Birkan Engineering Industries Private Limited vs VJE India Private Limited

Dr. P.S.N. Prasad, J

M/S. Birkan Engineering Industries Private Limited, claiming as the operational creditor, has filed the instant application under section 9 of the insolvency and Bankruptcy Code, 2016 (for brevity 'the code') read with rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 with a prayer to trigger Corporate Insolvency Resolution Process in respect of respondent Company M/S. VJE India Private Limited referred to as the corporate debtor.

It is the case of the applicant that That the operational creditor is a private limited company which is registered under the provision of Indian Company Act has filed present application through its Authorised Representative namely Sh. Mohit Sharma, who is working as marketing manager.

It is submitted that the operational creditor as per the description of oral purchase order, direction & instruction of the corporate debtor had supplied the toughened glass etc. to corporate debtor as per the specification, direction, instruction by the corporate debtor through transport in which various Sale invoice has been generated against corporate debtor, which are as follows:

Therefore, the operational creditor had supplied the toughened glass to corporate debtor in the financial year 2017-2018 in terms of money is Rs. 8,39,654/- (Rupees Eight Lac Thirty Nine Thousand Six Hundred fifty Four Only).

The corporate debtor for discharge of their legally debt liability had paid part payment of Rs. 5,73,265/- (Five Lac Seventy Three Thousand Two Hundred Sixty Five Only) to the operational creditor in financial year 2017-2018, and the balance due was Rs. 2,66,389/- in financial year 2017-2018, thereafter the corporate debtor also purchased toughened glass in financial year 2018-2019 is Rs. 2,83,826/- and the corporate debtor for discharge of their liability had paid part payment for this Financial year 2018-2019. That at present account of the corporate debtor has been debited with Rs. 4,11,106/-. That the goods had been received & acknowledged by the corporate debtor by giving cheques to operational creditor. That for discharge of their legally debt liability of Rs. 4,11,106/-the corporate debtor had issued five cheques total of Rs. 5,00,000/- in favour of operational creditor. The true copy of the cheques are annexed herewith as Annexure-5. That operational creditor as per instruction given by the corporate debtor had deposited the said cheques in its bank account but all the said were dishonoured with the remark "PAYMENT STOPPED BY DRAWER" on various dated i.e., 25.02.2019, 26.02.2019 and 27.02.2019.

That corporate debtor after receiving the consignment/goods have never served any rejection notice of consignment/goods to operational creditor and the corporate debtor have used and appropriated the goods and this clearly proves that the goods were sent to corporate debtor as per their orders, demands, directions and satisfaction.

That operational creditor had supplied the goods to corporate debtor as per the satisfaction, demands, orders and desire of corporate debtor. The corporate debtor is under a contractual and legal obligation to pay the aforesaid amount to operational creditor.

That when the corporate debtor despite of repetitive requests, demands and personal visits and reminders did not make the payment to operational creditor then the operational creditor had sent the legal demand notice under Section 8(1) of Insolvency & Bankruptcy Code dated 25.03.2019 through registered post upon the corporate debtor and calling upon the corporate debtor to pay a sum of Rs. 4,11,106/-. That the corporate debtor had received the legal notice on dated 25.03.2019 via their e-mail i.d. i.e., hr@zharokha.com & also jainamit_dc@yahoo.com.

The respondent corporate debtor has filed its reply and raised objection against the admission of the present application on the basis of deficiency and delay in the providing goods and breach of obligations by the applicant.

The goods supplied by the petitioners were incomplete and were of wrong sizes and the services provided by the petitioners were deficient due to which the respondent could not dispatch the materials/orders to his end clients, thereby adversely affecting the business, reputation and clientele of our client. That the respondent had also intimated the petitioners regarding said unprofessional approach and deficiency of the petitioners vide various e-mails dated 29.03.2019, 09.04.2019, 10.04.2019, 01.05.2018, 26.05.2018.

It is also submitted that the present application under Section 9 of the IBC Code 2016 is incomplete, as it is filed without complying with compliances under Section 9 of the IBC Code, 2016 despite directions and multiple orders of the Hon'ble Bench. That the Hon'ble Bench vide its multiple orders had already given the time to furnish the said certificate on multiple occasions, but the counsel failed to furnish the said certificate, annex copy of the said certificates as required u/s 9(3)(c) of the Code, therefore this petition is liable to be dismissed.

It is further submitted that the respondent Corporate-debtor has specifically pointed out the material disputes among the parties in the Notice of Dispute issued under Section 8(2) of the Insolvency and Bankruptcy Code, 2016.

Heard the Ld. Counsels for both the parties and perused the case records.

There is no dispute that the emails were sent by the respondent and issues were raised regarding goods provided by applicant to respondent. It is seen that the claim of the applicant has not been admitted by the respondent but has been disputed with sufficient particulars. This fact is not disputed by the applicant that issues/ complaints were raised by respondent about deficiencies in services.

It is pertinent to state here that this is not the forum to examine and adjudicate as to which portion of the claims are admissible. Tribunal will is not expected to examine the relative merits of dispute. It is beyond the scope of this forum to decide as to which party and to what extent is responsible to pay amounts, when there is a serious allegation of fabrication and misrepresentation. There is material to believe that disputes certainly exist in the facts of the present case and it is right to have the matter tried out before the axe, in the form of Corporate Insolvency Resolution Process, falls.

In respect of definition of "dispute" in the Code Hon'ble Supreme Court has held in the case of Mobilox Innovative Pvt. Ltd. Vs. Kirusa Software Pvt. Ltd. in civil appeal No. 9405 of 2017 vide order dt. 21.09.2017 inter-alia that:

"Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which required 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 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, "(emphasis given).

In the factual background as discussed above, there has been no admission of operational debt by the respondent. In fact, there has been a dispute regarding bills raised and services provided by the applicant.

Dispute existed much prior to the issuance of notice under Section 8 of the Code as there are various issued were raised in respect of goods provided by applicant to the respondent. The claim of pre-existing dispute suggests the need of elaborate investigation. It is reiterated that existence of dispute in the present case cannot be ruled out.

As discussed above the respondent has raised dispute with sufficient particulars. Hence, the amount of claim raised by the applicant clearly falls within the ambit of disputed claim. Section 9(5)(ii)(d) of the Code provides that adjudicating authority shall reject the application if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility.

For the reasons stated above this petition fails and the same is rejected.

We make it clear that any observations made in this order shall not be construed as an expression of opinion on the merit of the controversy and the right of the Applicants before any other forum shall not be prejudiced on account of dismissal of instant application.

Serve copy of the order to the parties and consign the case records to the record room.