NCLT New Delhi-II (2021.08.16) in K K Continental Trade Ltd. Vs. Diamond Traexim Pvt. Ltd [(IB) -172/ ND/2021 ] held that;
It is clear, therefore, that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application under Section 9(5)(2)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility
Therefore, all that the adjudicating authority is to see at this stage is 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 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.”
" In a recent judgment of this Court in Mobilox Innovations Private Limited vs. Kirusa Software Private Limited1, this Court has categorically laid down that IBC is not intended to be substitute to a recovery forum. It is also laid down that whenever there is existence of real dispute, the IBC provisions cannot be invoked......”
Excerpts of the order;
This Application is preferred under the Section 9 of the Insolvency and Bankruptcy Code, 2016 (for brevity ‘IBC, 2016') read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 by M/s K K Continental Trade Ltd. through its authorized Representative Sh. Hemant Jindal Director of the Operational Creditor (for brevity, Applicant/Operational Creditor), with a prayer to initiate the Corporate Insolvency Resolution Process against M/s Diamond Traexim Private Limited (for brevity, 'Corporate Debtor').
# 4. That it is submitted by the Applicant that in pursuant to the aforesaid High Seas Sale Agreement dated 10.04.2018, the Corporate Debtor purchased 2000 metric tons of Crude Palm Oil of (Edible Grade) in bulk from the applicant for which an Invoice being SI. No. 02/2018 19 dated 23.04.2018 for an amount of Rs. 9,06,00,000/- was raised @ Rs. 45,300/- PMT. It has been added that towards the aforesaid invoice, a part payment of Rs. 2,76,55,000/- only is received till date and the balance amount of Rs. 6,29,45,000/-remains due and unpaid.
# 15. After hearing submissions of both the parties and perusing the application and documents placed on record, we observe that the present claim of Rs. 6,29,45,000/- of the Applicant primarily arose out of the High Seas Sales Agreement, the dispute relating to which was referred by the Applicant to the Arbitrator by invoking Arbitration clause of the Agreement.
# 16. We further find that the Ld. Sole Arbitrator in para 12 of the Arbitral Award dated 23.08.2019 has opined and concluded as reproduced below :
"12. After going through the records of the case, documents exhibited and admissions during the cross examination and in the statement of claim I am of the considered opinion that admittedly the material supplied to the Respondent by the Claimant was on "As is Where is Basis'' whereas there is no clause in the High Seas Sales Agreement which states that the material is to be supplied on "As is Where is Basis". Besides above the Claimant has also admitted in their correspondences with the Respondent that the Claimant is in the process of forwarding the Complaint/ Claim of Rs.9,06,00,000/ of the Respondent to the supplier and once the complaint is addressed and any claim is received the same will be forwarded to the Respondent. In view of the above facts and findings, the claim of the Claimant is premature and can be filed only after the complaint/ claim of Rs. 9,06,00,000)- of the Respondent is addressed to by the supplier of the Oil to the claimant. Accordingly the Claim of the Claimant is dismissed. The CounterClaim of the Respondent also deserves to be dismissed. The parties are at liberty to file fresh claims/ counterclaims after the supplier have addressed the complaint / claim of the Respondent once it is lodge by the Claimant with the supplier. No Order has to costs.
# 17. We observe that the Operational Creditor has claimed the same (balance) amount of Rs. 6,29,45,000/- in Part IV of the present Petition filed under Section 9 of the IBC 2016, which was the subject matter of the Arbitration (reference: paragraph 9 of the Award) and which has already been rejected by the Ld. Sole Arbitrator. That further, there is no averment made by the Applicant/Operational Creditor in its Petition with regard to the steps it had taken for lodging its claim with the original Supplier on the basis of the complaint of the Corporate Debtor/Respondent, in terms of the Arbitration Award dated 23.08.2019.
# 18. Admittedly, the Corporate Debtor has raised dispute over the claim of the applicant within 10 days, as prescribed under Section 8 of the Code, vide its reply to the Demand Notice dated 28.01.2021. The Corporate Debtor in paragraphs 10,11,12 and 13 of the reply to the demand notice, has referred to the Arbitration Proceedings and claimed pre-existing dispute. Further, we notice that the applicant itself had initiated the Arbitration Proceeding to resolve the dispute relating to its claim, which resulted in dismissal of the claim being premature.
# 19. Here it is worthwhile to refer to the Para-40 of the Judgement dated 21.09.2017 in the matter of Mobilox Innovations Private Limited V/s. Kirusa Software Private Limited in Civil Appeal No. 9405 of 2017, wherein the Hon'ble Supreme Court has observed that:
“40. It is clear, therefore, that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application under Section 9(5)(2)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the "existence” of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the adjudicating authority is to see at this stage is 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. 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.”
# 20. Further, in the case of Transmission Corporation of Andhra Pradesh Limited V/s. Equipment Conductors and Cables Limited - Civil Appeal No. 9597 of 2018, the Hon'ble Supreme Court has observed that:
"15. In a recent judgment of this Court in Mobilox Innovations Private Limited vs. Kirusa Software Private Limited1, this Court has categorically laid down that IBC is not intended to be substitute to a recovery forum. It is also laid down that whenever there is existence of real dispute, the IBC provisions cannot be invoked......”
# 21. We observe that the material on record sufficiently indicates that there has been a pre-existing dispute between the parties prior to issuance of demand notice. Therefore, there being a pre-existing dispute and a situation in which the Applicant itself has referred the dispute to the Arbitration proceeding, which resulted in dismissal of the claim of the Applicant being pre-mature, the applicant has failed to prove that its operational debt is undisputed. In terms of Section 9 (5)(ii)(d) of the IBC, the moment it is established that there is a pre-existing dispute, the Corporate Debtor gets out of the clutches of the IBC.
# 22. In sequel to the above, the Application is DISMISSED.
--------------------------------------------------
No comments:
Post a Comment