TaxTMI 
TaxTMI 
2023 (1) TMI 456
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....P' in short) against the Corporate Debtor. Aggrieved by this impugned order the present appeal has been preferred. 2. Making his submission, Learned Counsel for the Appellant stated that M/s Talbot & Company, the present Appellant/Operational Creditor provided a range of security services solutions to M/s Austin Distributors Private Limited, being the Corporate Debtor/Respondent. The Corporate Debtor had placed a work order on 30.09.2015 on the Operational Creditor for deployment of security guards and as per agreed terms and conditions, the Operational Creditor raised monthly invoices for payments to be made by the Corporate Debtor. 3. It has been submitted by the Learned Counsel for the Appellant that the Corporate Debtor failed to make payments for invoices raised by the Operational Creditor. The Operational Creditor issued several emails to the Corporate Debtor seeking payments of the outstanding bill but on not receiving the payments the Operational Creditor issued a demand notice under Section 8 of IBC on 26.07.2019. The Corporate Debtor replied to the demand notice on 06.08.2019 raising false and frivolous allegations against the Operational Creditor to evade payment. ....
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....is as reproduced below:- "34. Therefore, the adjudicating authority, when examining an application under Section 9 of the Act will have to determine: (i) Whether there is an "operational debt" as defined exceeding Rs. 1 lakh? (See Section 4 of the Act) (ii) Whether the documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet been paid? and (iii) Whether there is existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt in relation to such dispute? If any of the aforesaid conditions is lacking, the application would have to be rejected. Apart from the above, the adjudicating authority must follow the mandate of Section 9, as outlined above, and in particular the mandate of Section 9(5) of the Act, and admit or reject the application, as the case may be, depending upon the factors mentioned in Section 9(5) of the Act." 8. Coming to the question of whether there was an operational debt above Rs.1 lakh which had become due and payable and default in paym....
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....not been sent by any authorized signatory or any identifiable employee of the Corporate Debtor. It has been submitted that emails exchanged between the Corporate Debtor and the Operational Creditor were invariably signed by employees of the Corporate Debtor along with their names duly reflected therein. In the absence of any individual office holders name anywhere in the email of 21.05.2019, the Learned Counsel for the Respondent questioned the bonafide and legitimacy of the email and submitted that it was an act of fraud/misrepresentation by the Operational Creditor. Moreover, it was submitted that the email has been issued by the "HR-Admn Dept." of the Corporate Debtor which is not authorized/empowered to issue such admission of debt/balance confirmation. The Learned Counsel for the Respondent has therefore, emphatically asserted that this email cannot be treated as admission/acknowledgement of any liability on the part of the Corporate Debtor towards the Operational Creditor. The Learned Counsel of the Appellant, however, argued that the defence raised by the Corporate Debtor does not hold ground since the email originated from the same email address as reflected in the Company ....
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....d not take appropriate remedial measures. The Learned Counsel for the Appellant however contended that these disputes were frivolous and baseless since Corporate Debtor had continued to receive the services from the Operational Creditor even after their last email communication dated 14.03.2019. 12. We note that the Adjudicating Authority has recorded in details their findings that the Corporate Debtor had raised disputes with regard to services provided by the Operational Creditor. It would be useful to reproduce the relevant paragraphs from the impugned order as under: - "9. From the record at page 32 (i.e., email dated 26 February 2016), page 33 (i.e., email dated 10 November 2017), page 34 (i.e., email dated 02 October, 2018), Page 35 (i.e., email dated 12 March, 2019) and page 37 (i.e., email dated 14 March 2019) it is apparent that at various circumstances the Corporate Debtor raised disputes with respect to the service provided by the Operational Creditor. ***** **** ****** 11. However, be that as it may, it is imperative to mention that from the year 2016 to 2019 the Corporate Debtor raised several issues with respect to the services provided b....
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.... dispute is pending between the parties. Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the "dispute" is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defence is likely to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application." 15. We find that the Adjudicating Authority in the present case has also followed the principles adumbrated in the Mobilox judgment and held that the disputes raised by the Corporate Debtor are not spurious or plainly frivolous or vexatious. The relevant paragraphs of the impugned order are extracted here as under: - "13. Further, in Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software (P) Limited3 it was opined by the H....