AI Drafter 
TaxTMI 
TaxTMI 
2018 (6) TMI 1261
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....ed this application on behalf of Applicant/ Operational Creditor by authorisation letter/ Board Resolution dated 08.08.2017. 3. The Respondent/Corporate Debtor "M/s. Tricolor India Schauspiel Pvt. Ltd" is a company incorporated under the provision of Companies Act, 1956, bearing Identification Number U74120UP2009PTC037632. The Authorised Share Capital of corporate debtor company is 5,00,000/- (Rs. Five Lakh Only), and Paid-up Share Capital is Rs. 5,00,000/- (Rupee Five Lakh only). 4. Brief facts related to petition are as follows: (i) The Operational Creditor is operating in the field of Motion picture, radio, television and other entertainment activities. (ii) The Total amount of debt which fell due after the supply of services to the corporate debtor is Rs. 85,13,425/- (Rupee Eighty-Five Lakh Thirteen Thousand Four Hundred Twenty-Five Only) up till 5th August 2017, as claimed in Demand Notice Dated 10.08.2017. (iii) The applicant stated that written contract was executed between The Operational Creditor and Corporate Debtor on 01.06.2016 and Mr. Ketan Mehta (One of the Director of the Maya Movies Private Limited and the Actor and Artistic Director....
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....he payment for the sai invoices amounting to Rs. 26,25,000/- was made on 02.06.2016. (vii) The Balance payment of Rs. 75,00,000/- plus Interest is due and payable by the Corporate Debtor to the Operational Creditor till date. (viii) The Operational creditor has sent reminder dated 14.10.2016, 19.01.2017 and 25.01.2017 to the Corporate Debtor demanding remaining payments. The Corporate Debtor did not make the payment, and there was no denial by the Corporate Debtor of its obligation to make the payment to the Operational Creditor. Further, no allegation of any non-performance was raised by the Corporate Debtor. (ix) The Operational Creditor sent a Demand Notice under Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority Rules, 2016) to the Corporate Debtor on 10th August, 2017. (x) Operational Creditor further stated that on receiving the Notice, the Corporate Debtor replied on 21.08.2017, and therein wrongfully and falsely refused to pay the claim amount alleging first time that Operational Creditor had failed in performing its part of the Agreement, but there was no allegation of the existence of dispute before. ....
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..... (iv) That is believing the representation of the Operational Creditor and its Director Mr. Ketan Mehta; the Corporate Debtor collaborated with the Operational Creditor. The Project was awarded to the Corporate Debtor for the tender of the "Jang-E-Azadi Memorial Project". Project required detail study of Punjab History, the independence movement, understanding the sensitivities of audience, preparation of script in three different languages, visualization for different mediums of hydro shield, wall mapping to transform the structure in the context of the narrative, laser beam tunnel and animation, supervision and guidance of designing visuals for 2D and 3D Animation. Supervision of designing of the equipment placement, layouts for achieving the artistic effects, voice recordings etc. (v) Corporate Debtor stated that the show was of a substantial magnitude, the largest permanent multimedia installation in India till date which required specialised equipment and support. Visualization of such show cannot be claimed by the little breakdown of Topics of the show in 5 Pages, which according to the corporate debtor is only work done by Operational Creditor and Mr. Keta....
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.... the role of the parties, a written agreement dated 01.06.2016 was agreed between the Operational Creditor and Corporate Debtor, and that Mr. Ketan Mehta agreed to take credit for this project. (Copy of agreement dated 01.06.2018 is annexed as Annexure R-VI). (xi) Corporate Debtor has stated that the project at that time was already running behind schedule and the role of Mr. ketan Mehta was delineated. And upon execution of the agreement, The Corporate debtor paid 25% to the Operational creditor as a gesture of good will and hope that relation between them shall flow smoothly and further stated that this Payment of 25% did not correlate any step being complete after the agreement or any alleged work previously done. The payment was made upon the Execution of the agreement. Mr. Ketan Mehta had not made any suggestion to the dramatised script. He did not meet the clients regarding the change in the script. (xii) That the Corporate Debtor requested Mr. Ketan Mehta to work out on an urgent basis, a detailed visualization of the project and operational creditor on 23.06.2016 sent an email containing the alleged visualization of the entire show, but corporate debtor st....
