KGS 19,03,122 000 Total 21,66,567 000 VAT @ % N/A Round (+) 000 Total Credit Due 21,66,567 000 Authorised By: For Jitendra Impex. (P) Ltd. Name: Vishal Jain Signature: Date: Jitendra Impex Pvt. Ltd. 908/102; 1st FLOOR, MAHARAJA AGGARSEN MARKET, CHAWRI BAZAR, DELHI Party: COMPACK ENTERPRISES INDIA (P) LTD From 1-4-2014 to 30-6-2014 Date Bill/Vch No. Qty. Unit 09-04-2014 RI/30/2014-15 4,585.00. Kgs. 11-04-2014 RI/38/2014-15 24,159.200 Kgs. 11-04-2014 RI/39/2014-15 17,532.900 Kgs. 11-04-2014 RI/40/2014-15 15,030.200 Kgs. 11-04-2014 RI/43/2014-15 13,817.600 Kg....
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....0 Kgs. 25-06-2014 RI/459/2014-15 18,978.600 Kgs. 26-06-2014 RI/463/2014-15 13,131.400 Kgs. 30-06-2014 RI/485/2014-15 5,832.000 Kgs. Total 7,22,189.600 16. The above credit note which is admitted credit note indicate that @Rs.3/- per kg special quantity discount have been given quarterly i.e. from 09.04.2014 to 30.06.2014. The credit note was note given due credit of Rs.21,66,567/-. Total quantity is also mentioned in the credit note as Rs.7,22,189.600/- kgs. Along with the credit note, the details of invoice and quantity have been mentioned. We have noticed that all 17 credit notes which have been relied by the Corporate Debtor were filed along with the Reply with supporting documents. Supporting documents clearly indicate the date, invoice number/ Bill/Voucher No. and quantity and on total quantity, credit note is being claimed. 17. We have noticed that in Section 9 application, Operational Creditor has denied having any agreement between the parties to give any special quantity discount but when in the reply Corporate Debtor has come up with all credit notes with supporting documents, the Operational Creditor choose....
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....een filed by the Corporate Debtor containing the outstanding balance of Rs.22,56,833/-. The carrying on business between the parties is matter of fact and it is also pleaded by the Appellant that there has been no dispute between the parties for the last few years and the Corporate Debtor's case is that payments were made from time to time which were being reflected in the ledger statement of Corporate Debtor. 21. Counsel for the Appellant has laid much emphasis on the e-mail dated 17.05.2018 stating that e-mail was sent from the e-mail address of the Corporate Debtor admitting the ledger statement as on 01.04.2018. Copy of the e-mail dated 17.05.2018 which was part of the demand notice as well as Section 9 application is relevant to notice. The e-mail dated 17.05.2018 claimed to be issued from e-mail address of one Mr. Anil Gosain, Director of the Corporate Debtor, which is as follows:- Subject: Re: BALANCE CONFIRMATION 30-04-2018 (COMPACK ENTERPRISES) From: Anil Gosain ([email protected]) To: [email protected] Date: Thursday, 17 May 2018 4:42 PM Dear Sir, Our balances on 30.04.2018 are under: Compack Enterprises 1. JITENDRA IMPEX PVT.LTD. Rs. 2,34,10,945.00 Cr....
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.... notes are being admitted fully proves that there was business terms between the parties to extend special quantity benefit to the Corporate Debtor on the orders issued by the Corporate Debtor. The Corporate Debtor after reflecting all credit notes as per the Corporate Debtor has prepared the ledger balance whereas the Appellant is denying issuance of 9 credit notes. Denial of letters dated 28.12.2013 and 16.04.2016 which was claimed by the Corporate Debtor of extending special quantity benefit to the Corporate Debtor becomes meaningless since in spite of the said denial of the letters, Operational Creditor had extended the said special quantity benefit which is admitted by accepting 8 credit notes and reflecting the said benefit in its ledger accounts according to own case of the Operational Creditor. 26. In view of the above circumstances, we are satisfied that the ledgers which have been maintained and submitted by the Corporate Debtor before the Adjudicating Authority from 2013-14 to 2018-19 are to be relied and the Corporate Debtor is correct in his submission that as per the ledgers maintained by the Respondent, the amount of Rs.22,56,833/- was outstanding. Corporate Debtor ....
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....leaded the dispute between the parties. Relevant paragraphs of reply to demand notice we have already extracted in foregoing paragraphs of the judgment. The Hon'ble Supreme Court in "Mobilox Innovations Private Limited" (supra) has laid down following in paragraph 34:- "34. Therefore, the adjudicating authority, when examining an application under Section 9 of the Act will have to determine: (i) Whether there is an "operational debt" as defined exceeding Rs.1 lakh? (See Section 4 of the Act) (ii) Whether the documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid? and (iii) Whether there is existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt in relation to such dispute? If any one of the aforesaid conditions is lacking, the application would have to be rejected. Apart from the above, the adjudicating authority must follow the mandate of Section 9, as outlined above, and in particular the mandate of Section 9(5) of the Act, and admit or reject the application, as the case....
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.... Creditor out of 17 credit notes has accepted only 8 credit notes leading to difference in the ledger statement maintained by both the parties. The Corporate Debtor in the reply to demand notice issued on 11.01.2019 itself has pleaded that the Operational Creditor has been given special quantity discount as per the agreed business terms between the parties. Complaint was made that no credit notes have been issued for the period 01.04.2018 to 30.06.2018 and for the period 01.07.2018 to 30.09.2018. It is useful to notice paragraph 4 of the reply which is as follows:- "4. It is vehemently denied that during the period from 01.04.2018 till 28.12.2018, my clients made payment of Rs. 2,61,87,011/- to your clients. It is further denied that there was an opening balance of Rs. 2,39,80,892/- as on 01.04.2018. But the fact is that my clients during the period from 01.04.2018 till 28.12.2018 made a total payment of Rs. 2,59,80,892/- to yours clients leaving a balance of Rs. 22,56,833/-, It is submitted that your clients have not issued credit notes amounting to Rs. 6,06,989.50 for the period 01.04.2018 to 30.06.2018 and Rs. 5,83,685/- for the for the period 01.07.2018 to 30.09.2018 towards ....