AI Drafter 
TaxTMI 
TaxTMI 
2026 (4) TMI 12
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....for the disposal of the instant appeal are that the operational creditor is engaged in the business of floor coverings such as nylon and polypropylene modular carpet tiles and planks, carpet rolls etc. and in order to run its business effectively, the operational creditor appoints dealers and distributors. 3. It is reflected that the Corporate Debtor (CD) and Appellant entered into a dealership/distribution agreement dated 15.10.2019, whereby the CD/Respondent was appointed as the authorised dealer/distributor of the operational creditor on an exclusive basis for Delhi-NCR Region for a period of three years. As per the terms of the agreement the CD was required to clear the invoices drawn by the Operational Creditor as per the credit period as mentioned in the purchase order. However, it was specifically provided in the agreement that in no case the credit period shall exceed 40 days from the date of dispatch of goods made from Indian Warehouse and in case of dispatch of goods being made post import of the products from outside India which shall not exceed 90 days from the date of bill of lading (BOL). 4. It is further reflected that the CD issued several purchase orders to t....
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....10.2019), which clearly stipulates that the credit period shall not exceed 40 days in case of goods dispatched from Indian Warehouse and 90 days in case of dispatch from outside India, International Warehouse. 10. Ld. Counsel for the appellant has relied on the following table (part of the written submissions filed by the appellant) in order to show that the various invoices pertaining to which the credit period was 40 days has been wrongly shown as the period of 90 days and that the chart prepared by the Ld. Adjudicating Authority in para no. 16 of the impugned order is not correct. S. No. Date of Invoice Payment Due Date (+40 days) Invoice Amount (in Rupees) Date of Payment Amount Paid (in Rupees) Pending Amount (in Rupe es) 1) 28.11.2019 @ pg. 122 07.01.2020 22,13,220/- 08.09.20 20 3,56,605/- 18,56, 615/- 2) 10.12.2019 19.01.2020 1,18,998/- - - 1,18,998/- 3) 17.12.2019 @ pg.123 26.01.2020 17,12,706/- 31.12.20 20 3,93,015/- 13,19,691/- 4) 21.12.2019 @ pg. 124 30.01.2020 58,53,408/- - - 58,53,408/- 5) 26.12.2019 @ pg. 125 04.02.2020 12,28,517/- - - 12,28....
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....itted that reliance of the Ld. Adjudicating Authority on an email dated 06.04.2021 in order to assume a pre-existing dispute between the parties is without any basis as the same is of the date after the demand notice was issued by the appellant (08.05.2020) and therefore there was no pre-existing dispute as assumed by the Ld. Adjudicating Authority. 15. It is further submitted that in fact there is no inconsistency in the amount shown in the demand notice dated 08.05.2020 and Part IV of the petition. Elaborating further it is submitted that in the demand notice amount of Rs. 16,171,305/- has been claimed but after the issuance of notice the Respondent has made part-payments to the tune of Rs. 1,693,015.17/- in the month of June to December, 2020 and these payments were adjusted in the Section 9 petition and consequently the principal outstanding amount was recalculated to Rs. 14,558,946/- and the amount became Rs. 18,630,116/- by adding contractual interest as provided in clause 16 of the distribution agreement. Therefore, the mismatch in the amount mentioned in demand notice and Part -IV of the petition is on account of the payment made by the Respondents after issuance of Sect....
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....ard to the material supplied to Ernst and Young in India Ltd. and also that (iii) a tripartite agreement dated 27.04.2020 was executed between the appellant, CD and Belgotex Floor Coverings Ltd. pertaining to the same debt before issuance of notice by the appellant under Section 8 of the Code and also on account of the fact that Principal amount of debt in the demand notice dated 08.05.2020 and the Principal amount of debt as shown in application under Section 9 of the Code are different. 22. We recall that the appellant/operational creditor is engaged in the business of trading floor coverings and having its operation in various countries and it appoints dealers and distributors on exclusive and non- exclusive basis. The CD and the appellant/operational creditor entered into an agreement dated 15.10.2019, whereby the CD was appointed as the authorised dealer/distributor of the operational creditor on an exclusive basis in Delhi-NCR Region for three years and as per the terms of the agreement the CD was required to clear the invoices of the operational creditor within the credit period as mentioned in the purchase order, not exceeding 40 days from the date of dispatch of goods m....
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.....12.2019 (pg. 127) totalling invoice amount Rs. 12,115,714/- were pertaining to the 40 days' period and out of these invoices Rs. 749,620/- have been paid thus the total amount of Rs. 11,366,094/- had remained to be paid by the CD to the appellant. 28. We also notice that Ld. Adjudicating Authority in the impugned judgment for the purpose of holding that some of the invoices falls within the period provided under Section 10A of the Code as produced a table which we are also producing the same as under: S. No. Date of Invoice Ending of the Period of 90 days Amount covered under S. 10A in Rupees Amount beyond S.10A in Rupees 1. 22.11.2019 20.02.2020 4,26,196 2 27.11.2019 25.02.2020 4,60,378 3. 28.11.2019 26.02.2020 22,13,220 4. 17.12.2019 16.03.2020 17,12,706 5. 21.12.2019 20.03.2020 58,53,408 6. 26.12.2019 25.03.2020 12,28,517 7. 26.12.2019 25.03.2020 9,82,912 8. 30.12.2019 29.03.2020 5,953 9 02.01.2020 01.04.2020 14,34,921 10. 20.03.2020 18.06.2020 17,34,096....
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....recalled that even after the two invoices of the amount of Rs. 3,169,017/- appears to be barred by the period provided under Section 10A of the Code the remaining amount appears to be above threshold and therefore the application moved by the applicant under Section 9 of the Code could not be dismissed on this ground. 31. So far as the ground of pre-existing dispute is concerned it appears to be an admitted fact that no reply to the demand notice dated 08.05.2020 given by the appellant under Section 8 of the Code, was given by the CD and as per the time period provided in the invoices mentioned herein before the default has already occurred in the month of February, 2020 while the tripartite agreement was executed between the parties on 27.04.2020. A perusal of this agreement would conspicuously reveal that by entering into this agreement provision has been made for the payment of the dues by the Belgotex Floor Coverings Proprietary Ltd. to Belgotex India Pvt. Ltd. on behalf of Puneet India Pvt. Ltd. pertaining to certain commission which was owed by Belgotex South Africa to Puneet India Pvt. Ltd. and by executing this agreement the obligation of paying this commission has been ....