TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 436
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....mputer Junction Pvt. Ltd.' (in short 'CJPL') under Section 9 of the Insolvency and Bankruptcy Code, 2016 (in short 'IBC') against the Corporate Debtor Nysa Communications Pvt. Ltd. (in short 'NCPL'). 2. In brief, the facts of the case are that a Facilities Agreement was signed between Computer Junction Pvt. Ltd. and Nysa Communication Pvt. Ltd. effective from 25.05.2018 for a period of three years. According to this agreement NCPL obtained end to end infrastructural support and laptop servers for the work relating to booking and facilities at examination centres from CJPL with their partner Testpan India Pvt. Ltd. This agreement was entered into by the parties in connection with a contract obtained by NCPL from the Indian Council of Agriculture Research (in short 'ICAR'). The scope of work of CJPL/Operational Creditor covered activities which included providing DVR facility for recording the examination proceedings at each centre along with CCTV cameras, with Nysa designated manpower responsible for taking backup of recordings from these locations in server or any other medium provided by Nysa. The Facility Agreement also provided that 'in case CJPL /Testpan does not provide any o....
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....n receipt of notice in Section 9 application both the Applicant and the Respondent/Corporate Debtor appeared before the Adjudicating Authority on 11.03.2020, but on the next date of hearing on 24.03.2020 no hearing could take place due to 'lockdown' imposed as a result of Covid-19 pandemic. After a long gap, the case was listed on 01.12.2020 when no one from either party appeared and the petitioner was directed to intimate the date of hearing to the respondent and file an affidavit of service. Thereafter, the case was listed and heard on 18.01.2021 when only the Ld. Counsel for the Applicant/Operational Creditor appeared but since hearing could not take place, the case was re-notified on 31.03.2021 and again on 26.02.2021 and later on 31.03.2021. He has stated that the case could not be heard on the appointed dates and was again re-notified on 14.04.2021, 26.04.2021 and 26.07.2021. The matter was again listed on 06.09.2021 and on this date the Adjudicating Authority ordered that the Respondent be proceeded ex-parte since no one appeared on behalf of the Respondent on this date. On this date the Adjudicating Authority also ordered that a copy of the order be served on the Corporate ....
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....of appeal paper book) which was forwarded to the Operational Creditor for providing the CCTV footage for Centres No. 1408, 1427 and 1428 amongst others. Regarding the flaws and deficiencies in services, he has elaborated that in particular the facilities agreement required that CCTV cameras be installed at the examination centres and recording of footage be maintained and saved which had to be provided to the Corporate Debtor but this was not done by the Operational Creditor. He has further argued that despite painstaking efforts by the Corporate Debtor, the CCTV footage could not be obtained since the Operational Creditor did not install the required hardware of CCTV cameras at many venues and at some places where such cameras were installed the CCTV footages were deleted in haste, and as a result the ICAR terminated the contract with the Corporate Debtor vide letter dated 30.07.2018 (attached at pp. 78-80 of appeal paper book). He has also claimed that the responsibility regarding maintaining CCTV footage and other arrangements at the examination centres was entirely upon the Operational Creditor in accordance with clauses 3(iii)(c) and 3(vi) of the Facilities Agreement, which it....
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....R is defined in the scope of services provided in the facilities agreement dated 30.05.2018 and certain responsibilities were upon the corporate debtor. He has further submitted that the Respondent No. 1 perform its part of the agreement fully and the Appellant even after receiving due services from the Operational Creditor and acknowledging the same failed to make payments against duly raised invoices w.e.f. 10.08.2018. In this manner, he has submitted that a total amount including principal and interest of Rs. 3,54,54,483.49/- was payable to the Respondent No. 1 by the Appellant and the Respondent No. 1 sent a demand notice under section 8 of the IBC which was delivered to the Appellant on 27.12.2019. He has further argued that in reply to the said demand notice the Appellant has raised false, vexatious dispute in order to avoid due and just payment to the Respondent No. 1. 11. The Ld. Counsel for the Respondent No. 1/Operational Creditor has also submitted that the dispute raised by the Corporate Debtor in his reply to the demand notice sent under Section 8 of IBC is a sham and imaginary dispute. He has contested the claim of the corporate debtor that the amount of invoice No. ....
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....or serving notice to the Corporate Debtor vide all modes. Thereafter, the matter was listed on 11.03.2020 when it could not be taken up due to paucity of time and renotified on 24.03.2020. Since 'lockdown' was imposed due to Covid-19 pandemic on 24.03.2020, the matter was next listed on 01.12.2020 when there was no appearance on behalf of the Corporate Debtor and the Petitioner/Applicant was directed to file affidavit of service within a week. Again when the matter was taken up on 18.01.2021, there is no mention in the order sheet at Pg. 106 of appeal paper book whether any service was affected on the Corporate Debtor nor submission of affidavit of service. The matter was renotified on 23.02.2021, 26.02.2021, 31.03.2021, 14.04.2021, 26.04.2021 and 26.07.2021 when no proceedings took place except that the matter was renotified for the next date. The matter was taken up on 06.09.2021 and the following is recorded in the concerned order of the Adjudicating Authority:- "Ld. Counsel for the Appellant states that the Corporate Debtor had appeared on 11.03.2020 and thereafter, intermittently but has not filed the reply. None appeared for the respondent. Today also none appears for the....
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....the documents placed on record, this Bench observes that although, the Corporate Debtor has disputed its liability, however, there is nothing annexed with the notice of dispute dated 15.01.2020, which could suggest that there was a dispute existing, prior to the issuance of the demand notice. Further, we find no explanation given by the Corporate Debtor in its notice of dispute as to how the debt claimed by the Operational Creditor is not an operational debt." 17. The above-stated inference of the Adjudicating Authority presumes that an opportunity was granted to the corporate debtor to file reply and also that it had occasion to submit representation for granting time to file reply after the ex-parte order. On this basis the Adjudicating Authority decided to proceed ex-parte against the corporate debtor vide order dated 06.09.2021. As stated in this Judgment earlier, there is no document submitted to show that in compliance of this order, the Corporate Debtor was communicated the order dated 06.09.2021. In such an event we find that the recording by the Adjudicating Authority in para 10 of the impugned order that opportunities were provided to the Corporate Debtor to make represe....
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.... reject the application." 20. The Judgment of Hon'ble Supreme Court in the matter M/s Innoventive Industries Ltd. Vs. ICICI Bank & Anr. (Civil Appeal No. 8337-8338 of 2017) filed by the Ld. Counsel for the Respondent No. 1 primarily points out the difference between section 7 and section 9 applications and how they should be dealt with. It also, inter alia, lays down that in case a real dispute which is not spurious, is found to exist before the issue of demand notice under section 8, it is sufficient to reject the section 9 application. 21. In the result, we find that the Adjudicating Authority gave an opportunity to the Corporate Debtor against whom the matter was proceeded ex-parte to appear before the Adjudicating Authority and present his case vide order dated 06.09.2021, but there is no record submitted by the parties to show that in compliance of the order dated 06.09.2021 the order was served on the Corporate Debtor. In the light of such deficiency, and also the issues raised by the Ld. Counsel for the Appellant that there was pre-existing dispute mentioned in his reply to the demand notice dated 15.01.2020, and also that in case the Corporate Debtor had been provided suf....