TaxTMI 
TaxTMI 
2025 (7) TMI 1462
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....9. Aggrieved by the order of this Tribunal 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 Deb....
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....,80,892/- as claimed by Operational Creditor on 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 tw....
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....ebtor further pleaded that as per the statement 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:- ....
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..... Thus, this application is dismissed with no costs." 2.5. As noted above, 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 ....
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....d of." 2.6. From the judgment of the Hon'ble Supreme Court, as noticed above, following are two considerations 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 amo....
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....d fabricated documents. E-mail dated 17.05.2018 was sent from registered e-mail address of the Corporate Debtor which cannot 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 wa....
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....Operational Creditor. The figure Rs.72,71,010/- is clearly reflected in the ledger accounts filed by the Corporate Debtor, 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 whe....
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....es 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 special quantity 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 stat....
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.... responded by way of reply dated 11.01.2019 claiming to have received the Statutory Notice on 01.01.2019 taking frivolous pleas clearly and noticeably afterthoughts. It is pertinent to mention 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 not....
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....he Respondent and the same were duly accounted in the ledger account statements sent to the Respondent time and again. All other credit notes mentioned in the para under reply are denied being forged and fabricated 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....
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....u on total sales from Jitendra Impex Pvt. Ltd. effective 1st Jan.-2014. As agreed :- 1. We will give you Special Quantity Discount of Rs. 3/- per kg. 2. Special Qty. Discount will be effective 1st Jan.-2014 on our total Sales to you. 3. Credit Notes will be issued by 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....
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....PTC076873 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 Ref. No....................... CREDIT NOTE To : COMPACK ENTERPRISES INDIA (P) LTD Date 30th June 2014 Address: B-71, GT KARNAL ROAD, INDUSTRIAL AREA, DELHI TIN Number: 07800160082 Credit Note Number: 2014-2015/JIPL- Q1/30062014/0001- 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 ....
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....5 2,283.600 Kgs. 03-06-2014 RI/342/2014-15 5,958.200 Kgs. 04-06-2014 RI/349/2014-15 2,995.200 Kgs. 05-06-2014 RI/354/2014-15 7,249.500 Kgs. 05-06-2014 RI/357/2014-15 13,518.100 Kgs. 05-06-2014 RI/359/2014-15 4,243.900 Kgs. 05-06-2014 RI/361/2014-15 5,776.400 Kgs. 06-06-2014 RI/366/2014-15 7,130.700 Kgs. 06-06-2014 RI/367/2014-15 18,050.400 Kgs. 06-06-2014 RI/369/2014-15 21,492.900 Kgs. 09-06-2014 RI/377/2014-15 3,830.000 Kgs. 09-06-2014 RI/378/2014-15 9,916.400 Kgs. 09-06-2014 RI/381/2014-15 22,903.100 Kgs. 10-06-2014 RI/384/2014-15 19,482.000 Kgs. 11-06-2014 RI/388/2014-15 4,658.500 Kgs. 13-06-2014 RI/392/2014-15 5,357.800 Kgs. 16-06-2014 RI/398/2014-15 8,416.100 Kgs. 18-06-2014 RI/408/2014-15 6,971.600 Kgs. 21-06-2014 RI/435/2014-15 11,745.600 Kgs. 21-06-2014 RI/442/2014-15 15,918.200 Kgs. 23-06-2014 RI/446/2014-15 6,159.700 Kgs. 24-06-2014 RI/455/2014-15 10,258.000 Kgs. 24-06-2014 RI/456/2014-15 3,979.500 Kgs. ....
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....ENDRA IMPEX (P) Ltd. Director" 18. The above credit note indicate that the special quantity discount is being given @ Rs.2.5 per kg and the quantity of the kg and total credit has been mentioned. 19. The admission of the Operational Creditor for 8 credit notes and further case of the Operational Creditor that the said credit notes were duly reflected in the ledger of the Appellant fully proves the case taken by the Corporate Debtor that the benefit of special quantity discounts was extended. It is further relevant to notice that issuance of credit note is not being denied and out of 17 credit notes, only 8 credit notes are being admitted and what is pleaded by the Appellant is that "It is submitted that issuing credit notes was the sole discretion of the Applicant and the same were being issued whenever it was deem fit by the Applicant". 20. The trade practices adopted between the parties when are reflected by issuance of credit notes, we are not convinced with the submission of the Appellant that the credit notes were issued at the discretion of the Operational Creditor. In the ledger accounts submitted by the Corporate Debtor, all 17 credit notes were reflected and refle....
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....sent by the employee of the Corporate Debtor. In view of the ledger statement which has been brought on the record by the Corporate Debtor supported by credit notes and agreement between the parties to give special quantity benefit, the case of the Corporate Debtor cannot be thrown out only on one e-mail dated 17.05.2018 which has been claimed to have been issued by the Corporate Debtor confirming the balance as claimed by the Operational Creditor. 23. The basis of ledger statement of the Operational Creditor and showing the balance as on 01.04.2018 of Rs.2,34,10,945/- is founded on by not reflecting the other 9 credit notes which are claimed by the Corporate Debtor to have been issued by Operational Creditor for giving special quantity benefit. 24. As noted above, the main issue of dispute between the parties is regarding special quantity benefit which according to the Operational Creditor itself has been extended by issuance of 8 credit notes but have been denied by not issuing 9 credit notes which have been claimed by the Corporate Debtor. 25. In all facts, circumstances and materials brought on the record, we find substance in the submission of the Respondent that ther....
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....on by operational creditor. - (1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debtor copy of an invoice demanding payment of the amount involved in the default to the corporate debtor in such form and manner as may be prescribed. (2) 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 - (a) 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; (b) the [payment] of unpaid operational debt- (i) by sending an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the corporate debtor; or (ii) by sending an attested copy of record that the operational creditor has encashed a cheque issued by the corporate debtor. Explanation. - For the purposes of this section, a "demand notice" means a notice served by an operational creditor to the corporate debtor demanding 3[payment....
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....ble contention which requires further investigation and that the "dispute" is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defence is likely to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application." 30. The Hon'ble Supreme Court has categorically laid down that the Adjudicating Authority is to see at this stage as to whether there is a plausible contention which requires further investigation and that the "dispute" is not a patently feeble legal argument or an assertion of fact unsupported by evidence. The present is a case where from the ledgers as claimed by the Operational Creditor and the ledgers claimed by the Corporate Debtor the main dispute between the parties is with regard to issuance of credit notes with regard to special quantity benefit. On the o....
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....ear 2018 for two quarters. Categorical case of the Corporate Debtor was that special quantity discount was given as per agreed business terms. When the Operational Creditor denied the issuance of 9 credit notes as claimed by the Corporate Debtor, the Operational Creditor itself is raising dispute with regard to not issuing credit notes on all quantities of sale. When the Corporate Debtor has categorically denied the claim of the Appellant of outstanding of Rs.1,81,45,943/- as claimed in the demand notice and has come with a clear case that the total balance is Rs.22,56,833/- and said outstanding of Rs.22,56,833/- is being supported by special quantity discount as was agreed between the parties, we are of the view that the reply notice dated 11.01.2019 was clearly a notice of dispute issued by the Corporate Debtor and the defence which has been claimed in the reply to legal notice cannot be said to be patently feeble legal argument or an assertion of fact unsupported by evidence. 32. Counsel for the Appellant submitted that in reply to demand notice, Corporate Debtor has not referred to all credit notes nor filed the credit notes along with the reply to demand notice. We do not f....