AI Structured Summary
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Judgment
Financial Year,"Amount decided for
setting off the credit
notes (Rs.)
2015-16,"8,86,67,626/-
2016-17,"8,20,00,000/-
2017-18,"7,80,00,000/-
Total Amount,"24,86,67,626/-
SMW Metal Pvt. Ltd.,
It is not disputed that the first tranche of the credit notes for Rs. 8,86,67,626/- was adjusted in the year 2014-15. The dissension arose when SMW",
rescinded its agreement, the indemnity bond notwithstanding. It is their case that the said Credit Notes were in the nature of discount/benefit offered",
by SMW to Indo for subsequent purchases, at competitive rates vis-Ã -vis market rates, as a special offer, keeping in view their long-standing",
business relationship. The aforesaid Credit Notes were never issued by SMW against any outstanding amount due or payable by SMW to Indo. As,
per their case, it was duly conveyed by SMW that only on their request regarding the adjustment, the amount under the Credit Notes would be set off",
against substantial quantities of Products to be purchased by Indo from SMW in 3 financial years 2015-16, 2016-17 and 2017-18. Pursuant to such",
understanding, SMW and Indo calculated the outstanding amount of Rs. 2,46,34,100- as due to SMW as on December 31, 2015 taking the Credit",
Notes into account. SMW's stand has consistently been that inspite of the discount/benefits offered to Indo in the form of Credit Notes (discount on,
subsequent purchase of products), it has failed to honour its commitment towards purchasing substantial quantities of Products from SMW.",
As this MoU executed between the parties was accompanied by an Indemnity Bond saying that the same was interminable, the grievance of Indo",
is that despite the aforesaid settlement and commitment that the terms would not be violated, SMW has terminated the settlement between the parties",
and refused to honour the credit notes for the years 2016-17, 2017-18. It is on the basis of these credit notes that the Indo seeks initiation of the",
Corporate Insolvency Resolution Process of SMW while SMW disputes this liability on grounds that these credit notes were given by way of a,
discount to Indo for future purchases. As Indo had failed to place adequate orders, they were constrained to terminate the MoU. It has consistently",
.been their case that the credit notes were given not on against of any outstanding liability, but by way of concession for future transactions. In fact,",
they have to recover Rs. 2,46,34,100/- which they have now claimed in their counter petition.",
On the basis of the averments made in both the cross petitions it is noted that replies to the demand notices had been duly replied to by the,
respective Corporate Debtors disputing the claim. What is evidenced is the fact that the dispute is contested and has been an existence prior to the,
filing of the case. It is beyond the scope and jurisdiction of this Bench to adjudicate or quantify the liability against each Corporate Debtor which can,
only be adjudicated upon the touch stone of trial, looking into invoices and the qualitative value of the terms of settlement upon reconciliation of",
accounts.,
In the facts and circumstances of the case, this Bench is of the opinion that clearly a dispute is raised by both the parties in their counter petitions.",
Under such circumstances, resolution of either Corporate Debtor is not sustainable. Both petitions are being rejected on this ground. It would also be",
relevant to note that the parties have not categorically deposed that no dispute exist between them.,
Both the petitions (IB)-552(ND)/2017, (IB)-553(ND)/2017 are rejected.",