1. The application under section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "the IBC, 2016") is filed by M/s. Kashyap Infraprojects Private Limited - the Operational Creditor against M/s. Hi-Tech Sweet Water Technologies Private Limited - the Corporate Debtor for initiation of the Corporate Insolvency Resolution Process ("the CIRP) of the Corporate Debtor on the ground that the Corporate Debtor committed default in paying the outstanding debt of Rs. 1,42,18,770/-.

2. The following facts are not in dispute:-

I. The Corporate Debtor was assigned with the contract by the Government of Bihar to install solar pump sets at some places within the State. The Corporate Debtor placed the order for the supply of the pump sets with the Operational Creditor. In pursuant thereto, the Operational Creditor supplied the pump sets and raised invoices in between 06.10.2017 to 16.03.2018 (at pages 28 to 84 of this application).

II. The Operational Creditor states that in spite of repeated demands, the Corporate Debtor did not pay the price. Hence, on 01.09.2020, it delivered the Corporate Debtor notice of demand under section 8 of the IBC, 2016. In spite of receipt of the notice, the Corporate Debtor did not reply nor pay the dues, hence, this application.

III. The Corporate Debtor has been served with notice of this application. It has appeared through Mr. Vijay Shah-the authorized representative. He filed an affidavit in reply.

3. We have gone through the contents of the affidavit in reply. In paragraphs No. 7, 9, and 13 of the affidavit in reply, the Corporate Debtor raised the defense that the solar pumps supplied by the Operational Creditor were faulty. The Corporate Debtor could not complete the contract assigned to it by the Government of Bihar successfully because of faulty pumps and delayed deliveries. The fact that the pumps are faulty and deliveries were delayed was informed to the Operational Creditor by WhatsApp messages in between the representative of the Operational Creditor and the representative of the Corporate Debtor. It was prior to the receipt of the demand notice by the Corporate Debtor. The Corporate Debtor has replied to the demand notice and brought to the notice of the Operational Creditor the fact that there is a pre-existing dispute. Not only that pending this application for hearing, on 26.01.2021 the meeting in between the representative of the Operational Creditor and Corporate Debtor took place. In the meeting, the Operational Creditor agreed to replace the pump sets so as to enable the Corporate Debtor to get released the payment from the Government of Bihar. The minutes of the meeting were recorded. The Operational Creditor was to withdraw this application against the Corporate Debtor. But later on, the Operational Creditor refused to act as per the terms of the agreement. Hence, the Corporate Debtor has filed IA/556(AHM)2022 under section 65 of the IBC, 2016 to take action against the Operational Creditor for fraudulent initiation of the CIRP against it. According to the Corporate Debtor, the main application is not maintainable under section 9 of the IBC, 2016, it may be rejected.

4. We heard learned Counsel Mr. Pranav Thakkar for the Operational Creditor and Learned Counsel Mr. Arjun Sheth for the Corporate Debtor at length. We have gone through the pleadings of the parties, evidence, and material on record.

5. The following point arises for our consideration. We record our finding thereon with the reason stated below:

(i) Whether there is a pre-existing dispute pending in between the Operational Creditor and the Corporate Debtor about the quality of the goods supplied

Finding-Yes

Reasons:-

The Corporate Debtor placed on record the printout of the WhatsApp conversation for the period in between 07.02.2018 to 08.02.2020 (at page No. 78 to 134 Annexure-D of the reply). The conversation appears in between one Mr. Niranjan Bihar New Office Staff, Mr. Hirenbhai Bhavsar, Mr. Pragat Singh Brar Sidhu, and Mr. Vijay etc. We have gone through those WhatsApp messages. The conversation gives the impression that there appears some dispute about the quality of the solar water pump sets and delayed delivery/installation. But it is difficult for us to rely on these printouts of WhatsApp conversations for the simple reason that they are not supported with other evidence to show from which mobile numbers the conversations were made. In whose names those numbers are registered The persons taking part in the conversations, are the representative of the Operational Creditor and the Corporate Debtor or not So for the purpose to draw interference that there is a pre-existing dispute, these printouts of so-called WhatsApp conversations cannot be relied on.

6. Apart from that material, the Corporate Debtor has also produced on record an e-mail dated 07.01.2020 (Annexure-E, page 135 of the reply). This e-mail was sent by the Corporate Debtor to the Operational Creditor pointing out major reasons for the delay in billing. They are-(i) solar system not working properly, (ii) pumps and controllers fail randomly at some sites. For ex-kumar site, the pumps are not working. (iii) Departments ignore to do running bills, they want to bill only successful completing the sites. This e-mail was sent by the Corporate Debtor to the Operational Creditor prior to the demand notice dated 01.09.2020. The Operational Creditor says that the Corporate Debtor did not reply to the demand notice but the Corporate Debtor placed on record notice of reply whereby it was brought to the notice of the Operational Creditor that there is a dispute about the quality of solar pumps.

7. Learned Counsel for the Operational Creditor tried to impress upon us that it is a created dispute. The pumps are working in proper condition. But in our considered view, since this fact itself is designed by the Corporate Debtor, it becomes a disputed question of fact to which this Adjudicating Authority cannot go into record finding in its limited jurisdiction. In our considered opinion, the dispute which existed in between the Operational Creditor and the Corporate Debtor prior to the demand notice about the quality of the pump sets supplied requires detailed inquiry and investigation by the proper forum and this Adjudicating Authority is not that forum. Hence, we hold that there is a pre-existing dispute pending in between the Operational Creditor and the Corporate Debtor about the quality of the pump sets supplied. We answer point No. 5(i) in the affirmative.

8. The Corporate Debtor filed IA/556(AHM)2022 under section 65 of the IBC, 2016 to take action against the Operational Creditor on the ground that it has initiated this CIRP fraudulently. For this, the Corporate Debtor relied on the e-mail dated 07.02.2020 wherein it is noted that there was a meeting in between Mr. Hiren Bhavsar (Director), Mr. Krunal (Engineer) of M/s. Kashyap Infra Pvt. Ltd. i.e., the Operational Creditor and Vijay Shah, Mr. Bhadresh Kapadi etc., representative of the Corporate Debtor. It shows that it was agreed that the Operational Creditor will replace all pumps and control panels. These documents, indeed support the defense of the Corporate Debtor that there is a preexisting dispute about the quality of the pumps. But this fact is not enough to hold that the Operational Creditor filed this application with fraudulent intention. Certainly, there is a dispute about the quality of the pump sets but the fact admitted on record is that the Operational Creditor has supplied the pumps to the Corporate Debtor but did not get its price. While supplying the pumps, the Operational Creditor might not have foreseen that the pump and control panel will not work properly etc. For this reason, we hold that it is not a case of fraudulent initiation of the CIRP by the Operational Creditor against the Corporate Debtor, we reject IA/556(AHM)2022. We pass the following orders:

ORDER

I. For all the above reasons, we hold that the application filed under section 9 of the IBC, 2016 is not maintainable. Hence, this application stands rejected and disposed of.

II. In view of the above observations, the application filed by the Corporate Debtor under section 65 of the IBC, 2016 also stands rejected and disposed of.

III. Urgent certified copy of this order, if applied for, to be issued to all concerned parties upon compliance with all requisite formalities.