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Judgment
Ina Malhotra, J
The present petition has been filed praying for initiation of the Corporate Insolvency Resolution Process against the respondent-corporate debtor. The petitioner has claimed an outstanding liability of Rs. 14,89,967/- including retention amount of Rs. 6,74,247/from the Corporate Debtor. Despite repeated requests and reminders, the Corporate Debtor has failed to liquidated this liability. In view of the same, the Operational Creditor seek initiation of Insolvency Resolution process of the Corporate Debtor.
As per the averments, the petitioner is engaged in the business of civil work, carrying out structural work for all types of buildings and water treatment plants, besides other civil construction and has catered to a vast and diverse clientele all over India and globally. It is submitted that the Corporate Debtor approached the operational creditor for availing its services and work orders dated 04.10.2011 and 14.10.2013 were issued for Rs. 47,50,000/- and Rs. 2,07,00,000/- respectively. The Operational Creditor raised invoices and maintained a running account with the corporate debtor. Partial payments were received from the Corporate Debtor from time to time, and post adjustment, an amount of Rs. 8,15,720 is stated to be due for payment. The retention amount of Rs. 6,96,455/- is also due from the corporate debtor.
Upon the Demand notice dated 28.11.2018 being issued u/s 8 of the Code, the Corporate Debtor sent a reply, refuting any liability to pay.
The petition has been filed in the required format duly complying with the requirements under the Code.
The Corporate Debtor on being served in this case has filed its reply. It is their case that the contents of the petition are wrong as a full and final settlement had already taken place between the parties on 07.10.2015. The question of any further claim therefore did not arise. It is also their case that the retention money of Rs. 6,74,247/-had been adjusted on account of defects in the work carried out under the defect liability period. This was duly intimated to the operational Creditor as is evident from their following communication dated 23rd January 2016.
Arunkumarsharmaarunkcpl2009@gmail.com
To:asachdevasachdev@thelalit.com
CC:cmdofficecmdoffice@thelalit.com
Sir
I was shocked to hear that my entire retention money of Rs. 6,96,455/- has been adjusted for unknown reasons, After talking to Mr. Ravi Gupta today on Phone. This joke is very cruel and am still feeling uncomfortable.
You are requested to kindly release the same at the earliest and oblige me
You are also requested to kindly direct him not to repeat the same again.
Thanking you and Regards Arun Kumar Sharma
The Corporate Debtor's is main resistance is founded on the Letter dated 07.10.2015 being a "Letter of Full and Final Settlement" issued by the Operational Creditor itself against all the work done for them. It is pointed out that the Operational Creditor has deliberately concealed this vital document. This letter which is reproduced below, therefore demolishes any claim made by the Operational Creditor.
To
Financial Controller
M/s. Bharat Hotels Limited
Barakhamba Road
New Delhi-110001
FULL AND FINAL LETTER
Sub- Full and Final Settlement against All the works done at The Lalit New Delhi
Ref: All the orders issued for New Delhi Hotel till date for Civil, Renovation, Dismantling etc Works executed at Hotel The Lalit New Delhi
Dear Sir,
With reference to our final bills certification for All the works done by us at your New Delhi Hotel till date
We have completed All the works successfully in your "Hotel The Lalit New Delhi" at New Delhi against All the work orders referred above and also accepted for the last payment against 5th And final Bill for STP work and accepted for a full and final value for Rs. 1,21,73,542 exclusive of vat, Service tax, as applicable(subject to the receiving of final payment against current bill)
On receipt of the payment against the bill, our entire account stands settled in full and final for All the orders and we have no claim of whatsoever nature outstanding against the company. We further confirm that we will not raise any claim at any time in future against the Company for All the works carried out by us at "Hotel The Lalit New Delhi" except Retention Money amount (if deduced).
Yours Faithfully,
For M/s. Kuntal Construction Pvt. Ltd
It is noticed that pursuant to the final settlement in terms of letter dated 07.10.2015, no further correspondence was made agitating the same or reminding the Corporate Debtor that the agreed amount was not remitted.
In view of the aforesaid facts, this bench has observed that there is an existence of a prior dispute. Whether full and final Settlement of the claim was made or not or whether the respondent was entitled to adjust the retention amount are disputed question of facts. The Corporate Debtor, prima facie has been able to corroborate the existence of a prior dispute which the petitioner had withheld. The factum of the retention amount being adjusted was also within the knowledge of the petitioner and therefore amounts to a prior dispute.
The right to recover the retention money or any further outstanding liability being a contentious issue cannot be decided by this Bench in a Resolution petition.
In view of pre existing dispute resolution cannot be permitted. Prayer for initiating CIR of the Respondent stands rejected. File be consigned to the Record Room.