Mukesh Agarwal vs Rqs Engineering Pvt. Ltd

Company Appeal (AT) (Insolvency) No. 263 of 2019

IN THE MATTER OF:

Mukesh Agarwal ...Appellant

Versus

RQS Engineering Pvt. Ltd. ...Respondent

Present: For Appellant : Ms. Neela Gokhale, Ms. Shradha Agrawal and Mr. Ilam Paridi, Advocates

For Respondent : Mr. Rakesh Kumar and Ms. Chetna Bisht, Advocates

ORDER

09.09.2019 The 'RQS Engineering Private Limited' (Operational Creditor)

filed an application under Section 9 of the 'Insolvency and Bankruptcy Code,

2016 (for short, 'the I&B Code') for initiation of 'Corporate Insolvency Resolution

Process' against 'Thermo Products Private Limited' (Corporate Debtor). The

Adjudicating Authority (National Company Law Tribunal), Mumbai Bench,

Mumbai, by impugned order dated 21st February, 2019 having admitted the

application, the said order has been challenged by the Director/Shareholder of

the 'Corporate Debtor'.

2. Learned counsel for the Appellant submitted that there is a 'pre-existence

of dispute' and the Adjudicating Authority has failed to consider the same.

Reliance has been placed on the reply to the notice under Section 8(1) sent by

the 'Operational Creditor'.

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3. Learned counsel for the Appellant referred to the minutes of the meeting

dated 28th November, 2017, wherein it was mentioned that the materials

supplied by the 'Operational Creditor' were rejected as they were not suitable for

the 'Corporate Debtor'. Reliance has been placed on an e mail dated 17th

November, 2017 and the reply of the said email given by the 'Operational

Creditor' by letter dated 23rd November, 2017 to suggest that there is a 'pre-

existing dispute.

4. Learned counsel for the Respondent (Operational Creditor) disputed the

facts and submitted that the materials were accepted by the 'Corporate Debtor'

and were never returned back as no request was made for replacement. On the

other hand, the 'Corporate Debtor' issued post dated five (05) cheques on 20th

November, 2017; 21st November, 2017; 23rd December, 2017; 23rd December,

2017 and 23rd December, 2017 which were bounced.

5. Referring to the aforesaid cheques, it was intimated that the cheques have

been issued on 23rd December, 2017. It is clear that meeting, if any, held on

28th November, 2017 is an afterthought.

6. From the record, we find that the Demand Notice under Section 8(1) was

issued by the 'Corporate Debtor' in Form 3 issued on 8th May, 2018 referring to

Invoice No. 570 dated 20th September, 2017 for Rs.19,47,000/-; Invoice No. 574

dated 21st September, 2017 for Rs. 19,47,000/-; Invoice No. 654 dated 23rd

October, 2017 for Rs.19,47,000/-; Invoice No. 656 dated 23rd October, 2017 for

Rs.19,47,000/- and Invoice No. 657 dated 23rd October, 2017 for Rs.19,47,000/-

(Total Rs. 97,35,000/-).

7. In reply to the same, the 'Corporate Debtor' by letter dated 18th June, 2018

has replied that in the meeting held on 28th November, 2017, the 'Corporate

Company Appeal (AT) (Insolvency) No. 263 of 2019 3

Debtor' had rejected the material as it was not suitable for them. However, it

was accepted that the 5 post-dated cheques bearing Nos. 001803, 001804,

001805, 001806 and 001807 dated 26th April, 2018; 26th May, 2018, 26th June,

2018; 26th July, 2018 and 26th August, 2018 each for a sum of Rs.19,47,000/-

were issued with the request to the 'Operational Creditor' that they could show

the same to the Banker and get the advance payment as claimed. Thus, we find

that there is no communication by the 'Corporate Debtor' to 'Operational

Creditor' about the 'pre-existence of dispute'. If there was a quality difference,

then there was no question of issuing post-dated cheque dated 26th April, 2018

while giving reply to the notice under Section 8(2). The said post-dated cheques

have also been bounced and 'Operational Creditor' has no other option but to

file the application, which has rightly been admitted by the Adjudicating

Authority.

We find no merit in this appeal. It is, accordingly, dismissed. No costs.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial)

/ns/nn/

Company Appeal (AT) (Insolvency) No. 263 of 2019