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2019 (2) TMI 1500 - Tri - Insolvency and BankruptcyCorporate insolvency process - outstanding operational debt - Existence of dispute - HELD THAT - Parties while entering into an agreement and even at the stage of drafting an agreement are required to pay specific attention to details particularly where the commission is payable based just on one product as it is specifically stated in Clause 3(b) of the agreement that commission shall be computed on the net sales amount as invoiced by the company to the customer. The definition clause of the agreement dated 26.12.2017 clearly points out in Clause 1(a) of the said agreement that products initially means PLP Duct Pipe of 40mm X 33 mm. The contention of the Operational Creditor that PLP Duct Pipe should be construed as PLB HDPE Duct which is sought to be denied by the Corporate Debtor obviously shows that there exists a dispute as between the parties. It is not for this Tribunal as held in Mobilox Innovations Private Limited case 2017 (9) TMI 1270 - SUPREME COURT OF INDIA to consider whether the dispute is a bona fide dispute as applied to in the case of Companies Act 1956 and it is enough for the Corporate Debtor to establish that there is plausible dispute in existence as between the parties. As rightly pointed out by learned counsel for the Corporate Debtor it is required for the applicant/Operational Creditor to specify as to the date from which the debt fell due in Part-IV of the application which is not disclosed. In view of the existence of dispute Form-5 and part IV contained therein prescribed as the format of application to be completed and filed giving all the particulars being devoid of the same as well as the above referred to decision of Hon ble NCLAT this Tribunal is of the view that the petition is to be dismissed however without cost.
Issues Involved:
1. Validity and enforceability of the agreement dated 26.12.2017. 2. Proper service of Section 8 notice under IBC, 2016. 3. Existence of operational debt and default. 4. Dispute regarding the product specification (PLP Duct Pipe vs. PLB HDPE Duct). 5. Compliance with procedural requirements under IBC and AAA Rules, 2016. 6. Appropriateness of the petition in light of pre-existing disputes. Detailed Analysis: 1. Validity and Enforceability of the Agreement: The Corporate Debtor claimed that the agreement dated 26.12.2017 was "null and void" and unenforceable. They argued that the agreement was never acted upon and that the notice of demand under Section 8 of IBC, 2016 was not served properly. The Tribunal noted that the execution of the agreement was not denied by either party, but there was a contention regarding the product specified in the agreement. 2. Proper Service of Section 8 Notice: The Corporate Debtor contended that the Section 8 notice was not served in accordance with the IBBI (AAA) Rules, 2016, which do not recognize courier service as a valid mode of service. They also argued that the email service was not in compliance with the rules as it was not sent to a whole-time director or key management person. The Tribunal found that the Operational Creditor had provided proof of service through tracking reports and emails, but the Corporate Debtor disputed the validity of these modes of service. 3. Existence of Operational Debt and Default: The Operational Creditor claimed a sum of ?19,98,700/- as operational debt, including ?5,00,000/- for vendor registration cost and ?14,98,700/- towards commission. The Corporate Debtor denied any default, arguing that the agreement was not acted upon and that there was no evidence of the registration cost being incurred by the Operational Creditor. The Tribunal noted that the date of incurring the registration cost was not provided, nor was there proof of such expenditure. 4. Dispute Regarding Product Specification: The Corporate Debtor argued that the product specified in the agreement was PLP Duct Pipe, not PLB HDPE Duct, and that the supplies made were for PLB Duct Pipe. The Operational Creditor contended that PLP Duct Pipe should be construed as PLB HDPE Duct. The Tribunal observed that this contention indicated a dispute between the parties, which was not within its purview to resolve in a summary jurisdiction. 5. Compliance with Procedural Requirements: The Corporate Debtor pointed out that the Operational Creditor failed to specify the date from which the debt fell due in Part-IV of the application, which is a mandatory requirement. The Tribunal found that the application lacked specific details about the transaction and the date of default. Additionally, the Tribunal referred to a recent decision by the Hon'ble NCLAT, which emphasized the necessity of clear particulars in the application. 6. Appropriateness of the Petition in Light of Pre-existing Disputes: The Tribunal considered the existence of a dispute regarding the product specification and the validity of the agreement. It referred to the decision in Mobilox Innovations Private Limited v. Kirusa Software Private Limited, which stated that the existence of a plausible dispute is sufficient to reject a petition under Section 9 of IBC, 2016. The Tribunal concluded that the petition should be dismissed due to the pre-existing dispute and the lack of compliance with procedural requirements. Conclusion: The Tribunal dismissed the petition without cost, citing the existence of a dispute between the parties and the failure of the Operational Creditor to provide specific details and proof of the claimed operational debt. The decision emphasized the importance of clear and specific particulars in applications under IBC, 2016, and the necessity of proper service of notices as per the prescribed rules.
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