2018 (5) TMI 691 - AT - Insolvency and Bankruptcy

Appeal Dismissed: Dispute Existence Upheld in Insolvency Resolution Process

The appeal filed by M/s. AS Technosoft Private Limited, the Operational Creditor, against the rejection of the application for Corporate Insolvency ... Initiation of ‘Corporate Insolvency Resolution Process’ - application rejected rejected on the ground of ‘existence of dispute’ - e-mail supply for which the payment is due from the Appellant which shows substandard quality of sending e-mails - Held that:- For one of the month it is shown that out of 100% mails, ‘spam’ is 37.4% and ‘inbox’ is 62.6%. Similarly, for another month the ‘spam’ is 31.9% and ‘inbox’ is 68.1%. Similarly, in another month the ‘spam’ is 67.3% and ‘inbox’ is 32.7%. The aforesaid e-mail of Respondent itself suggest that a number of e-mails were not reached the ‘inbox’ which shows inefficiency on the part of the Appellant, though they claimed 100% payment. From the record, we find that the Appellant has also replied to the aforesaid e-mails and denied the allegations whereinafter part payment has been made. Payments have been made against some of the bills and TDS has been deducted. From the aforesaid facts, it is clear that there is an ‘existence of dispute’. Appeal dismissed. Issues:1. Rejection of application under Section 9 of the Insolvency and Bankruptcy Code, 2016 due to the existence of a dispute.Analysis:The appeal was filed by M/s. AS Technosoft Private Limited, the Operational Creditor, against the order of the Adjudicating Authority rejecting the application for the initiation of Corporate Insolvency Resolution Process against M/s. Goldsquare Sales India Pvt. Ltd., the Corporate Debtor, citing the existence of a dispute. The Appellant argued that the dispute arose only after a notice was issued under Section 8 of the Insolvency and Bankruptcy Code, 2016, and should not be a ground for rejection.In response, the Respondent's counsel referred to an Advocate notice dated 29th August, 2017, where it was stated that the Appellant had breached the contract and charged excess payment. The notice demanded a refund and compensation for losses incurred by the Respondent due to defective services. The Appellant contended that the notice was issued by M/s. Awari Technologies Pvt. Ltd., not the Respondent.The Respondent clarified that the agreement was between M/s. Awari Technologies Pvt. Ltd. and the Appellant for sending e-mails, with payment to be made by the Respondent. The e-mail evidence provided by the Respondent showed inefficiency on the part of the Appellant in delivering e-mails, leading to a dispute. The Appellant had responded to the allegations, made partial payments, and deducted TDS.The Tribunal concluded that there was indeed an existence of a dispute based on the facts presented. Therefore, the appeal was dismissed, upholding the impugned order passed by the Adjudicating Authority. No costs were awarded in the case due to the circumstances.