TaxTMI 
TaxTMI 
2021 (2) TMI 1090
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....filed by Saurav Keshan (proprietor of M/s. Inspired Traveller) (Respondent-1 in the present appeal) against Katalist View paper Private Limited (represented by the Resolution Professional Respondent No. 2 in the present appeal). 2. The Appellant is an erstwhile Director of Katalist View paper Pvt. Ltd.(Corporate Debtor) which is a company registered under the Micro, Small and Medium Enterprises Act, 2006. Saurav Keshan (Respondent No.1) is proprietor of the firm Inspired Traveller (Operational Creditor), which is engaged in, among other things, designing advertisements and producing video films. 3. The Appeal claims and it is argued that the Corporate Debtor/Katalist View paper Pvt. Ltd. (Katalist in short) had limited role of an intermediary between Respondent No. 1/Operational Creditor Saurav Keshan the Proprietor of Inspired Traveller and Group M Media Pvt. Ltd. It is claimed that Operational Creditor was engaged by Group M for design of Advertisements for launch of a Product of HUAWEI Technology Pvt. Ltd. (Honor in Short). Corporate Debtor was engaged only to give digital and documental support to Group M and to issue purchase orders on behalf of Group M and to route payments....
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....ices issued by Operational Creditor vide dates 07.03.2018, 13.6.2018, 16.10.2018 and 18.1.2019 (attached on pp 41-44 in the Appeal Paper Book) have been accepted for payment by Corporate Debtor Katalist View paper Pvt. Ltd. He has given details of TDS deposited by the Operational Creditor Saurav Keshan in the name of Corporate Debtor as Deductor(attached on pp 45-48 of the Appeal Paper Book). He has also placed reliance on the Balance Sheet filed by the Corporate Debtor for the year ended 31.3.2019 and Statement of Profit and Loss for the year ended 31.3.2019, wherein Saurav Keshan (proprietor of Inspired Traveller) the Operational Creditor has been shown as the creditor for an amount of Rs. 25,32,852.00 (page 25 of reply of Respondent No.1). He has also stated that the trail of e-mails exchanged between various parties, which have been referred by the Corporate Debtor to show that he was in a Principal-Agent relationship (Katalist as Agent and group M as Principal) are being built up as an afterthought by Katalist to escape from its liability for clearing pending debt as Corporate Debtor. Learned Counsel referred to Appeal Para7 (e) to state that it is admitted position that there....
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....aim of operational debt of the Operational Creditor Inspired Traveller. 9. There are two issues that are germane to this appeal that should to be examined. These are :- (i) Whether Katalist View paperPvt. Ltd. is the Corporate Debtor and Inspired Traveller (proprietor Saurav Keshan) the Operational Creditor with regard to the designing of advertisement and allied services provided? (ii) Whether any real dispute exists regarding the operational debt between the corporate debtor and operational creditor prior to the filing of application by the Operational Creditor under Section 8 of the IBC? 10. In order to examine point (i) of the aforesaid paragraph 9, it is useful to review purchase orders, invoices, TDS certificates and e-mails exchanged between Operational Creditor Group M, Honor and the Corporate Debtor between 7/6/2019 and 11/07/2019. These documents are available in the Appeal paper Book from pages 38 to 71. In addition, the demand notice issued by the Operational Creditor dated 4.12.2019 and the reply/notice of dispute dated 10.12.2019 are also seen in this context. 11. Perusal of the Record shows that: i. Respondent No.1 was given the work relating to designing ad....
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....iable to pay all the pending dues. v. Thereafter the Operational Creditor filed an application under Section 9 of the IBC before the Adjudicating Authority, which was admitted vide order dated 18.12.2020. Accordingly, CIRP was initiated against the Corporate Debtor Katalist View paper Private Ltd. along with other consequential actions as stipulated under the IBC. 12. Learned Counsel for the Appellant referred to flowchart of relationship between the various parties provided by the Appellant. The flowchart presents a very complex and complicated relationship between all the parties. No document or agreement has been presented by the Appellant to buttress its claim of any formal relationship between the parties as is being claimed in Flow Chart. More specifically no formal agreement or document has been put forth to show that there was a prior arrangement between Honor, Group M, Katalist and Inspired Traveller regarding the modality of issuing purchase orders, raising invoices and making payments for services rendered by Inspired Traveller. The judgement in Midland Overseas vs M.V. "CMBT Tana" and Ors. AIR 1999 Bom 401cited by the Corporate Debtor doesn't provide any help to him,....
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....approached other entity does not mean that it was a tripartite relationships. It was plain and straight matter. Corporate Debtor placed Purchase Order and Operational Creditor rendered service accordingly which has only been partly paid by Corporate Debtor. In absence of any formal agreement entity placing Order for services is the entity liable to pay when matter is under I&B Code, 2016. We need not decide the liability from the e-mails, like one would do in a Civil Suit. From the above discussion, it is quite evident that some dues as claimed by the Operational Creditor Inspired Travellers remained unpaid by the Corporate Debtor Katalist View paper Pvt. Ltd.This responsibility cannot be shifted or apportioned to any other party. Whatever informal and internal arrangements exist between Honor, Group M and Katalist View paper Pvt. Ltd. cannot affect or impact status of Inspired Traveller as Operational Creditor and also the relationship of Inspired Traveller with Katalist View paper Pvt. Ltd. as Corporate Debtor. 15. In the light of the discussion in the earlier paragraphs it is abundantly clear that Appellant M/s Katalist View paper Pvt. Ltd. is the Corporate Debtor and Inspired ....
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....al Creditor (between itself and Inspired Traveller) or establish pre-existing dispute as is required in Section 8 (2)(a) of the IBC to escape from the rigours of CIRP. 20. Learned Counsel for Appellant claimed that Corporate Debtor Katalist was only a routing agent for placing purchase Order and making payment. It is argued that Katalist itself did not receive any service and in the arrangement was not to get any money for acting as Routing Agent. We pointedly asked the Learned Counsel that if it was not to receive anything why was it there. Learned Counsel then tried to submit that it was only acting in social cause. We are not impressed. There is no document of Agreement to show that Katalist is Agent of Group M. Arrangement between Group M and Katalist is not relevant for Operational Creditor. Entity that placed Orders and got services rendered, must pay. It is irrelevant in the facts of the matter whether Corporate Debtor itself consumed the services or got the same for other entity. 21. In our view, there is no pre-existing dispute with regard to the services rendered and considering the purchase orders issued by the Corporate Debtor, in the absence of any documents to the c....