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Judgment
O R D E R
02.08.2023: Heard Learned Counsel for the Appellant.
This Appeal has been filed against the Order dated 29.05.2023 passed by the Adjudicating Authority rejecting Section 9 Application filed by the Appellant on the ground that there are pre-existing disputes between the parties.
The Appellant is an Operational Creditor who has entered into a contract regarding service agreement for warehouse on 29.08.2019. The Appellant gave a Demand Notice under Section 8 on 07th December, 2021 and thereafter filed the Application under Section 9 claiming a total amount of Rs. 8,28,86,046/-. The Reply was filed by the Corporate Debtor raising various pleas and denying the claim of the Appellant. The Adjudicating Authority returned a finding that there is sufficient material on record to show pre-existing disputes on which ground the Adjudicating Authority dismissed the Section 9 Application.
Learned Counsel for the Appellant challenging the Order contends that there was no pre-existing dispute between the parties and he has referred to email dated 16th March, 2021, Email dated 12th November, 2020 and 19th January, 2021. He submits that agreement was never terminated by the Respondent as per the terms of the agreement. Learned Counsel for the Appellant further submits that the proposal of the Corporate Debtor for premature termination was rejected by email dated 21st April, 2021.
We have considered the submissions of the Appellant and perused the record.
The Adjudicating Authority in the Impugned Order has in detail in paragraph 7.5 referred to correspondence especially email sent by the Corporate Debtor and has returned a finding in paragraph 7.6, 7.7, 7.10, 7.12 which is to the following effect:
“7.6The correspondence mentioned above overwhelmingly establishes severe disputes between the parties inter-se, with each party having claims/counter-claims against the other.
7.7.In view of the unilateral blockage of dispatches of inventory pointed out by the Respondent and refusal on the part of the Applicant to rectify the same, it was agreed between the parties to terminate the agreement in December, 2020 itself and consequently, steps were taken by both parties to mitigate their losses. (Annexure 19 on Page No. 167 to 170 of Reply). …
7.10.In the meanwhile due to the deficiency in service on the part of Applicant, the Respondent removed its inventory and vacated the warehouse in January 2021 and the said fact is not disputed by the Applicant. …..
7.12The Applicant did not dispute any of the deficiencies with justifiable reasons but also admitted that an amount of Rs. 41,98,073/- was due and payable by the Applicant to the Respondent on account of such deficiencies by email dated May 13, 2021.”
The Adjudicating Authority being satisfied that there was pre-existing dispute between the parties which is apparent from correspondence between the parties, we find no error in the order of the Adjudicating Authority rejecting Section 9 Application. The Appellant submits that he was entitled for at least fix charges. This is the question which requires adjudication and for which Appellant is at liberty to take appropriate proceeding as per agreement between the parties for dues, if any.
With these observations, we dismiss the Appeal.