TaxTMI 
TaxTMI 
2020 (10) TMI 489
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....Corporate Debtor, which operates an e-commerce service under the name of Industrybuying.com. In accordance with the above LOI, the Operational Creditor was providing manpower to the Corporate Debtor for order processing and operation services with respect to the Corporate Debtor's warehouse at Plot No. 113, Village Bamnoli, New Delhi-110077. ii. The Corporate Debtor started defaulting in making payments against the invoices raised by the Operational Creditor, in lieu of the aforementioned services rendered by it, starting from the June, 2017. That between the month of May, 2017 to November, 2017 total amount for which invoices were raised by the Operational Creditor amounts to Rs. 1,02,69,753/-, out of which payment of a total amount of Rs. 46,00,000/- was made by the Corporate Debtor against few of those invoices, without mentioning the corresponding invoices. The net payable amount to the Operational Creditor, as on date after all adjustments, is Rs. 74,10,533/- only, along with interest of 18% p.a.. iii. A demand notice as per Form 3 under Section 8(1) read with Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, was....
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....mployees at Respondents work place which caused a great loss of business to Respondents. Further, due to Applicants mismanagement and lack of proper security there was theft at godown of Respondent which caused to Respondent a loss of about Rs. 92,00,000/-. vi. The Respondent always insisted to the Operational Creditor that the Respondent shall pay all their legitimate due only after the Operational Creditor will submit: 1. Proper bills 2. Subject to warehouse compliance 3. Signature and Agreement on terms of engagement between Emtex &Gtrans 4. Proof of deposit of ESI / PF to employees. 5. Proof of cost However, such documents were never given by G-tans, when Respondent insisted on these before payment they would call a strike and shut down the warehouse until Respondent paid what they demanded. vii. That the petition is not maintainable and has been filed with ulterior motives. The Operational Creditor by means of this petition, trying to bypass the civil remedies available to them and wants to recover the alleged amount from the Corporate Debtor without establishing the dues. 4. The Operational Creditor has filed r....
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....o provide the best possible services to the Respondent. v. That delay in the performance of work, if any, cannot be solely attributed to the Applicant as the job of the Applicant was only to pack the material supplied by the Respondent and handover the same to the concerned logistic company. As such, on several occasions, the work got delayed as a result of late supply of packaging material to the Applicant or late supply of material to be packed and handed over to the logistic company. Further, vide e-mail dated November 1, 2017, the Respondent wrote an appreciation e-mail to the Applicant praising its achievement for the month of October, 2017. vi. Further the action of the Respondent directly paying salaries to workers, who were employees of the Applicant, was to tactfully avoid paying the Applicant, its legitimate dues, which further shows that the invoice raised by Applicant were due and payable. vii. Further, the malafide intention of the Respondent is clear from its statement that it availed services of the Applicant only for a month. The said allegation can be falsified on its face by the e-mail of the Respondent to the Applicant issued in the mon....
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....r submitted that there is a pre-existing dispute as defined under Section 5(6) of the IBC, 2016. He further submitted that LOI which the Operational Creditor has enclosed at page 24 to 27 was valid for only one month with the provision of entering into definitive agreement, within the said one month by the parties but no final agreement was entered. Therefore, there was no agreement with the Operational Creditor. He further submitted that as per the oral agreement between the parties, the Operational Creditor was entitled for cost + management fee / service charges of 10 % and the Operational Creditor was under contractual obligation to submit invoices with supporting document to substantiate actual cost. He further submitted that by filing rejoinder, the Operational Creditor admits that the Operational Creditor did not comply with the PF and ESI law. Therefore, the Corporate Debtor being the principal employer have every right to ask for proof of PF and EFIC compliance which the Operational was required to comply. 8. He further submitted that at page 7 of the reply, the Corporate Debtor has raised the dispute which is prior to the issuance of demand notice which would also been....
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....ayment] operational debt in respect of which the default has occurred." "Section 9: Application for initiation of corporate insolvency resolution process by operational creditor. - (1) After the expiry of the period of ten 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 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 instit....
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....corporate insolvency resolution process shall commence from the date of admission of the application under sub-section (5) of this section." 11. Mere plain reading of the provisions contained under Section 8 & 9 of the Code shows that on the occurrence of a default, the operational-creditor is required to deliver a demand notice of unpaid operational debt or copy of the invoice demanding payment of the amount involved in the default to the Corporate Debtor in such form and manner as may be prescribed and the Corporate Debtor after the receipt of the demand notice or copy of the invoice mentioned in Section 8(1) of the Code, within ten days of the receipts of the notice bring to the notice of the operational-creditor the existence of disputes or show the documents that the payment of unpaid operational-debt has been made. Section 9 makes it clear that after the expiry of period of ten days, from the date of delivery of the notice or invoice demanding payment, if the Operational Creditor does not receive payment from the Corporate Debtor or notice of the dispute under Section 8(2) of the Code, only in that case the Operational Creditor may file an application for initiation of the....
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....he reply to the application, filed on behalf of the operational-creditor and this has also been held by another NCLT, Delhi Bench in the case of M/s. Jai Laxmi Traders v M/s. Mayasheel Retail India Ltd. IB-2184/(ND)/2019. 14. For the reasons discussed above, we are of the considered view that in view of Section 9(5)(i)(a) since the application is complete, there is no payment of unpaid operational debt, which is more than Rs. 1 Lakh, which is the minimum threshold U/S 4 of the Code for initiating a proceeding U/S 9 of the Code and no notice of dispute as required U/S 8(2) of the Code is raised by Corporate Debtor. Therefore, we think it is proper to admit the application. 15. Accordingly, this petition is ADMITTED. A moratorium in terms of Section 14 of the IBC, 2016 shall come into effect forthwith staying:- (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgement, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debt or any of its assets or any legal right or ben....