TaxTMI 
TaxTMI 
2022 (6) TMI 1332
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....ed on 06.12.1993 with CIN: U85110KA1993PLC015001 having its registered office at K.M. Road, Chikmagalur - 577101, Karnataka. The Authorised Share Capital of the Respondent/Corporate Debtor is Rs. 2,35,48,60,635/- and the Paid-Up Share Capital is Rs. 19,15,00,000/-. 3. The amount claimed to be in default is Rs. 1,75,73,690/- (Rupees One Crore, Seventy Five Lakhs, Seventy Three Thousand, Six Hundred and Ninety only). 4. It is stated that the Corporate Debtor, Coffee Day Global Limited was intending to launch a digital application called the "CCD Mobile App" for its customers, and in this regard, had engaged the services of the Company known as Fourthlion Technologies Private Limited vide the Agreement for Digital Application Development Services dated 05.05.2016. On 4th June 2018, an Addendum was executed to the Digital Application Development Services Agreement dated 5th May 2016. This Addendum was however executed between the Corporate Debtor and the Operational Creditor First Walkin Technologies Pvt. Ltd., since the Operational Creditor is the assignee of the rights and liabilities of M/s. Fourthlion Technologies. Pvt. Ltd. under the Digital Application Development Services ....
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....te received from the Corporate Debtor. 9. The Petitioner/Operational Creditor in support of the C.P. averments has enclosed the following documents among other documents, to the C.P.: i. True Copy of the Agreement for Digital Application Development Services executed between the Corporate Debtor and Fourthlion Technologies Pvt. Ltd. dated 05.05.2016. ii. True copy of the Addendum dated 4.06.2018 to the Agreement for Digital Application Development Services executed between the Operational Creditor and Corporate Debtor iii. True copies of the Invoices for the period between 04.02.2019 to 10.02.2020 against payment owing to the Operational Creditor from Corporate Debtor. iv. Email Communications dated 19.03.2020 and 27.03.2020 in which the Corporate Debtor acknowledged that is liable to make payment to the Operational Creditor against the invoice. v. True copy of the legal notice dated 13.08.2020 issued on behalf of the Operational Creditor to the Corporate Debtor. vi. True copy of the demand notice dated 04.09.2020 issued by the Operational Creditor to the Corporate Debtor. vii. True copy of the reply dated 03.10.2020....
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....e discussions, the Respondent, the Petitioner and the Fourthlion Technologies Private Limited executed the Agreement for Digital Application Development Services dated 05.05.2016 for developing a consumer mobile application. In terms of the agreement, Fourthlion was to develop a digital application, the CCD Mobile App to provide better customers experience as well as digital wallet that would enhance the customers' payment experience. Fourthlion was to develop the CCD Mobile App within 18 months from 01.01.2016 i.e., on or before 01.07.2017. The CCD Mobile App was to be developed for use on all operating systems including Android and iOS (Apple Operating system) with a distinct sources code for both operating systems. iii. After execution of the agreement, Fourthlion claimed to have assigned all its rights and interests' under the agreement in favour of its subsidiary, the Petitioner. The Respondent does not have any knowledge or custody of the agreement/documents effecting such an assignment. However, at the request and insistence of Fourthlion that such assignment had taken place, the Respondent along with Fourthlion and the Petitioner executed the Amendatory Agr....
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....o make any substantial progress on the above tasks even as on 20.04.2017. viii. Despite being repeatedly called upon to perform the various tasks and provide updates as to the status of the same, the Petitioner failed and neglected to do so. Although agreed upon term/timelines under the Agreement and Amendatory Agreement were set to expire imminently, the Petitioner miserably failed to perform its obligations under the Agreement. The Petitioner's failure to adhere to the agreed upon timelines is evident from the various emails exchanged between the parties. In addition to the Petitioner's failures, the Petitioner also failed to adhere to or service the Respondent's requirements. Various essential features required by the Respondent and agreed to by the Petitioner, were either omitted without informing the Respondent or were otherwise incomplete and rendered unusable. By way of illustration, some of the various shortcomings in the CCD Mobile app, on account of the Petitioner's failure to adhere to the Respondent's specification are set-out at Page 8, Para 6.3 of the reply filed by the Respondent. ix. In light of the Petitioner's failure to a....
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.... Mobile App, the Respondent decided to have the same permanently removed from Google Play Store and Apple App Store at the earliest. In this regard the Respondent requested the Petitioner to identify users having balance beans in their respective accounts so that current users could be informed of CCD Mobile App's scheduled removal and appropriate measure could be taken to compensate such users. Despite repeatedly being called upon to provide such details, the Petitioner failed and neglected to do so which severely affected the Corporate Debtor's market reputation and footfalls. xv. The Respondent was also constrained to approach third parties to setup and maintain the progressive web app thereby requiring the Respondent to incur an additional cost and resultant losses. The said facts clearly demonstrate the deficiency in the services rendered by the Petitioner and the dysfunctional application that was developed. The Petitioner and Fourthlion were focussed only on receiving payments and completely neglected the CCD Mobile App and the Progressive Web App including its functionality. xvi. Despite termination of the Agreements and arrangements between the pa....
