Jindal Steel & Power Ltd vs Mittal Corp. Ltd

IN THE MATTER OF: Jindal Steel & Power Ltd. .....Appellant Vs. Mittal Corporation Limited ......Respondent

Present : For Appellant: Mr. Anshuman Sharma, Ms. Priyal Chaturvedi, Mr. Vishesh Dhundia, Advocates

For Respondents: Mr. Virender Ganda, Senior Advocate with Mr. Hitesh Sachar, Ms. Namita Jose, Mr. Anand Singh Sengar, Advocates

16.05.2019 - The Appellant - 'Jindal Steels & Power Ltd.' filed an

application u/s 9 of the Insolvency & Bankruptcy Code, 2016 ('I&B' Code, for

short) against Mittal Corporation Limited. By impugned order dated 31st August,

2018, the Adjudicating Authority (National Company Law Tribunal), Mumbai

Bench, dismissed the application on the ground of 'pre-existing dispute'.

2. Learned Counsel appearing on behalf of the Appellant submits that the

Respondent by letter dated 30th November, 2016 raised frivolous disputes

although they have admitted about receipt of goods and non-payment of dues. 2

3. Referring to the said letter dated 30th November, 2016, it is submitted that

the Respondents having received the goods and consumed at the agreed rate

there arises no question of dispute or controversy and sale price being a debt is

payable for which Respondent defaulted.

4. According to learned counsel for the Appellant, the Adjudicating Authority

travelled beyond the scope of Insolvency & Bankruptcy Code ('I&B' Code), 2016

and engaged into fact finding on the conduct of third parties which cannot be

taken into consideration in the present application which was filed u/s 9 of the

Insolvency & Bankruptcy Code ('I&B' Code), 2016. The Respondent having

received and consumed the goods for default it was incumbent on the

Adjudicating Authority to admit the application.

5. Learned Counsel appearing on behalf of the Respondent also referred to

the letter dated 30th November, 2016 to suggest pre-existing dispute.

6. It is further submitted that the MS Billets were supplied in much higher

price than the original price as was offered. It is also alleged that delay in supply

of materials took place because of non-compliance of various provisions by the

Appellant due to which the Respondent suffered and has raised counter claim.

7. We have heard the parties and perused the records. Admittedly the

Demand Notice u/s 8(1) Insolvency & Bankruptcy Code ('I&B' Code), 2016 was

issued on 13th September, 2017.

Company Appeal (AT)(Insolvency) No. 638 of 2018 3

8. From the record, we find that much prior to issuance of Demand Notice,

the correspondence was going on relating to outstanding amount in terms of

purchase order dated 7th March, 2016 as was amended on 12th March, 2016.

9. Pursuant to a notice of Appellant through the Lawyer's Office, the Advocate

for the Respondent ('Corporate Debtor') raised dispute by letter dated 30th

November, 2016 which reads as follows:-

Company Appeal (AT)(Insolvency) No. 638 of 2018 4

Company Appeal (AT)(Insolvency) No. 638 of 2018 5

Company Appeal (AT)(Insolvency) No. 638 of 2018 6

Company Appeal (AT)(Insolvency) No. 638 of 2018 7

Company Appeal (AT)(Insolvency) No. 638 of 2018 8

Company Appeal (AT)(Insolvency) No. 638 of 2018 9

10. After hearing the parties and going through record, we find that there is a

pre-existing dispute with regard to price of the goods which was increased and

due to failure of negotiation on the part of the Appellant, the Respondent suffered

loss, as alleged.

11. Learned counsel for the Appellant submitted that in terms of the

amendment in purchase order, there is no dispute but we find that the Lawyer's

Notice dated 30th November, 2016 has also dealt with the amended Purchase

Order dated 12th March, 2016.

12. As all the aforesaid disputes cannot be decided by the Adjudicating

Authority or this Appellate Tribunal, with regard to pre-existing dispute, we hold

that the application filed by the Appellant u/s 9 of the 'I&B Code' was not

maintainable.

13. However, our observations will not come in the way of Appellant to move

before the Competent Jurisdiction / Forum for appropriate relief.

14. The appeal is dismissed with the aforesaid observations. No costs.

[Justice S. J. Mukhopadhaya] Chairperson

[Justice A. I. S. Cheema] Member (Judicial)

ss/gc

Company Appeal (AT)(Insolvency) No. 638 of 2018