TaxTMI 
TaxTMI 
2019 (9) TMI 892
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....: a. It is stated that the Debt arose due to non-completion of the Task Orders, liable to be refunded in full, as per Clause 6(b) and 12(d) of the Master Services Agreement, dated 15.05.2015. b. It is stated that the Petitioner and respondent entered into a Master Services Agreement, executed on 15th May, 2016, in order to carry out the research and development of the Final Product Dossiers in pursuance to the Task Orders No. VBS/ NPD/ TO- 01, VBS/NPD/TO-02, VBS/NPD/TO-03 and VBS/NPD/TO-04 as per the terms and conditions of the said MSA. c. That on 1st July, 2016, a sum of Rs. 23,00,000/- (Twenty-Three Lakhs Only) was paid as a full and final advance for the Task Orders and the same has been mentioned in the Invoice No. GE/HYD/2016- 17/JULY/1. The final completion date of the task orders was 15th February, 2017 which was not adhered to by the Corporate Debtor. d. That, the Operational Creditor began to enquire about the Task Orders from 6th February, 2017 but it was always asked to wait. e. That, in the month of April, 2018, the Operational Creditor asked for the deadline for the handover of the Dossiers but the Corporate Debtor conveyed to the Operational Creditor that t....
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....ted 11th June, 2018, which remains unanswered till date. The Corporate Debtor through his reply to the Demand Notice attempted to raise a new dispute of Rs. 1,40,00,000/- and Rs. 7,50,000/-. l. It is stated that further, the Clauses 3(f), 4(a), 4(b), 4(c), 9(c) and 12 of the Master Services Agreement clearly describe the manner in which the Corporate Debtor was allowed to make any expenditure on behalf of the Operational Creditor, and the mode of payments, validity, legality etc. of such expenditures. The aforementioned events clearly display the malafide intention and the coercive arm-twisting tactics of the Corporate Debtor. These statements have been made by the Corporate Debtor only because it is unable to fulfil obligations as per the Master Services Agreement. m. That, Clause 6(b) of the MSA clearly states that after the term of the MSA has ended, any "unearned" income has to be returned to the Operational Creditor. Further, the clause 12(d) of the MSA also specifically states that the corporate debtor shall refund any commission or amount paid by the Operational Creditor if the Corporate Debtor fails to deliver the project deliverables. Hence, the Petitioner is entitled ....
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....8 acknowledging the said outstanding liabilities are annexed as ANNEXURE-1 and ANNEXURE-2. III. It is stated that for any person to initiate CIRP, it is prerequisite to send a notice to the Respondent and if the Petitioner receives any notice of dispute from Respondent as contemplated under Section 8 (2 )(a) of the Insolvency and Bankruptcy Code, 2016, the Petitioner's right to initiate CIRP ceases to exist by receipt of such reply informing the existence of dispute and any petition filed even after receipt of reply of dispute is not maintainable and is liable to be rejected under law. In the instant case, the Petitioner is not an operational creditor as per provisions of the Act, as the Petitioner neither provided any goods nor provided any services to the Respondent. In fact, the Respondent had provided goods and services to the Petitioner for which the Respondent is not paid by the Petitioner as agreed.The Respondent had raised the same issue on many occasions. As such, in view of the dispute regarding liabilities to be discharged by the Petitioner in place, the provisions of Insolvency and Bankruptcy Code, 2016 cannot be invoked and the present petition is to be dismissed....
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....eet the deadlines and has not complied with the terms and conditions of the MSA is absolutely false and denied. In fact, it is the Petitioner who has regularly defaulted in making payments to the Respondent and has still failed to clear the outstanding Rs. 7.5 lakhs due and payable to the Respondent, and product development costs of Rs. 1.4 crores which were promised to be reimbursed to the Respondent as well as commitment to undertake the services of the Respondent for commercial manufacturing of the products. The deadlines were extended as per mutual agreement, only because of the Petitioner's failure to pay the outstanding amount due and payable to the Respondent. As there is dispute in existence the present petition is not maintainable. 4. The averments made in the Rejoinder as are follows: A. It is stated that, the contention of Respondent the Petitioner does not fall under the definition of an "Operational Creditor" and hence, the instant Petition is liable to be dismissed. But the Respondent has failed to consider the facts surrounding the instant matter. It is stated that the parties entered into an MSA on 15/05/16. The said MSA consisted of four Task Orders, which a....
