TaxTMI 
TaxTMI 
2020 (5) TMI 195
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....6-2018 5,07,330 3. Penalty for breach of contract without giving stipulated notice period as per agreement 55,08,313 4. Mental agony caused to company 10,00,000 Total 1,83,87,559 Hence this petition is filed under section 9 of the Insolvency and Bankruptcy Code, 2016, read with rule 6 of the Insolvency and Bankruptcy (Application to the Adjudicating Authority) Rules, 2016, seeking admission of the petition, initiation of the corporate insolvency resolution process, granting moratorium and appointment of interim resolution professional as prescribed under the Code and Rules thereon. 2. The averments of the petition filed by the petitioner/operational creditor in brief are : (i) M/s. Vertex Customer Management India P. Ltd./operational creditor is a company registered under the Companies Act, 1956 and is engaged, inter alia, in the business of providing customer services to its clients. Abhibus entered into an agreement on October 30, 2015 with Vertex for availing the services across India. A debt amount of Rs. 1,13,71,917 is due from the corporate debtor towards services rendered by the operational creditor against the following in....
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....de, 2016 an application under section 9 can be initiated only "after the expiry of the period of 10 days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of dispute under sub-section (2) of section 8". Since application fails to specify the date of delivery and fails to evidence such delivery through any postal documents, calculation of 10 days time period is not possible. So, the application ought to be rejected for non-compliance with the stipulations under section 9 of the I and B Code, 2016. (iii) It is averred that after receiving the alleged demand notice by one of the directors of the respondent-company, the respondent sent a detailed reply notice dated July 27, 2018 under section 8(2) of the I and B Code. The notice contains that the applicant had caused multiple instances of breach under the service agreement dated October 30, 2015 and communicated to the applicant from time to time. The debt dispute notice contains seven annexures, containing e-mail correspondence and various other documents, which are voluminous in size....
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....he applicant herein approached the respondent claiming to have expertise in delivering customer services. Pursuant to the representation, they entered into service agreement on November 30, 2015 whereunder the applicant agreed to provide services catering to the customers of the respondent, containing three annexures, i. e., scope of ser vices, service level agreement (SLA) and charges and payment mechanism (CPM). (viii) It is averred that some of the key clauses are incorporated in the service agreement and mentioned at paragraph 9 of the counter. (ix) Further, it is averred that the service agreement stresses on the need for the applicant to have adequate trained manpower, functional tele phone lines, contact services, IT infrastructure among others. (x) It is averred that under clauses 11 to 15 of the SLA, the parties have specifically agreed on the applicant's liability to be levied with penalties and the penalties range up to Rs. 3,50,000 based on each such violation and the penalties are fixed separately for private buses and APSRTC buses. (xi) It is averred that the service agreement dated December 17, 2015 was amended four times till ....
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....ms failure for a substantial time period during which time the customers' problems could not be received and addressed, among others, constituted serious instances of breach. This led to the respondent being perceived in the online bus ticketing/travel segment as not a consistently reliable entity by the customers at large. (xvii) It is averred that the applicant closed down its Bengaluru operations. As a result, the respondent lost a substantial number of customers and operators, which resulted loss of substantial monies for the respondent. (xviii) It is averred that the applicant's multiple instances of breach of the SLA, the respondent was levied with penalties by the Telangana State Road Transport Corporation. Thus, the instances of breach of the SLA caused for the respondent to be penalized for no default. (xix) It is averred that due to multiple instances of breach of the ser vice agreement, the respondent constrained to terminate the service agreement with effect from May 19, 2018 vide termination letter dated April 19, 2018. (xx) It is averred that the alleged operation debt claimed by the applicant of Rs. 1,83,87,559 stands dispu....
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....une 15, 2018 which was received by the respondent only along with the demand notice under the I and B Code. The applicant has deliberately suppressed filing the cheque dishonour notice as it shows the applicant's consent to receive lesser amounts under invoices dated December 23, 2017 and January 18, 2018. (xxvi) It is averred that the applicant in accepting the PDCs, depo siting them and issuing dishonour notice clearly evidences that the applicant had expressly accepted the amount due under invoice dated December 23, 2017 is not Rs. 26,14,472 as claimed in the demand notice and the CP applicant but is Rs. 23,54,058 and that the amount "due" under the invoice dated January 18, 2018 is not Rs. 22,88,878 as claimed in the demand notice and the CP application but is Rs. 20,10,649. The applicant is only entitled to claim the invoice after penalty deduction, the applicant has made a wrong claim of the principal amount showing it as due debt. As regards the remaining four invoices dated February 15, 2018, March 21, 2018, March 31, 2018 and May 17, 2018 the applicant deliberately made wrong claims of preliminary invoice amounts. As regards the Seventh invoice dated June 13, ....
