TaxTMI 
TaxTMI 
TaxTMI 
2020 (9) TMI 1035
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....3.1.2020,admitted the application under Section 9 of the IBC filed by the Respondent no. 1. Consequently, CIRP of the Appellant (Corporate Debtor) has been initiated. 3. The Impugned Order was delivered on 23.1.2020 and the appeal has been filed on 5.2.2020. Therefore, the appeal has been filed within limitation. 4. The brief facts of the case are as hereunder: (1) The Operational Creditor M/s. PVM Innvensys Private Limited (Respondent no. 1 in this appeal) is a supplier of Global Positioning System (GPS) equipment, who also manages and provides professional services to the Corporate Debtor M/s. C-Tel Infosystems Private Limited with respect to Hedonic Path Finder System (HPFS) projects in the State of Andhra Pradesh and Telangana pursuant to Master Service Agreement dated 02.05.2014 and Managed Services Agreement dated 01.09.2014. (2) The Appellant Company is a company working in HPFS Project for the Excise Department of the Government of Telangana. As part of the project, the Appellant works with several vendors for the supply and installation of GPS trackers among other things. Respondent No.1 is one such vendor, who used to work with the Appellant (Corporate Debtor) in ac....
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....any invoice for 804 number of GPS vehicle trackers is not enclosed with the demand notice and he has not acknowledged any debt to the Operational Creditor. He clarified that e-mail dated 15.10.2015, which was enclosed by the Operational Creditor with the Demand Notice was only a statement of account for review and not an acknowledgment of debt or proof for supply of equipment. (5) On receipt of the reply from Corporate Debtor, the Operational Creditor filed an application under Section 9 of the IBC 2016 and has raised the issue of non - payment of operational debt of Rs. 50,32,028/- for supply and installation of 804 vehicle trackers and Rs. 3,67,200/- for supply and installation of Hippo 30 GPS vehicle trackers. He has mentioned in the application that as on 12/12/2015, an amount of Rs. 53,99,228/- (Rupees Fifty Three Lakh, Ninety Nine Thousand, Two Hundred and Twenty Eight only) is outstanding payable by the Corporate Debtor to the Operational Creditor against these supplies. The Operational Creditor has also given details of certain TDS deductions for Assessment Year 2015-16 of an amount of Rs. 4,89,073/- and a copy of Form 26AS of the Operational Creditor for the Assessment Y....
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.... and installation of 804 GPS vehicle trackers whereas the Learned Adjudicating Authority has admitted the petition with respect to the default of Rs. 3,67,200/- relating to 30 GPS vehicle trackers vide the Impugned Order. The relevant para 37 of the Impugned Order dated 23.1.2020 is reproduced hereunder for ready reference:- "37. Therefore, in the light of the aforesaid decisions, when I shall consider the case in hand, then I find that the application under section 9(2) of the Code is complete, at least default of Rs. 3,67,200/- is admitted by the Corporate Debtor and that has not been paid. It is established by the certificate issued by the Axis Bank which is at page number 280 Annexure 19. Hence, there is no payment of unpaid operational debt, the demand notice has been delivered by the Operational Creditor, notice of dispute has been raised and the amount is more than 1 Lakh. Since these contentions are fulfilled then the Adjudicating Authority has no option but to admit the application of the Operational Creditor." He has also contended that an amount of Rs. 3,67,200/- has already been paid by the Corporate Debtor to the Operational Creditor after the order dated 03.02.202....
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....as argued that in the light of the judgment above and since the invoices were not attached with the demand notice, the demand notices are defective resulting in improper and inappropriate application under Section 9 of IBC 2016. He has also claimed in the appeal memo that the arguments were heard by the Division Bench on 07.11.2019 and after hearing part arguments the Division Bench fixed the case for further arguments on 06.12.2019. It is his claim that on 06.12.2019 a Bench comprising of single member heard the case. Since the senior counsel for appellant was busy in another case he requested for a passover which was not granted and the arguments were heard by a single judge who pronounced the order. This, he has claimed, is against the principle of natural justice and the Impugned Order should be set aside on this account too. 11. The Ld. Counsel for Respondent no. 1 has argued that the transactions between the Appellant and the Respondent no. 1 have been maintained as a running account wherein the Respondent no. 1 has supplied a total of 834 GPS vehicle trackers pursuant to the MOU dated 21.05.2013 for the HPFS project. He has contended that the last supply was of 30 vehicle t....