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.... is described in the Task Order. It is mandatory for the Respondent to take the approval of the Petitioner before incurring any costs which are not a part of the MSA or Task Orders. Further the clause 4(c) is exhaustive and the liability of the Petitioner to pay shall only arise under certain conditions. That, said clause makes it mandatory for the Respondent to raise proper invoice in a specific format after the approval to bear such costs are granted by the Petitioner. The clause also lays down the timeline within which the invoices have to be generated and paid. Further, the clauses 4(a), 9(c) and 12 of the MSA limit the liability of the Petitioner in the instant matter. Thus, the aforementioned clauses of the agreement make it clear that the Petitioner is not liable to pay any amount to the Respondent other than the INR 23,00,000/- (Rupees Twenty-Three Lakhs) paid. If the Respondent had a bona fide intention and had genuinely borne the costs, he would have complied with the terms and conditions of the MSA, generated proper invoices in the proper format and most importantly, taken prior written approval of the Petitioner before incurring any such costs. It is averred that intent....
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....ions till 14th May, 2018, another meeting was held between the parties, wherein it was decided between the parties that the Respondent will first fulfil his obligations and only then will the Petitioner make the payment of INR 7,50,000/- (Rupees Seven Lakhs Fifty Thousand). It is further stated that it is an admitted position that the Respondent did not complete the Task Orders and did not handover the deliverables to the Petitioner, and has not fulfilled his obligations till date, hence, the question of paying INR 7,50,000/-(Rupees Seven Lakhs Fifty Thousand) does not arise. That, the said Minutes of the Meetings are annexed as Annexures A-land A-2. H. In the meeting held on 15th May, 2018, it was specifically resolved between the Parties that the Respondent shall complete his obligations mentioned in the Points of the said Minutes, by 23rd May, 2018, and he shall make the payment of Rs. 7,50,000/- (Rupees Seven Lakhs Fifty Thousand) only after the said Points are met. I. The Petitioner requested the Respondent to send the Dossiers to him in Ranchi and made the commitment that he will make the payment of Rs. 7,50,000/- (Rupees Seven Lakhs Fifty Thousand) as soon as he receives....
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....handra Dhatrak reported in (2010) 7 SCC 717 (10) Pradeep Kumar Goil and Anr Vs. M/S Sarveshwar Infrastructure Pvt Ltd and Ors reported in 2016 SCC online NCLT 517. (11) Atyam Veerraju and ORS vs Pechetti Venkanna and Ors reported in (1966) I SCR 831. (12) Mobilox Innovations Pvt Ltd vs Kirusa Software Pvt Ltd reported in (2018) 1 SCC 353. (13) M/S Nupower Renewables Pvt Ltd V. M/S Cape Infrastructures Pvt Ltd reported in TCP/3(IB)/CB/2017. (14) M/S Auspice Trading Pvt Ltd vs M/S Global Proserv Ltd reported in CP: 1584/1BC/NCLT/MB/MAH/2017 6. Similarly, Counsel for Corporate Debtor also relied on the following decisions.- (1) Mobilox Innovations (P.) Ltd.'s case (supra). (2) Yash Technologies (P.) Ltd. v. Base Corpn. Ltd. [Company Appeal (AT) (Insolvency) No.1 of 2019]. 7. The Petitioner claimed that it is an Operational Creditor and that money was given to the Corporate Debtor for the services to be rendered but however, Corporate Debtor committed default in rendering services and as such the amount given to the Corporate Debtor for performing the services was liable to be repaid. The case of Operational Creditor that Corporate Debtor failed to repay the m....
