Essjay Ericsson Pvt. Ltd vs Frontline (Ncr) Business Solutions ...

IN THE MATTER OF: M/s Essjay Ericsson Pvt. Ltd. ...Appellant Vs. M/s Frontline(NCR) Business Solutions Pvt. Ltd. ...Respondent

Present:

For Appellant: Mr. Partho Bhattacharya, Mr. Anand Kumar Singh, Advocates

For Respondent: Mr. Rajeev Narayan, Advocate

ORDER

(Through Virtual Mode)

17.01.2022: Heard Shri P.Bhattacharya, Learned Counsel appearing for

the Appellant and Shri R. Narayan, Learned Counsel for the Respondent.

2. This appeal has been filed against the order dated 08.06.2021 passed by

the 'Adjudicating Authority' rejecting the application u/s 9 filed by the Appellant

on the ground that there is pre-existing dispute and further the notice which

was served by the 'Operational Creditor' was in form - 3 although it ought to

have been in form - 4.

3. The Appellant, an 'Operational Creditor' was given Purchase Order by the

Respondent (Corporate Debtor) for supply of 'Hybrid Solar Power System, spare

parts of Hybrid Solar Power System for their WiFi Project'. The Corporate

Debtor was awarded contract for supply and installation of commission of 'Wi-Fi Company Appeal (AT) (Ins) No. 936 of 2021

1 Choupal Program Me" in 5000 Gram Panchayats in the State of U.P. at various

locations.

4. The Corporate Debtor was required to install Dual Band wi-fi devices

which included among others installation of Wireless concurrent outdoor Access

Points, various supporting starting equipments were needed by the Respondent

Company.

5. The Purchase Order dated 18.06.2018 was issued for supply of complete

set required various equipments including the battery, solar charge etc. The

stipulated time was 30 days from the date of Purchase Order. The Purchase

Order for 4000 unit was issued on payment of 10% i.e. 26 lacs was also given

as advance.

6. The Corporate Debtor has sent email on 25.07.2018, 03.08.2018,

14.08.2018 bringing it to the notice of the Appellant Company that the material

supplied by them were of inferior quality and the same need to be replaced.

There was delay in supply of the materials. A notice u/s 8 of the IB Code was

issued to the Respondent and thereafter the application u/s 9 was filed in March,

2020.

7. In response to Section 8 notice, reply was filed where dispute was raised

in reply to Section 9 notice also, it was stated that there is a dispute regarding

payment and with regard to which the Appellant was earlier informed.

8. The 'Adjudicating Authority' rejected the application on two grounds (i)

that notice ought to have been in form 4 whereas it was in form - 3 and (ii)

secondly there is pre-existing dispute.

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9. Learned Counsel Shri P.Bhattacharya appearing for the Appellant submits

that the emails which were sent earlier to 03.08.2021 were all complied with and

there was no deficiency after 03.08.2018 and payments were made to the

Appellant after 03.08.2018, details of which has already been brought before the

'Adjudicating Authority' which indicates that no dispute subsisted thereafter.

10. Learned Counsel for the Respondent refuting the submissions contends

that the dispute was very much between the parties regarding the payment. It

is submitted that even the e.mail dated 13.03.2019 sent by the Appellant makes

it clear that they have not supplied the requisite number of sets although billing

invoice was sent for payment of 1,974 complete set. The complete set supplied

were only 1110. The e.mail dated 13.03.2018 was sent by the Appellant which

is also on record of the Adjudicating Authority.

We have considered the submissions of the Learned Counsel for the parties

and perused the records.

11. In so far as the observation of the 'Adjudicating Authority' that notice

ought to have been sent in form 4 and it should not have been sent in form 3.

Hence, there was defect in the notice. We are of the view that the defect in form

of the notice be ignored in the facts of the present case. We, thus proceed to

look into the merits of the matter.

12. The 'Adjudicating Authority' in its judgement has noticed the pre-existing

dispute and in paragraph 33 and 38 has referred to the reply issued by the

Corporate Debtor which is as follows:-

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33. "Here in this case, reply of demand

notice was sent. Of course, it was sent after

ten days. Reason for delay is lockdown

imposed by the Government. We further

notice the reply of the main application has

been filed and the dispute has also been

raised by the Corporate Debtor in both the

reply.

38. We further notice that the email

enclosed by the respondent shows that

respondent has raised the quality of the

goods and that is the reason, the

respondent sent an email on 03/08/2018

to replace all the batteries. Apart of that,

the Corporate Debtor vide email dt.

25/07/2018 also raised about the delayed

delivery, wrong delivery and incomplete

deliver."

13. The 'Adjudicating Authority' ultimately came to the conclusion that there

being pre-existing dispute and notice of dispute has already been issued by the

'Corporate Debtor', it is not a fit case of admitting Section 9 application.

14. The submission of Learned Counsel for the Appellant that there was no

dispute subsisting after 03.08.2018 does not appear to be correct. Admittedly, Company Appeal (AT) (Ins) No. 936 of 2021

4 the bills which were issued to the Corporate Debtor were bills for 1,974 complete

set whereas in the email dated 13.3.2019 which is at page 86 of the paper book,

according to the e.mail sent by the Appellant, complete set with battery were only

1110. This mail is said to be sent by the Appellant with object of reconciliation

of the material sent and receipt. The above is clearly a subject of dispute.

15. We are of the view that no error has been committed by the 'Adjudicating

Authority' taking the view that notice of dispute having been sent, there is pre-

existing dispute prior to the initiation of Section 9 proceedings. We do not find

any error in the judgement of Adjudicating Authority, the appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Dr. Alok Srivastava] Member (Technical)

ss/nn

Company Appeal (AT) (Ins) No. 936 of 2021

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