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.... Tax Invoices bearing No. 1016 dated 16.03.2015, No. 1017 dated 16.03.2015 and No. 1122 dated 14.12.2015 for 30 nos. vehicle trackers. He has claimed that the acknowledgement of 804 GPS vehicle trackers by the Corporate Debtor implies that the Respondent no. 1 (Operational Creditor) was aware that the total amount claim raised by the Respondent no. 1 was for an amount of Rs. 53,99,228/- and not Rs. 50,32,028/-. Further he has claimed that the attached statement of account sent by the Corporate Debtor in email dated 15.10.2015 for review by the Operational Creditor acknowledges purchase and supply of 804 vehicle trackers. Therefore, the claim of the Appellant of the existence of different amounts of operational debt in the demand notice and the application under section 9 of IBC, 2016 is devoid of any merit. He has denied being in any discussion of settlement with the Corporate Debtor and has not accepted Rs. 3,67,200/- as settlement amount from the Corporate Debtor. 13. We have perused the status report regarding the progress of the Corporate Insolvency Resolution Process (hereinafter called CIRP) submitted by the Interim Resolution Professional. The main points to be noted from t....
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....reditor are "Operational Debt" as per the definition of "Operational Debt" as per the in Section 5(21) of IBC 2016, which is reproduced below:- "5. Definitions:- (21) "operational debt" means a claim in respect of the provision of goods or services including employment or a debt in respect of the [payment] of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority." 17. The various columns of Form 3 (prescribed under Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016) in which the Operational Creditor has to serve notice to the Corporate Debtor require mention of the amount of debt, date of default and documents to be attached to the application to prove the existence of operational debt and the amount of default. In this light a perusal of the Demand Notice dated 20.11.2018 sent by the Operational Creditor (Respondent No. 1) as required under Section 8 of the IBC, 2016 shows the total amount of debt as Rs. 50,32,028/- in Column 1 of the notice which is payable to the Operational Creditor by the Corporate Debtor for supply and installation of 804 vehicle....
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....s from the date of delivery of the notice or invoice demanding payment under subsection (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub-section (2) of section 8, the operational creditor may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process. (2) The application under sub-section (1) shall be filed in such form and manner and accompanied with such fee as may be prescribed. (3) The operational creditor shall, along with the application furnish-- (a) a copy of the invoice demanding payment or demand notice delivered by the operational creditor to the corporate debtor; (b) an affidavit to the effect that there is no notice given by the corporate debtor relating to a dispute of the unpaid operational debt; (c) a copy of the certificate from the financial institutions maintaining accounts of the operational creditor confirming that there is no payment of an unpaid operational debt by the corporate debtor; if available; (d) a copy of any record with information utility confirming that there is no payment of an unpaid operational....
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....ount statement for review. A conjoint reading of Sections 8 and 9 of the IBC makes it incumbent on the operational creditor to show the amount of debt in default and the date of default clearly and should also provide credible proof about the purchase and supply of goods and services as claimed. Hence the operational creditor's claim of debt of Rs. 50,32,028/- and default in payment of the cost relating to supply and installation and managed professional services is not established as required in Sections 8 and 9 of the IBC. 21. The Operational Creditor has also mentioned supply of 30 nos. GPS vehicle trackers vide purchase order dated 12.12.2015 issued by the Corporate Debtor. He has mentioned this as a second debt of supply and installation of 30 nos. GPS vehicle trackers. He has produced the purchase order, supply and installation of 30 nos. Hippo GPS vehicle trackers as part of ongoing business transactions between the Corporate Debtor and the Operational Creditor. The Corporate Debtor, in his reply dated 03.12.2018 to the Demand Notice, has accepted placing purchase order of 30 nos. GPS vehicle trackers and receiving the supply. Since the Corporate Debtor has accepted the sup....