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....he amount given for supply of goods is liable to be refunded which was due and further the same was committed default. 11. The Counsel contended the Corporate Debtor tries to project that there was pre-existing dispute. In fact there was no pre-existing dispute. The counsel contended Corporate Debtor claimed amount of Rs. 7.5 lakhs as if it had incurred extra expenditure. The Counsel contended, the Corporate Debtor further claimed an amount of Rs. 1.40 lakhs. Thus, Corporate Debtor is taking contradictory stand. So Counsel contended, the Operational Creditor is able to prove that amount was given to the Corporate Debtor for rendering services. The Corporate Debtor failed to render the services as agreed under the MSA and as a result he committed default of the amount which was liable to be refunded. 12. On the other hand, the learned Counsel for Corporate Debtor would contend that the present petition is not maintainable as the Petitioner is not an Operational Creditor. Secondly, Counsel contended there is a pre-existing dispute. The contention of the learned Counsel that it is true, parties entered into MSA and four task orders were given and an amount of Rs. 23 lakhs was paid. ....
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....2016 which is marked at page No.57 of the booklet. It is not in dispute that Corporate Debtor to complete the work of four task orders and supply dossiers to the Petitioner. The main contention of the Corporate Debtor that Operational Creditor was liable to pay an amount of Rs. 7.5 lakhs in addition to the amount already paid. The main case of Corporate Debtor that Operational Creditor agreed to pay the sum but however it did not pay. This dispute existed prior to the demand notice issued on behalf of Operational Creditor. 15. It is pertinent to mention that email dated 05.05.2018 sent by the Corporate Debtor to the Operational Creditor conveying the minutes of the meeting dated 04.05.2018. The email dated 05.05.2018 is shown at page No. 70 of the Petition. It is meeting minutes between the Corporate Debtor and Operational Creditor. This was sent by Corporate Debtor to Operational Creditor. Item 4 of the minutes that Operational Creditor to pay an amount of Rs. 7.5 lakhs towards additional charges funded by the Corporate Debtor and payment to be made by 15.05.2018. 16. It is also pertinent to see the email sent to Corporate Debtor by Operational Creditor dated 07.05.2018 which is....
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....Debtor filed certain documents which are e-mails issued from time to time but the fact remains the agreed amount of Rs. 7.5 lakhs was not paid by the Operational Creditor to the Corporate Debtor. This is a pre-existing dispute between the parties. If Rs. 7.5 lakhs was paid to the Corporate Debtor, then Corporate Debtor would have completed the task orders under MSA. Long back dispute was raised before filing the petition. Though email correspondence was filed by the Operational Creditor, yet there was dispute between the parties over payment of balance. Therefore, Petition is liable to be rejected on these grounds. 19. Counsel for Operational Creditor relied on the following decisions:- (i) J.B. Tiwari's case (supra) where in the facts of the case that Operational Creditor provided goods/service to the Corporate Debtor and there was no dispute raised by the Corporate Debtor before the issuance of Section 8 notice and that no dispute raised in reply to Section 8 notice. Whereas in the present case there was a dispute prior to the demand notice and therefore the facts of the said decision are not applicable to the facts of this case. (ii) Dolphin Offshore Enterprises (Maurit....
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....ifically denied all averments made by the OC, stated all relevant facts, filed exhaustive correspondence and documents in support of their averments. Therefore the contention that there was no specific denial of averments in factually untrue and thus this judgment is not relevant or applicable to the present case. (viii) Gopal Krishnaji Ketkar's case (supra). The ratio laid down by the Hon'ble Apex Court in this case, does not apply to the facts of the present CP. There is a clear and unequivocal admission to pay additional amounts by the OC, and the dispute between the parties arose from failure of the OC to pay admitted amounts. The CD has filed all relevant documents and correspondence to show pre-existing dispute. (ix) Laxman Tatyaba Kankate's case (supra). The ratio laid down by the Hon'ble Apex Court in this case, does not apply to the facts of the present CP. It is only relevant in matters adjudicated by a Trial Court where there is absence of specific evidence. In present CP, there is a clear and unequivocal admission to pay additional amounts by the OC, and the dispute between the parties arose from failure of the OC to pay admitted amounts. The CD has ....