F.M.T.Engineers Private Limited vs Raj Kesari Rocks Private Limited

IN THE MATTER OF: F.M.T. Engineers Pvt. Ltd. ...Appellant

Versus

Raj Kesari Rocks Pvt. Ltd. ...Respondent

Present: For Appellant : Mr. Pawaneet Singh Dindra, Sr. Advocate with Mr. Ketan Madan, Mr. Utkarsh Singh, Advocates. For Respondent : Mr. Sanyam Jain, Advocate.

ORDER

(Hybrid Mode)

27.01.2026: Heard learned counsel for the Appellant. This appeal has

been filed against the order passed by the Adjudicating Authority rejecting

Section 9 application. Appellant was awarded work by the Corporate Debtor

for completing PEB structure. The structure was to be completed by June,

2022. There was delay and it was completed in January, 2023. Appellant

claiming outstanding amount issued a demand notice to the Corporate Debtor

on 15.01.2024 demanding an amount of Rs.1,31,5221/-. The demand notice

was replied on 16.02.2024 giving detailed plea as to how demand is

unsubstantiated. In Para 2 of the reply, from (a) to (t), in several sub-paras

detailed reasons for not accepting the claim are given. One reason given in

Para 2 (m) is that under protest an amount of Rs.1,45,34,930/- was paid in

December, 2022 and in Para 2(q), it was stated that

settlement/understanding took place between the parties on 11.08.2023,

hence, there was pre-existing dispute. The Adjudicating Authority heard both the parties by the impugned order dated 07.10.2025 rejected Section 9

application on the ground that there is pre-existing dispute. Challenging the

said order this appeal has been filed.

2. Learned counsel for the Appellant submits that even though the

erection of shed without prejudice was done with delay that shall not affect

the entitlement of the Appellant to receive amount. It is submitted the

settlement dated 11.08.2023, which is a one-page handwritten paper filed by

the Corporate Debtor cannot be treated as any settlement between the parties

and there was no pre-existing dispute. Several emails were sent by the

Appellant demanding the amount, which was not denied by the Corporate

Debtor.

3. We have considered the submissions of learned counsel for the

Appellant and perused the record.

4. In the present case, demand notice was issued on 15.01.2024

demanding an amount of Rs.1,31,5221/-. Immediately after receipt of the

demand notice on 03.02.2024, by reply dated 16.02.2024 the Corporate

Debtor refuted the claim and gave detailed reasons in Para 3 denying the

claim. It is useful to notice some of the sub-paras of Para 2, which are 2(j),

(m), (n) and (q), which are as follows:

"j. Thereafter, our Clients followed up with your Client to ensure timely delivery and erection of the shed (PEB structure) as delay of every single day was incurring huge losses/ damages to our Clients then only in the month of January 2023 i.e., after a delay of over 6

Company Appeal (AT) (Ins.) No. 1962 of 2025 2 of 6 months, your Client provided us with the shed (PEB structure) that too incomplete and without providing receipt with respect to the weight of the material supplied.

m. Being completely unsatisfied with the quality of goods and service provided by your Client, our Clients immediately raised grievance with your Client, however the same was turned to deaf ears. Albeit, our Clients have already suffered immense losses owing to your Client's non-performance, to salvage the machinery and the project, the Company paid an amount of Rs. 1,45,34,930/- (Rupees One Crore Forty- Five Lakhs Thirty-Four Thousand Nine Hundred and Thirty only) to your Client towards provision of the shed (PEB structure) in the month of December 2022, under protest.

n. Our Client further states that as per the terms agreed between the parties, in case of any reduction in the rates of raw material (i.e., iron), commensurate benefit in the prices was to be given to our Clients and vice versa. Notably, before the supply itself, the rates of raw material (i.e., iron) reduced by approx. Rs. 10,000 per MT and our Clients requested your Client to pass on the benefit of the reduced rates however the same was not done and your Client unjustly enriched itself for an amount of Rs. 60,00,000/- (Rupees Sixty Lakhs only) to the detriment of our Clients.

q. Shocked at such discrepancies in the invoices and conduct of your Client, in July 2023, the Company informed that it would terminate the relationship with your Client and /or initiate any legal action against

Company Appeal (AT) (Ins.) No. 1962 of 2025 3 of 6 your Client for their conduct. However, your Client beseeched our Clients to not terminate the purchase order and/or initiate any legal action against your Client. In view of the long standing relationship between the parties, our Clients agreed to such request and a settlement/understanding dated 11th August 2023 was agreed between the parties wherein under it was broadly agreed that:

i. Your Client will cure all defects in the goods supplied in lieu of which an amount of Rs. 80,00,000/- (Rupees Eighty lakhs only) as full and final settlement, will be paid by the Company to your Client within a period of six (6) months starting from November 2023, subject to deductions of amounts payable by your Client as stated below;

ii. Your Client was to provide benefit of the reduced price of raw material (iron) to the tune of Rs. 60,00,000/- (Rupees Sixty Lakhs only) after providing proper weight receipts in respect of the shed (PEB structure) supplied;

ⅲ. Your Client was to make payment of Rs. 19,48,468/- (Rupees Nineteen Lakhs Forty Eight Thousand Four Hundred and Sixty Eight only) in consideration of the welding electrodes supplied by the Company's sister concern- Raj Kesari Electrodes Pvt. Ltd.

iv. Your Client was to make payment of Rs. 6,17,447/- (Rupees Six Lakhs Seventeen Thousand Four Hundred and Forty Seven only) for the extra material supplied by your Client and duly returned

Company Appeal (AT) (Ins.) No. 1962 of 2025 4 of 6 to them vide debit note dated 16th October 2023 bearing No. RKR/ 2324/018/DN.

v. Your Client was to make payment of Rs. 46,17,104/- (Rupees Forty Six Lakhs Seventeen Thousand One Hundred and Four only) towards the fictitious invoice raised without there being any order placed and/or supply of goods to our Clients."

5. The submission of the Appellant that there was no pre-existing dispute

need to be considered. The demand notice was immediately replied by a

detailed reply, which is clear notice of dispute under Section 8 and 9. Under

Section 9(5)(ii)(a) when a notice of dispute has been given, the Adjudicating

Authority has not to admit Section 9 application. The notice of dispute gives

in detail reasons as to why the claim is refuted. The work has to be completed

by June, 2022 as per the contract between the parties, however, as per the

Corporate Debtor, the work could be completed in January, 2023, which was

also incomplete. Corporate Debtor claimed to have given payment of

Rs.1,45,34,930/- under protest in December, 2022 and has come up with the

case that there was settlement between the parties on 11.08.2023., which

settlement has been pleaded in Para 2(q) of the reply to the demand notice.

The copy of the settlement has also been brought on the record by the

Corporate Debtor in the reply, which is referred to in the reply, which is at

page 744 of the appeal paper book. The settlement is not being accepted by

the Appellant and it is submitted that the terms are not clear as to who has

to pay what amount and according to the Appellant this document is a forged

document. When the notice of dispute dated 16.02.2024 was given giving

Company Appeal (AT) (Ins.) No. 1962 of 2025 5 of 6 details with regard to contract and subsequent execution of settlement

between the parties, few of the paras we have already noticed, we are of the

view that pre-existing dispute is reflected and the Adjudicating Authority has

rightly come to the conclusion that there is a pre-existing dispute. We fully

concur with the view of the Adjudicating Authority. We dismiss the appeal,

however, it shall be open for the Appellant to claim such amount, if any,

recoverable from the Corporate Debtor, before appropraite forum in

accordance with law.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) Archana/md

Company Appeal (AT) (Ins.) No. 1962 of 2025 6 of 6