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....al and International award winning film director; he is also MD of Maya Digital Studio Pvt. Ltd, India's leading Animation and visual effects studio, he has directed historical films on Indian Freedom movement like "SARDAR" on the life of Sardar Vallabh Bhai Patel and "MANGAL PANDEY"-THE RISING, on the revolt of 1857 and is having a keen interest in history. (ii) Mr. Hiamanshu Sabbharwal of the Corporate Debtor was fully aware of the stature and standing of Mr. Ketan Mehta in the Media field, approached Mr. Ketan Mehta on November, 2015 to provide his services as the "Creative Director" of a proposed sound and light show titled "Jang-e-azadi" at Jalandhar to be completed by October 2016, Mr. Ketan Mehta agreed to the terms and gave letter of consent for the same on 10-11-2015. So, Himanshu Sabharwal of the Corporate Debtor used the name of Mr. Ketan Mehta as the "Creative Director" in the Tender Application "to the Punjab government for getting the said project. (iii) Operational Creditor in their rejoinder further stated that Corporate Debtor also requested Ms. Deepa Sahi, the Managing Director of the Maya Movies Pvt. Ltd. to attend the Punjab Govt, approving....
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....eative effort and services rendered by Mr. Ketan Mehta without paying him for the services rendered by him as per contract. (x) Repeated letters and queries were written to Mr. Himanshu Sabharwal regarding project which went unanswered, at no stage corporate debtor communicated any dissatisfaction with the services rendered by Mr. Ketan Mehta nor did he communicate the termination of the services. He did not reply nor did he pay. (xi) Operational Creditor further contented that Corporate Debtor with premeditated mala fide intention, approached Mr. Ketan Mehta to use his creative credentials and credibility to get the contract for the Project from The Punjab Govt, and used his services and creative expertise to develop the script and get it approved by the Govt, and get the detailed Creative Visualisation for the project, and once all this most crucial part of the process was completed, they then reneged on their commitments to pay the fee to Mr. Ketan Mehta, in spite of repeated reminders. 7. Heard the counsel for both the side at length and perused the record available. 8. The present petition is filed under the Provision of section 9 of IBC, 2016. Hence it....
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....Azadi" invited by Punjab Government in Collaboration with Punjab Freedom Movement Memorial Foundation (PFMMF). 11. It is relevant to produce part of Email dated 07.11.2015 sent by Himanshu Sabharwal of Tricolor to Mr. Ketan Mehta of Maya Movie, which was sent much before of signing of the agreement (01.06.2016). "Dear Ketan Ji, It was indeed a pleasure meeting up with you earlier this week; I will cherish this first meeting for times to come. In that afternoon I learnt a lot from you and was humbled by your personality, I truly value our working together. we are preparing the bid and would be sending it for your perusal soon next week. Meanwhile, I have attached the draft of the letter of consent as desired by you. Please be kind to reproduce this on your letter head and mail it back to us by Monday. I shall be in touch and would visit Bombay later in the month as agreed, to deliberate further on our partnership." Further, Corporate Debtor also sent email dated 19.11.2015 to Ms. Deepa Sahi, the Managing Director of the Maya Movies Pvt. Ltd. Informing about the arrangement of Flight to attend the meeting with Punjab Govt. Approving com....
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....e long time and only add to complication. (2) Even if we record in next week and get down to making music etc., the audio track will not be ready before mid- July. This means this means there are only 2 months to make the content after that, because in spite of delay in approval, the deadline stands where it was. And it may not be possible to even complete the show after that. Since we have stake our reputation and money on it, we are very worried about it. (3) Since you do not have a prior experience and a ready team familiar with mapping it cannot be left to you alone. Moreover, Ross is a partner in Tricolor and I think it was agreed upon, that he would be making the content. Ketan ji need to visualise it, but he is not hand on graphic artist like Ross. So I don't understand, where is the problem in letting Ross work with the story board and take his inputs to move forward. Moreover, there is lot of mathematics involved apart from the aesthetics in transforming the architecture of the building to suit a certain context the time is too less to experiment, build a fresh team etc. and Ross cannot park himself in India for 2 months. (4) As we had discus....
