Merely Stamping Invoices Does Not Imply Acceptance Of Debt Without Resolution Of Pre-Existing Dispute: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that mere stamping of tax/proforma invoices at the site office by lower functionaries of the Corporate Debtor only indicates receipt and does not imply acceptance by the Corporate Debtor that there was no pre-existing dispute with respect to the quantum of the amount payable by the Corporate Debtor to the Operational Creditor, especially when the dispute related to the quantum of the amount had already been raised multiple times before issuance of the demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016 (Code). Brief Facts: Sadbhav Engineering Limited (Corporate Debtor) was engaged by Uranium Corporation of India Ltd (UCIL) to carry out activities at Banduhurang Opencast Mines, Jamshedpur. Subsequently, the Corporate Debtor issued a Work Order to Tirupati Drilling & Mining Services Private Limited (Operational Creditor) for drilling operations at the site, initially for a year, and later extended until March 31, 2020. Despite reminders, the Corporate Debtor failed to release outstanding payments to the Operational Creditor and, instead, denied claims and making baseless allegations. Subsequently, the Operational Creditor issued a Demand Notice under Section 8 of the Code, which was duly received by the Corporate Debtor. With no resolution in sight, the Operational Creditor filed an Application under Sections 8 and 9 of the Code. However, the Adjudicating Authority (AA) dismissed the Application on the grounds of pre existing disputes between the parties. Against the above order, the present appeal has been filed. Contentions: The Appellant submitted that communications issued by the Respondent were not “notice of dispute.” Vague denials of liability by the Respondent were sham, moonshine and illusory. It was further submitted that there were no pre-existing disputes between the parties prior to the issuance of the Demand Notice on December 31, 2021, and the ingredients required for initiating Corporate Insolvency Resolution Process (CIRP) in respect of the Respondent were fully and sufficiently proved and satisfied. Per contra, the Respondent submitted that the Corporate Debtor has raised dispute with respect to the quantum of amount, multiple times prior to the issuance of the Demand Notice dated 31.12.2021 by the Petitioner. Lastly, it was submitted that in the present case, there is a pre-existing dispute between the parties with respect to the quantum of amount. The Operational Creditor has claimed false/ wrong claim/ amount, which speaks volumes about the conduct of the Operational Creditor. The present Petition, therefore, deserves to be rejected. Observations: The Tribunal at the outset noted that there is a dispute regarding the quantum of the amount payable by the Respondent, which has been raised multiple times prior to the issuance of the demand notice dated 31.12.2021 and remains unresolved. It further added that Respondent's submission is accepted that UCIL, being a Government body, requires all work to be certified by a third-party independent agency and backed by logbooks maintained by the Appellant, duly signed by the Respondent and certified, failing which the invoices are mere one-sided statements. It was also held that stamping of tax/proforma invoices at the site office by lower functionaries merely indicates receipt, not acceptance, by the Respondent. Based on the above, the Tribunal observed that In the facts and circumstances of this case, there is a dispute with respect to the quantum of amount which is much prior to the issuance of the demand notice dated 31.12.2021 by the Appellant. It held that as per Section 8(2)(a) of the Code, the respondent has brought on record the existence of a dispute. The AA as per the provisions of Section 9(5) on finding a notice of a pre-existing dispute has not admitted the Section 9 Application. Accordingly, the present appeal was dismissed. Case Title: Tirupati Drilling & Mining Services Private Limited Versus Sadbhav Engineering Limited Case Number: Company Appeal (AT) (Insolvency) No. 95 of 2025 & I.A. No. 395 of 2025 Judgment Date: 08/04/2025 For Appellant : Mr. Abhijeet Sinha Sr. Advocate with Mr. Shaunak Mitra, Mr. Saikat Sarkar, Mr. Biswajit Kumar, Mr. Indradeep Basu and Ms. Bhavya Khatreja, Advocates. For Respondent : Mr. Navin Pahwa Sr. Advocate with Mr. Rohan Talwar, Mr. Nilay Gupta and Mr. Uday P., Advocates. Click Here To Read/Download The Order

Merely Stamping Invoices Does Not Imply Acceptance Of Debt Without Resolution Of Pre-Existing Dispute: NCLAT

Mohd Malik Chauhan

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