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....he then Chairman of the Plaintiff company, since they, were in financial constraint and so many creditors moved the Hon'ble' NCLT to declare the company as insolvent. The present suit is filed to show that a dispute is pending, so that the defendants will not being a position to get declaration regarding insolvency of plaintiff's company. According to learned counsel for the defendant, the present suit is used as a tool to escape from insolvency notice issued under Section 8 of IBC and to bring to the notice of the Hon'ble NCLT, that dispute is pending and therefore, the plaintiff company cannot be declared insolvent.... Further, the cause of action of filing the suit as shown in para No. 32 is that the despite, termination of the agreement the defendants shall failed to act in accordance with its obligation and fail to return/delivery/hand over all confidential information and source code contained in the CCD Mobile App and withholding confidential information and trying to arm twist the plaintiff etc., is only a created for the purpose of the present suit. Infact, having admitted the claim, having appreciated the service rendered by the defendants, conduct of the ....
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....ent costs were fixed at INR 20,00,00,000/- of which INR 16,00,00,000/- was payable to the Petitioner and Fourthlion, the Petitioner has, till date, made payments approximately INR 22,32,51,791/- in favour of the Petitioner and Fourthlion. The Petitioner and Fourthlion have on several occasions raised invoices on false pretexts thereby unjustly enriching themselves. Having paid amounts in excess of INR 16,00,00,000/- no further sums are either due or payable by the Respondent and any claims much less those alleged in this regard are false, vexatious and untenable. xxiv. The Respondent is a healthy going concern having monthly turnover of approximately INR 50 crore and over 7,000 employees across the country. As such, there exists no reason whatsoever to subject the Respondent to CIRP. Even otherwise, the application under reply, albeit clothed as an application to initiate CIRP, is nothing but a means to recover sums allegedly due to the Petitioner. 11. The Respondent/Corporate Debtor also filed the additional statement of objection stating that the Petitioner filed an I.A. in Com.O.S. No. 229 of 2021 on 29.10.2021 Under Order XIV Rule 5 of the Code of Civil Procedure, 1....
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....353 ii. K. Kishan v. Vijay Nirman Company Private Limited, (2018) 17 SCC 662 iii. Kay Bouvet Engineering Limited v. Overseas Infrastructure Alliance (India) Private Limited (2021) 10 SCC 483 iv. Brand Reality Services Limited v. Sir John Bakeries Private Limited, CA (AT) (Ins.) No. 958 of 2020 NCLAT Principal Bench. 13. In response to the objections of Respondent, the Petitioner has filed its rejoinder inter alia stating as follows: i. It is stated that by way of emails dated 06.04.2017, it was specifically agreed between the parties that the Operational Creditor will provide a timeline for completion of the Snack Vending Machine task based on the priority list shared by the Corporate Debtor. The priority list was only shared with the Operational Creditor by the Corporate Debtor vide email dated 06.04.2017 and the tasks were commenced on a immediate basis by the Operational Creditor and were completed in accordance with the time schedules agreed to for these tasks. Infact, Mr. Rahul Shetty had issued an email dated. 20.04.2017 informing the Corporate Debtor that substantial progress has been made regarding the Google analytics integration and ....
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....alleged to be outstanding as per the table produced by the Operational at Annexure A2 to the application are based on the invoices raised by the Operational Creditor for providing services in relation to developing and maintain the CCD Mobile App. All these invoices have been accepted by the Corporate without demur. Further, senior officers of the Corporate Debtor have vide email dated 09.03.2020 and 27.03.2020 admitted and acknowledged that payments are due from them to the Operational Creditor. These are clear proof that there is an acknowledgement of debt by the Corporate Debtor that payments are pending to the Operational Creditor and its parent entity. vii. It is stated that several other creditors of the corporate Debtor have also approached the Hon'ble Tribunal seeking to initiate insolvency proceedings against the Corporate Debtor is evident from its financial statements. The Operational Creditor has exercised its statutory right u/s. of the IBC and in respect of due and acknowledged outstanding payment under 12 invoices raised on the Corporate Debtor between 04.02.2019 and 10.02.2020 for an amount of Rs. 1,75,73,690/-. 14. Heard Shri Pramod K. Nair, Learned....
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....dent while drawing our attention to the very same Annexure-A6 reconciliation statement dated 27.03.2020 more particularly to the last sentence of the said Annexure-A6 which reads as "This is under negotiation/Dispute", submits that there were disputes and the same were continued even after 27.03.2020. The Respondent further placed reliance on their reply dated 03.10.2020 (Annexure-A9) to the first and discarded demand notice dated 04.09.2020 of the Petitioner to substantiate the pre-existing dispute between the parties. The relevant para of the said Annexure-A9 dated 03.10.2020 reads as under: "9. Without prejudice to the aforesaid, the alleged amount claimed by your client, as an operational debt, is under a pre-existing dispute between our client and your client. Even otherwise, our client unequivocally denies that any amount of whatsoever quantum is due or payable to your client. In fact, our Client has, in the past, pointed out several deficiencies in the alleged services provided by your client. This has led to disputes between the parties, which are alive and subsisting. These disputes have existed much prior to September 4, 2020 and are outline below: 9.1. ....