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....u Sorry to be the bad cop but ketan is wondering if there is anything the problem as why you are not sending the contract etc. though you had first committed to send in Jan, then march and now even after 10 days of approval you are still not sending it. Please let us know that status at the earliest It it's not happening do inform." Mr. Himanshu Sabharwal of the Corporate Debtor has accepted his fault and on same day replied to Ms. Deepa Sahi of Operational Creditor. Reply email is reproduced. " Deepa Ji As I said, I am out and It is being done. We did send you the draft way back in January but could not finalise the terms. Now that it is sorted, it will be done. Regards." 17. It is after such reminder conversation, Agreement was finalised, and Mr. Ketan Mehta of the Operational Creditor was appointed as "Visualizer cum Artistic Director" with the condition of payment of Amount of Rs. 1,00,00,000/-INR (Rupee One Crore Only) after completion of several stages. Terms and Condition of Agreement are reproduced here below: - "Payment terms for the entire job work." Stage 1-25% of the agreed ....
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.... of Corporate Debtor to the Operational creditor that they were in not position to incorporate changes suggested by the operational creditor to the script at that point of time. 20. Now the issue arises, and the only ground for Operational Creditor to file this section 9 Application is payment of the remaining amount of Stages 2, 3, 4, 5 of work as per Agreement. 21. The sole ground of the Argument of the Counsel for the Corporate Debtor is that, there is not a single phenomenon which depicts that Operational Creditor has helped Corporate debtor in Completion of project, or put any effort towards it, and it was alone Corporate Debtor and its team effort for completing Stages 2, 3, 4, 5 work, so there arises no question of payment for/these Stages and this remaining payment cannot be considered as Operational Debt. 22. Hence, there was burden of proof towards Operational Creditor to clarify such objection taken by the Corporate Debtor, Counsel for the Operational Creditor clarifying to such aspect again brought to our notice, E-mail dated 19.05.2015 sent by Corporate debtor to Operational Creditor and laid emphasis on points 3, 4, 5 of this Email that is as follows: - ....
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....usal of Email of Mr. Himanshu Sabharwal of Corporate Debtor dated 01.07.2016 it is quite clear that he has not raised any objection related to visualization send by Operational Creditor to Corporate Debtor and Email dated 01.07.2016 is reproduced here below: - "Dear Ketan Ji Zindabad, I with the help of your input mailed last week, we have worked out a visualization for you to see. Do let us know when Ross can speak to you about it. I shall co-ordinate accordingly. Your valuable guidance is awaited. Thanks & Regards, Himanshu Singh Sabharwal." 26. Counsel for the Corporate Debtor has also raised the objection that Operational has not co-ordinated with their team for completion of further stage of work and no one including Mr. Ketan Mehta was present at venue of the work, Counsel for the Operational Creditor has objected to such point and has stated that Mr. Ketan Mehta of Operational Creditor had met with Mr Ross of Corporate Debtor in London when he was visiting London for film festival in June,2016 and had a detailed discussion with Mr. Ross on the visual treatment of the sound and light show based on the visualized script developed by Mr. K....
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.... is likely to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application". 28. A perusal of record shows that Corporate Debtor has not annexed any evidence which shows that they were unsatisfied with this visualization provided by Operational Creditor and it is the first time during reply to demand notice Corporate Debtor have stated that Operational creditor has not performed the work as per Agreement. Corporate Debtor failed to point out single evidence/correspondence email prior to reply to Demand Notice where this Tribunal could establish that there was Pre-Existing Dispute between the Operational Creditor and Corporate Debtor for non-performance of the work as per Agreement. 29. Hence, following the Principle laid down by the Hon'ble Supreme court along with the bare reading of above-stated provision along with the discussion above, it is seen that there has been no pre-existing dispute before the issuance of demand notice between Operational Creditor and Corporate Debt....