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....f the ser vice agreement. (xxxiii) It is averred that the applicant has deliberately claimed wrong amounts in the 7 invoices ; committed multiple instances of breach under the service agreement ; made baseless and unjustified claims regarding interest on invoices and penalty for termination of the agreement ; and baseless claims for alleged mental agony. It is also averred that the applicant has filed the instant CP to harass the respondent and to unjustly enrich itself by causing wrongful gains for itself and wrongful losses to the respondent and the applicant has circumvented the arbitration dispute resolution mechanism under the service agreement and is liable for abuse of process of law and of process of this Tribunal. The operational debt is denied as outstanding or payable as it is disputed, unascertainable, illegal, irrational, unlawful and not due. 4. Rejoinder filed by the petitioner/operational creditor, in brief are as follows : (i) It is averred that the corporate debtor is fully conversant with the contents of demand notice as it gave a reply dated July 27, 2018 which is evident that the respondent has received the demand notice and the respondent ....
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....the petitioner filed all the documents while raising the invoice in terms of clause 6.5 of the agreement and the respondent also acknowledged the same. (ix) It is once again reiterated that the petitioner has filed all the sup porting documents along with the invoice duly following the procedure prescribed in the service agreement. It is disputing only one of the invoices, more particularly invoice No. 7 which is alleged to have been submitted without any supporting documents. The respondent agrees that the petitioner is entitled to the undisputed amounts, the respondent has not released the amounts which lawfully belong to the petitioner, the said inaction of the respondent in releasing the payments due to it and hence the demand notice issued is wholly justifiable. As regards computation, the petitioner sent the final calculation for the invoice dated June 17, 2018 to the corporate debtor but the same evoked no response from the corporate debtor. (x) It is averred that as per the service agreement, clause 6.4 reads that the penalties shall be deducted from the payments being made to the petitioner/operational creditor. It is averred that when penalties are being....
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....ng the due amounts, the respondent at whose behest and acts did the petitioner-company suffer losses and hence the present application is rightly instituted before the hon'ble Tribunal and hence to be allowed. 5. We have heard counsel for the operational creditor and counsel for the corporate debtor. Both sides filed written submissions. The points urged in the written submissions will be dealt in the course of the order. 6. Learned counsel for the operational creditor would contend that the corporate debtor committed default of Rs. 1,83,87,559 which includes interest which is due towards the customer care services which operational creditor rendered for the corporate debtor in pursuance of service level agreement dated October 30, 2015 and amendments thereon. 7. Learned counsel contended the corporate debtor approached the operational creditor for extending services owing to the goodwill and reputation of the operational creditor. Counsel contended corporate debtor utilized the services of operational creditor which were rendered to the utmost satisfaction of corporate debtor. Counsel contended the corporate debtor however committed default in respect of the invoices ....
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....rate debtor and that petition is liable to be admitted. 9. On the other hand, counsel for the corporate debtor would contend that services rendered by operational creditor are totally unsatisfactory and customers were dissatisfied with the services of operational creditor. There are numerous complaints about services of operational creditor. Counsel contended the corporate debtor has highlighted the various types of deficiencies of services in extending services to the customers. The details of alleged deficiency of services are stated below : (a) Vertex failed to employ its own personnel to provide customer care services, and had required the vice president of Abhibus to step in and recruit personnel for Vertex ; (b) Vertex failed to deliver even basic customer care services, resulting in bad reviews from customers on various online platforms resulting in loss of reputation, customer and goodwill to Abhibus ; (c) Vertex failed to employ supervisory or managerial employees ; (d) Vertex failed to provide qualitative and proper IT infrastructure to handle the customers' concerns, calls and queries ; (e) Vertex abruptly closed its Be....
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.... evidence . . . The court at this stage does not 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." Thus, the corporate debtor terminated the service agreement with effect from May 19, 2018. Thus, there was prior dispute raised by the corporate debtor. Counsel also contended the particulars of claim is not correct. 11. Counsel prayed that petition is liable to be rejected. The simple question involved in this case whether there exists a prior dispute. It is true operational creditor entered into service agreement with the corporate debtor. The operational creditor to render customer care services to the customers of corporate debtor. The main contention of corporate debtor that the services rendered by the operational creditor are not satisfactory and there are several deficiencies in the services of operational creditor. The contention of the corporate debtor that customers expressed total dissatisfaction of the services rendered by the operational creditor. 12. The corporate debtor has relied on the....