2019 (8) TMI 1034 - AT - Insolvency and Bankruptcy

Maintainability of application - Initiation of Corporate Insolvency Resolution Process - pre-existing dispute or not - Corporate Debtor - HELD THAT - There is no dispute about deficiency of service rendered by the Respondents. Clearance of Bank Guarantee for the purpose of EPCG Scheme is concerned, there is nothing on the record to suggest that such job was entrusted to the Respondents and they failed to do so. In absence of any such agreement placed on record, it cannot be held that apart from the services rendered, this is also the job to be performed by the Operational Creditor to get the money cleared from the Corporate Debtor . In the absence of any pre-existing dispute, the Adjudicating Authority has rightly admitted the application under Section 9 and for that no interference is called for - appeal dismissed.

Summary

Issues:
1. Maintainability of application under Section 9 due to pre-existing dispute.

Analysis:
The appeal was against the order admitting an application under Section 9 filed by the Operational Creditor against the Corporate Debtor. The Appellant argued that there was a pre-existing dispute, citing e-mails exchanged between the parties. The Respondents contended that the e-mails did not indicate any pre-existing dispute regarding the services provided by the Operational Creditor. It was highlighted that the Corporate Debtor did not respond to the admission notice under Section 8(1) issued earlier. The e-mails presented by the Appellant were examined, revealing a communication regarding Bank Guarantee and Custom Clearance matters. The Appellant acknowledged the absence of a separate agreement but argued that the Bank Guarantee and Custom Clearance were the responsibility of the Operational Creditor. However, it was established that the required clearances were obtained and services were rendered by the Respondents without any dispute on the quality of services. The Tribunal found no evidence to suggest that the Bank Guarantee clearance for the EPCG Scheme was part of the Operational Creditor's responsibilities. The Respondents clarified that the Bank Guarantee and related Scheme were not connected to the services provided. Consequently, the absence of a pre-existing dispute led the Adjudicating Authority to rightly admit the application under Section 9, resulting in the dismissal of the appeal and the Company Appeal (AT) Insolvency No.46 of 2019.

This comprehensive analysis of the judgment delves into the core issue of the maintainability of the application under Section 9 in light of the alleged pre-existing dispute. The detailed examination of the arguments presented by both parties, along with the Tribunal's assessment of the evidence provided, offers a thorough understanding of the decision-making process and the reasoning behind dismissing the appeal.