TaxTMI 
TaxTMI 
2023 (8) TMI 617
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....r Section 9 of the IBC and allowed the initiation of Corporate Insolvency Resolution Process ("CIRP" in short) of the Corporate Debtor. Aggrieved by this impugned order, the present appeal has been preferred by the ex-Director of the Corporate Debtor. 2. Coming to the brief facts of the case, Divineseair Logistics Pvt. Ltd - Corporate Debtor, who is the present Appellant had engaged into a business relationship with Kerry Indev Logistics Pvt. Ltd.- Operational Creditor, present Respondent No.1 providing their freight forwarding services since June 2018. Respondent No. 1 has claimed that having performed certain export services for the Appellant, certain dues remained outstanding for services rendered. The Respondent No. 1 sent a demand notice on 01.10.2019 under Section 8 of IBC claiming an amount of Rs.9,26,970/- and interest amount of Rs.1,38,055/- to the Corporate Debtor. No reply was received from the Corporate Debtor to the Section 8 notice following which the Respondent No.1 filed Section 9 application before the Adjudicating Authority. The Adjudicating Authority after hearing both parties admitted the Section 9 application which order has now been assailed by the Appellan....
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....and submitted the relevant Bills of Lading. They had raised invoices for which some payments had also been made by the Corporate Debtor. Since certain dues continued to remain unpaid and the cheques issued by the Corporate Debtor were dishonoured by the bank, they were constrained to send a demand notice. The Corporate Debtor had acknowledged their debt and confirmed that payment would be made in their emails dated 16.11.2018 and 05.03.2019. The Corporate Debtor kept on assuring the Operational Creditor that he would pay the balance amount in instalments which were all false. It was also asserted that the Corporate Debtor failed to produce any proof or evidence to substantiate their empty allegations of deficiency of service. The Corporate Debtor had not raised these disputes either before issue of demand notice or in their reply to the demand notice and were raised belatedly only to wriggle out of their liability to pay their dues. 7. However, the Learned Counsel for the Respondent No.1 had submitted that this Tribunal was apprised during the hearing on 10.05.2023 that it would not like to press the CIRP and that steps were being taken for withdrawal of CIRP. Further it was sub....
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....8(2), he may file an Application under Section 9(1) of the Code. 11. For convenience, we reproduce Section 9(1) of IBC which is to the following effect: "9. Application for initiation of corporate insolvency resolution process by operational creditor.- (1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub-section (2) of section 8, the operational creditor may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process." Section 9(5)(ii) is as follows : "(5) The Adjudicating Authority shall, within fourteen days of the receipt of the application under subsection (2), by an order- (i)..... (ii) reject the application and communicate such decision to the operational creditor and the corporate debtor, if- (a) the application made under sub-section (2) is incomplete; (b) there has been payment of the unpaid operational debt; (c) the creditor has not delivered t....
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....nsel for Respondent No.1 that the debt owed by the Corporate Debtor is established by the fact three cheques had been issued by them in lieu of the outstanding amount of Rs.2 lakh each dated 31.05.2019, 05.06.2019 and 08.06.2019. Further the debt remained payable since these three cheques got returned dishonoured on presentation to the bank with the endorsement of 'Stop Payment'. 15. The Appellant has however explained that the cheques issued by the Corporate Debtor were not for payment towards services rendered but for security towards commission received in advance from the Operational Creditor and hence cannot be treated as legally enforceable debt. Further these cheques were dishonoured as the Operational Creditor had presented them to the bank without knowledge of the Corporate Debtor. In the absence of any contractual agreement, we do not wish to comment on the nature of business relationship between the two parties except for stating that it is a well settled legal proposition that the operative requirement of operational debt is that the claim must bear some nexus with a provision of goods or services, without specifying who is to be supplier or receiver. 16. We find ....
