TaxTMI 
TaxTMI 
2019 (12) TMI 1382
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....as in Synopsis filed by the Petitioner, are as follows: (1) Mr. Rahul Wadhwa (hereinafter referred to as 'Petitioner/Operational Creditor') is a resident of PIP Flat No. 112, Princeton Estate, DLF Phase-5, Gurgaon and he is inter alia engaged in the business of providing marketing and promotional services including of alcoholic beverages and liquor products. (2) M/s. Amrut Distilleries Private Limited (hereinafter referred to as 'Respondent/Corporate Debtor') is a Private Limited Company incorporated on 14.09.1972, under the Companies Act, 1956 with CIN: U51101KA1972PTC002246 and having its Registered Office situated at 7th Floor, JNR City Centre No: 30, Raja Ram Mohan Roy Road, Sampangirama Nagar, Bangalore-560027. Its Nominal Share Capital is Rs. 10,00,00,000/- (Rupees Ten Crores Only) and the Paid-up Capital is Rs. 6,20,00,000/- (Rupees One Crore Two Lakh Fifty Thousand and Ten Only). The Company is engaged in the business of manufacturing and processing of alcoholic beverages and liquor products. (3) It is stated that the Corporate Debtor and the Operational Creditor entered into an Agreement on 14.07.2015, under which the Operational ....
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....rse of transaction, Operational Creditor used to raise debit notes upon the Corporate Debtor in respect of the expenses incurred and the commission due and payable under the Agreement towards the sale effected. (6) Accordingly, the Operational Creditor has made investments of Rs. 30,03,874/- during the period 2015-16, Rs. 84,94,573/- during 2016-17, Rs. 56,57,803/- during 2017-18 and Rs. 3,60,000/- during 2018-19 towards sale commissioning, loading/unloading, office expense, trade scheme, special scheme, etc. (7) It is stated that, as per the Agreement, the Operational Creditor was also required to collect the dues under the invoices from the buyers and send the proceeds in respect thereof to the Corporate Debtor. The Operational Creditor performed the aforesaid obligation dutifully and remitted the aforesaid amounts to the Corporate Debtor. The Operational Creditor informed the Corporate Debtor regarding the expenses incurred in the process of performing the Agreement for the period 2015-16, 2016-17, 2017-18 i.e. towards marketing and sale of products and collection of dues. The Operational Creditor further informed the Corporate Debtor regarding the amount which....
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....; Total (II) 28,56,278/- Total (I + II = B) 84,94,573/- 2017-18 S. No. Particulars Amount (Rs.) 1. Stock Sampling FOC Bottles Debit Note 14 62,520/- 2. Stock Sampling FOC Bottles Hotel Leela Debit Note 13 32,000/- 3. Salary for Accounts for the year 2017-18 April 17 to March 18 Debit Note 12 1,20,000/- 4. Special Discount Commission for the year 2017-18 Debit Note 11 2,19,066/- 5. Stock Lifting for Personal used taken by Company 2017-18 24,200/- 6. Discount on Maqintosh Super 375 ML Debit Note 9 5,25,906/- 7. Godown Rent for the year of 2017-18 Debit Note 8 6,00,000/- 8. Agency & Freight Charges for the year of 2017-18 Debit Note 7 1,19,330/- 9. Misc. Expense for the year of 2017-18 Debit Note 6 3,20,000/- 10. Branding Spirit Magazine Debit Note 5 23,856/- 11. ....
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....e Corporate Debtor states that the contractual relationship between the parties expired during 2016-17, and on the other hand, it has relied on emails addressed by it in the month of August 2017 to the Operational Creditor in relation to determination of sales targets. The said emails clearly disclose that the Operational Creditor was acting as the marketing agent of the Corporate Debtor. (11) The Corporate Debtor in the reply, clearly as an afterthought has averred that it shall institutes civil and criminal proceedings against the Operational Creditor, which itself establishes that no such proceeding was pending, prior to the issuance of Demand Notice for any alleged act/omission of the Operational Creditor. Further, bald averments have been made in the reply that dues have been reimbursed in the bank account of the Operational Creditor, however no documentary evidence has been placed on record by the Corporate Debtor. Therefore, the reply in question is clearly an attempt to create a dispute, which otherwise neither exists nor is supported by any evidence. He has relied upon the judgment of Hon'ble Supreme Court in Mobilox Innovations Private Limited v. Kirusa Softw....
