Single Whatsapp Message Raising General Dispute Can’t Become Foundation To Reject Petition U/S 9 Of IBC: NCLAT
The Nationwide Firm Legislation Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held {that a} single WhatsApp message despatched way back can not serve as the muse to dispute a whole sequence of transactions, particularly when no particular invoices—forming the muse of the petition below Part 9 of the Code—have been contested. Subsequently, the petition can’t be rejected solely on the bottom of a pre-existing dispute primarily based on such a message.
Transient Details:
The current attraction has been filed by the Appellant towards an order handed by the Adjudicating Authority by which a petition below part 9 of the Insolvency and Chapter Code, 2016 (“Code”) was dismissed.
A Petition below Part 9 of the Code, was filed for initiation of the Company Insolvency Decision Course of (“CIRP”) towards the Respondent, on account of the Respondent’s failure to pay the excellent operational debt amounting to Rs. 1,36,06,646.70.
The Appellant submitted that no discover of dispute, both with regard to the standard of the merchandise or the bill quantities, was raised by the Respondent inside the stipulated interval as per the invoices or at any subsequent time. No legitimate or particular dispute has ever been raised by the Respondent regarding any explicit product or bill.
It was additional submitted that the Respondent didn’t specify the actual invoices towards which the mentioned funds have been made. In the absence of any such communication or intimation, the funds have been handled as advert hoc funds in direction of the whole excellent legal responsibility.
It was additional submitted that the Adjudicating Authority erred in discrediting the invoices raised by the Appellant on the bottom of declare of non-delivery of products raised by the Respondent which is an unsubstantiated defence because the Respondent has already claimed Enter Tax Credit score for all invoices raised by the Appellant.
It was additional submitted that the Adjudicating Authority has failed to understand that the Respondent didn’t increase any objection to the ledger of the Appellant in its reply to the Demand Discover issued below Part 8 of the Code, and due to this fact couldn’t have belatedly raised such a difficulty on the stage of reply to the Insolvency Petition.
It was additionally argued that the Respondent has merely made a normal and unsubstantiated assertion concerning the alleged unsatisfactory high quality of products, making an attempt to set up a frivolous dispute by way of a WhatsApp message that’s imprecise and does not specify the precise bill or product to which the purported dispute pertains.
Per contra, the Respondent submitted that the Appellant has failed to supply any proof of provide in help of its claims for cost in its Part 9 utility. Moreover, in instances the place items have been equipped, some consignments have been discovered to be faulty, as demonstrated by the Respondent’s High quality Check Experiences, and due to this fact, the Appellant shouldn’t be entitled to cost for such faulty items.
It was additional submitted that the company debtor despatched a reply to the demand discover issued by the Appellant in which a dispute concerning provide of products was raised for which an arbitration had already been initiated by the Appellant. Regardless of this, the Appellant proceeded to file the petition below part 9 of the Code that’s towards the settled precept that an insolvency petition can’t be filed when a real pre-existing dispute exists or is pending.
Lastly, it was submitted that the GSTR-1 that must be filed is a statutory requirement which can’t be thought of as an admission of legal responsibility or acknowledgement of a authorized relationship between the events.
Observations:
The Tribunal famous that the default quantity that has been claimed within the petition is 1,36,06,646.70 excluding 24% curiosity. Moreover, the demand discover that was issued below part 8 of the Code was supported by three paperwork similar to ledger accounts as much as 31.03.2023, a affirmation e mail despatched by the company debtor on 23.06.2022 and pending tax invoices.
It additional noticed that every one these paperwork clearly set up the operational debt and its default. In a reply given by the company debtor to the demand discover, no reference was made to the three disputed invoices. The reply that was given was very imprecise in nature and merely said that since arbitration proceedings had been initiated by the Appellant, the petition must be dismissed on the bottom of a being a pre-existing dispute between the events.
The Tribunal relied on the Supreme Courtroom judgment in Vidarbha Industries Energy Restricted vs. Axis Financial institution Restricted the place it was held that monetary solvency of the corporate will be thought of whereas deciding an insolvency utility below the code and the appliance will be rejected if the solvency of the corporate is established. Nevertheless, within the current case, the ideas laid down by the Supreme Courtroom weren’t correctly utilized to the info of the case thereby rendering the impugned order non-speaking and unsustainable.
In gentle of the above dialogue, the Tribunal held that the debt and default are clearly established within the current case and the debt has additionally been acknowledged within the ledger accounts. That is additional fortified by the truth that each events have accounted for GST advantages primarily based on items which have been equipped by the Appellant to the Respondent.
The Supreme Courtroom in Mobilox Improvements Pvt. Ltd. Vs. Kirusa Software program Pvt. Ltd. held that the Adjudicating Authority shouldn’t be empowered to adjudicate the dispute raised by the Company Debtor below the code. Nevertheless, the dispute raised have to be a real one and should not be a mere moonshine defence. Based mostly on the above, it held that the demand discover issued by the Appellant indicated a transparent quantity of default which the Respondent did not deny or discuss with any particular invoices.
The Tribunal additional held that the Whatsapp Message which is introduced a document of pre-existing dispute vaguely refers to dispute in 2018 and fails to discuss with any particular bill or the quantity which have been questioned within the message.This Whatsapp message pertain to interval 2018 which can not create a basis for treating complete sequence of transactions as pre-existing disputes.
Accordingly, the current attraction was allowed and the impugned order was put aside.
Case Title: Mrs. Leena Salot Versus Ridham Synthetics Personal Restricted
Case Quantity:Comp. App. (AT) (Ins) No. 375 of 2024 & I.A. No. 1278 of 2024
Judgment Date: 03/07/2025
For Appellants: Mr. Sandeep Bajaj, Mr. Mayank Biyani, Mr. Ashish O. Lalpuria, Mr. Gaurav Gdodia, Advocates.
For Respondents: Mr. Arnav Kumar & Ms. Gitanjali Vohra, Advocates.
