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Judgment
O R D E R
23.11.2023: Heard learned counsel for the Appellant. This Appeal has been filed against order dated 06.06.2023 by which order the Adjudicating Authority rejected Section 9 application filed by the Appellant. An application under Section 9 was filed by the Appellant claiming amount of Rs.36,55,050/-w.e.f.15.11.2019. The Adjudicating Authority issued notice. The Corporate Debtor appeared and filed reply. The Adjudicating Authority after hearing the parties came to the conclusion that there is a pre-existing dispute between the parties, hence, the application cannot be admitted. Reliance had been placed on the judgment of Hon’ble Supreme Court in “Mobilox Innovations Private Limited vs. Kirusa Software Private Limited”.
Learned counsel for the Appellant challenging the order contends that as per the agreement between the parties the payment were required to be made on stage basis and after completion of first stage, second stage would commence. There is no lapse on the part of the Appellant in providing the designs. It is submitted that although the Demand Notice was replied on 27.12.2019 but the Appellant has filed Rejoinder to the Reply filed in the Section 9 application where all issues were explained.
We have considered the submissions of learned counsel for the Appellant and perused the record.
When the Demand Notice was issued by the Operational Creditor vide communication dated 19.12.2019, the said Demand Notice was promptly replied on 27.12.2019 refuting the claim of the Appellant. It is useful to extract the allegations made in the reply to the Demand Notice from Para 7 to Para 13, which are to the following effect:
“7.It is stated that the further payments were based upon the completion of basic design. However, the equipment arrangement was not done for FBP & coating machine due to technical issue. It is pertinent to note that the said work is part of Basic engineering for which the payments were already made. However, the work could not proceed further due to technical fault at your end and therefore, the further payments were not made.
8.It is stated that through emails dated 25/04/2019; 09/05/2019; 26/04/2019; 30/04/2019; 03/05/2019; 04/05/2019; 06/05/2019 we have sent your company back to back reminders in order to proceed with further work as per schedule. However, there have been no response from your end. Further, through emails we had raised queries towards the technical fault at your company's end which your company just failed to understand and overcome the same. That since, there have been no response from your company end we sent you the detailed email dated 07/05/2019 explaining the details of work pending at your end. However, you have been just given lame excuses for the delay. The said delay was for a period of more than a month. That the said act at your end transpired the in capability in this field.
9.It is stated that since the basic designs were not completed at your end for which the payments were already made. Further, your company just failed to complete the same despite long wait of more than a month for which you made us run from pillar to post. Therefore, we sent you an email dated 31/07/2019 asking for the refund of an amount of Rs. 3,00,000/-paid towards the same. However, your company just failed to return the said amount which were wrongly charged to us. That the said act at your end amounts to wrongful gain to yourself and wrongful losses to our company which is required to be viewed seriously.
10.It is stated that it seems that you approached us with an ulterious motive to deceive and cheat us. That based upon your assurances to be expert in your field we made the advance payments. However, later you made us run from pillar to post for the refund. It is stated that while we were under process of recovering the said advance payments you sent us this demand notice which is not tenable under law.
11.It is pertinent to note that you have not come up with clean hands and your company is trying to take advantage of its own wrong.”
Learned counsel for the Appellant submits that the Reply to the Demand Notice was not correct reply and it was duly explained in the Rejoinder by Corporate Debtor. When we look into the Reply to the Demand Notice, the notice is clearly notice of dispute. When the Corporate Debtor immediately after first design was submitted said that it was not complete and refund of Rs.3 Lakhs was claimed, the dispute was raised immediately after 31.07.2019, which was much prior to the Demand Notice. The averments made in the Reply to Demand Notice clearly indicate that dispute was raised which cannot be a moonshine or not supported by any material. We are of the view that the Adjudicating Authority did not commit any error in rejecting Section 9 application on the ground of pre-existing dispute. There is no merit in the Appeal. Appeal is dismissed.