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....ons of Arbitration & Conciliation Act, 1996 or any statutory modification or re-enactment thereof for the time being in force. The language used in the Arbitration proceedings shall be English. The venue of Arbitration shall be Bangalore." (3) The instant claim is also barred by laches and limitation. As per Section 238A of the Code, the provisions of the Limitation Act, 1963 is applicable to proceedings before the Adjudicating Authority. Under the Limitation Act, Article 137 is attracted to applications filed u/s 9 of the Code. Article 137 of the Limitation Act, period of limitation is 3 years from the date on which the right to apply accrues. The Respondent has relied upon the judgment of Hon'ble Supreme Court in the case of BK Educational Services Private Limited v. Parag Gupta (2018 SCC OnLine SC 1921). (4) In the instant case, a substantial part of the claim/costs incurred accrued in the year 2015 and the present Insolvency Petition was filed in January 2019. Accordingly, a substantial part of the claim has to be prima facie dismissed as barred by limitation. Further, in relation to the claims arising in the year 2016-17, the claim is seriously in dispute. Pursuan....
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....ion, transportation expenses, promotional expenses shall be made in respect of quantity of Respondent's products actually sold and invoiced from Respondent's godown after full proceeds in respect of the corresponding invoices has been received by the Respondent and in cases for transportation charges and promotional charges actually incurred, payment by Respondent shall be further subject to submission of documentary proof of expenses actually incurred (Clause 4(f)). (6) It is contended that the Petitioner was also authorized by the Respondent to represent the Respondent and invoice retailers and wholesalers on behalf of the Respondent. It is contended that for the year 2015-16, the Petitioner requested for 460 cases. The Respondent supplied the requested amount of cases. Upon supplying the cases, the Respondent invoiced for the supply of the cases at the agreed rates. The Petitioner managed to sell all the cases it requested for in the year 2015-16. Upon selling all the cases, as per the terms of the Marketing and Promoter Agency Agreement, the Petitioner collected all the dues from various retailers and distributors. After collecting the money, the Petitioner adj....
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....titioner is false and made with the sole intention to mislead the Adjudicating Authority. (10) It is alleged that since the Petitioner had consistently failed to promote and market the Respondent's products effectively, the Respondent discontinued its relationship with the Petitioner. Accordingly, it did not ask the Petitioner to renew the Respondent's licence for the year 2017-18. However, the Petitioner on his own accord, without seeking the consent of the Respondent, renewed the licence for the year 2017-18. The Respondent did not supply any fresh stock for the year 2017-18 and the Petitioner managed to sell only some of the remaining stock left over from the previous year. The Petitioner could only sell 310 cases out of the remaining 1570 cases. Accordingly, 1260 cases of stock were still left unsold. The Petitioner applied for return of the stock and managed to retrieve a portion of the unsold stock. However, the Respondent was forced to handover/surrender some of the cases of stock to the excise department, thereby causing financial loss to the Respondent. (11) It is alleged that due to abject failure of the Petitioner, the Respondent was forced to w....
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....the Company is a solvent Company having more than 700 employees and its turnover for the Year 2018-19 is Rs. 275,65,65,778/- (Rupees Two Hundred and Seventy Five Crore Sixty Five Lakh Sixty Five Thousand Seven Hundred and Seventy Eight Only) and the provisions of the Code cannot be invoked for recovery of the dues, without exhausting the remedies available under the Agreement dated Nil. The Respondent expressed its willingness to submit to Arbitration, if the Petitioner invokes the issue for arbitration, in order to resolve the issue once for all. He has insisted that the facts and circumstances establishes that there is pre-existing dispute for the belated claim made on frivolous grounds. He therefore, has urged the Adjudicating Authority to dismiss the petition. 7. Though the case was filed in the Tribunal on 3rd January 2019 and started listing it before the Tribunal starting from 23.01.2019, the case was adjourned on several occasions at the request of parties, on ground or the other and to also afford opportunity for the parties to explore the possibility of settlement of the issue, on finding that there are several legal impediments/lacunas in the Petition to initiate CIRP....
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....er got issued the Statutory Demand Notice in question only on 11.10.2018. The Petitioner has not explained to the satisfaction of Adjudicating Authority as to how he is entitled for the amount, as per Agreement in question, since the Petitioner is entitled for payment in proportion to amount received by the Respondent and for the delay-in initiating recovery proceedings before these proceedings. As stated supra, in pursuance to statutory Demand Notice dated 11.10.2018 issued by the Petitioner, the Respondent, in turn, has issued a detailed reply by inter alia contending as follows: (1) The Agreement in question was for fixed period of 2015-16 and 2016-17 and the amounts due as per Agreement were duly reimbursed into the Account of Petitioner under his acknowledgement. And subsequent to period of 2016-17, he was not having authority to deposit any amount and then claim on it. In fact, the Respondent is entitled for an amount of Rs. 82,08,389.88/- for failure to achieve targets fixed through email dated 28.03.2017 wherein targets were reduced from 26,000 cases to 20,000 cases during the meeting held with him and his partners Gagan Wines and others. And thus they are conte....