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....wal Soin Om Prakash Soin [IN] Cc: 'Yogi Gupta: [IN]; 'Sankaran Nagarajan'; 'Xavier Chettiar [IN]'; 'VIVEK SINGH [IN]; [email protected] Subject: RE: Settlement of Overdues // S-DIVINESEAIR LOGISTICS Dear Mr. Kanwal, Sorry for late reply due to week end and Shivratri holiday. As discussed, in our meeting in your office I already clarified you everything about payment delay so. We are seriously trying to allocate funds so that can clear your payment and assured that same will transfer before 20th March. Best Regards/Laxman Director DivineSeair Logistics Pvt. Ltd. From: Yogi Gupta [IN] <[email protected]> Sent: 13 March 2019 18:44 To: Laxman; VIVEK SINGH [IN]; Kanwal Soin Om Prakash Soin [IN] Cc: Sankaran Nagarajan; Xavier Chettiar [IN]; [email protected] Subject: Re: Settlement of Overdues // S-DIVINESEAIR LOGISTICS Well Laxman ji, You also confirmed during face to face meeting, for the first cheque to be presented on 27/02 but same was not done... Second cheque by 07/03 - again same was not done Third cheque by 15/03-No comments fo....
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.... issue of complaint of delay in services, the Respondent No. 1 in their rejoinder reply before the Adjudicating Authority had submitted that the cargo had been received by Matak on time. Similarly, alleged delay in the shipment in respect of M/s Elegance Home Fashion was not caused on account of the Operational Creditor but due to failure on the part of M/s Elegance Home Fashion to provide PoA which was required mandatorily for custom clearance before shipment. 22. On the subject matter of pre-existing disputes, we find that the Adjudicating Authority at paras 12 and 14 of the impugned order has returned the following finding: "12. We have considered the objections raised by the corporate debtor regarding deficiency in services/delay in delivering goods to the parties. However, there is nothing on record to show that any complaint regarding delay in delivery was raised by any party. The Corporate Debtor has also failed to issue notice of dispute in reply to the section 8 notice, Form-3 and Form-4, denying the claim of the operational creditor." "14. The applicant has placed sufficient documents to show that the debt is payable by the corporate debtor and there ....
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....f the Corporate Debtor. It was also emphatically submitted that the excessive fees/expenses claimed by the Resolution Professional was preventing them from filing the withdrawal application before the Adjudicating Authority. 26. This Tribunal after concluding the hearing on 25.07.2023 reserved the matter for orders and allowed the parties to file short notes. The Respondent No.2/Resolution Professional in their short notes have stated that in the last more than one year of CIRP, numerous activities have been undertaken for smooth conduct of CIRP process. Further, to prove their bonafide, it is submitted that the sole CoC member had approved fees of the IRP of Rs.2,00,000/- per month which the Resolution Professional reduced on his own to Rs.1 lakh per month being the minimum fees in consonance with the IBBI Regulation. Submitting details of fees/expenses, the Resolution Professional has submitted that the total CIRP cost so far is Rs.19,99,544/- of which the fees of Resolution Professional is Rs.18,00,000/- from 02.03.2022 to 31.07.2023. It has also been stated that an amount of Rs.8 lakhs has been received so far from Respondent No.1, being the sole CoC member and the balance t....
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.... the Resolution Professional, a complaint was also sent by the Respondent No. 1 to IBBI. It is common knowledge that Para 25 to 27 of the Code of Conduct in the First Schedule of IBBI (Insolvency Professionals) Regulations, 2016 provides that the Resolution Professional is expected to charge his fees in a transparent manner which should be a reasonable reflection of the works undertaken rather than maximizing their own personal benefits. In the present case, though the sole CoC member had admittedly approved the fees of the Resolution Professional that cannot become a cover to keep on claiming the fees and end up burdening the sole CoC member with a disproportionately heavy amount as fees/expenses. It was incumbent upon the Resolution Professional to keep in mind that the entire claim amount collated was only about Rs.10 lakhs. Moreover, there was no complexity in the CIRP proceedings which warranted any exceptional responsibility to be discharged by him. 30. Hence, to our mind, integrity and fairness demanded that the Resolution Professional ought to have facilitated the withdrawal of the CIRP application as was desired by the sole CoC member/Respondent No.1 without unduly prol....