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Judgment
O R D E R
12.04.2023: Heard learned Counsel for the parties.
This is an appeal against the order passed by the Adjudicating Authority (NCLT Guwahati) dated 20.01.2023 by which Section 9 application has been rejected on the ground of pre-existing dispute. The Appellant was given a Work Order by Corporate Debtor for providing services. In pursuance of the Work Order, the Appellant continued to work. Subsequently, the Work Order was terminated by the Appellant itself. According to the Appellant, certain dues are still there with the Corporate Debtor for which reconciliation also took place in June and July, 2021 and when the payment was not made, Notice under Section 8 IBC was issued on 18.04.2022 and thereafter Section 9 (IBC) Application was made.
Learned Counsel for the Appellant submits that when reconciliation was done, total amount of Rs. 5,66,49,015/-was found due, there is no occasion for accepting of any pre-existing dispute and the Adjudicating Authority ought not to have rejected the application.
We have considered the submission of the learned Counsel for the Appellant and perused the records. The Demand Notice issued by the Appellant was duly replied by the Corporate Debtor, copy of which Reply has been brought on record at page 349 of the Appeal Paper Book. The Reply raises a dispute and it is the Notice of dispute given by the Corporate Debtor. We have looked into the Notice of dispute in which paragraphs 4,5 & 6 following have been stated:
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“4.We further state that the alleged reconciliation of accounts relied upon in the demand notice, are false and baseless without any supportive materials in respect of the entries therein. And further JUD Cements Ltd have never accepted any reconciliation of accounts with Laxyo Energy Limited.
5.We, on the contrary, state that pursuant to the Work Order contract dated 12.10.2020 vide which Laxyo Energy Limited was given the contract of Operation and Management of the cement plant of JUD Cements Limited, had inherently breached vital terms by not yielding to the desired quantity of production of cements as stipulated therein. Further Laxyo Energy Limited in the process of performances of the contractual obligations has caused severe damages to the machineries installed in the cement plant, whereby resulting in huge loss for the JUD Cements Limited and for which we (JUD Cements Limited) is entitled lay a claim against Laxyo Energy Limited for damages and we are positively in the process to do so.
6.And we further state that as per the current status of Ledger statements maintained at the JUD Cement Limited, we have a claim for a sum of Rs. 1,88,26,942.60/- (Rupees One Crore Eighty Eight Lakhs Twenty Six Thousand Nine Hundred Forty Two and Sixty Paisa Only) against Laxyo Energy Limited.”
The submission of the Appellant is that there was reconciliatry, which fact has also noted by the Adjudicating Authority in the impugned order, the reconciliation, prior to the Demand Notice indicates the existence of pre-existence of dispute between the parties. Furthermore, when Notice under Section 8 IBC was replied and the claim was disputed in accordance with the Scheme of IB Code, the Section 9 Application cannot proceed unless it is held that the defence raised was a moon-shine dispute. The Work Order which was issued, whose period had still not expired, and was terminated by the Appellant itself indicates that there has been dispute between the parties. Furthermore, when the Notice of dispute was given by the Corporate Debtor where allegations have been made denying the reconciliation and claiming certain amounts due on the Operational Creditor itself, the dispute cannot be said to be moon-shine dispute and the Adjudicating Authority did not commit any error in rejecting Section 9 Application.
We do not find any error in the Impugned order. The Appeal is dismissed.