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TMI Blog2017 (11) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution Professional. His registration number is IBBI/IPA- IP/00032/2016-17/1049. In pursuance of section 13 (2) of Code, we direct that -t Interim Insolvency Resolution Professional shall immediately make public announcement with regard to admission of this application under Section 7 of the Code. We also declare moratorium in terms of Section 14 of the Code. - (IB) 89/(PB)/2017 - - - Dated:- 25-9-2017 - MR. M.M. KUMAR AND MS DEEPA KRISHAN, JJ. For The Operational Creditor : Amit Agarwal, Tejaswita and Mohit Negi, Advs. For The Respondent : Piyush Joshi and Kaustav Som , Advs. JUDGMENT CHIEF JUSTICE (RETD.) M.M. KUMAR, HON BLE PRESIDENT his is an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (for brevity 'the Code') read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The petitioner claims that it is an 'Operational Creditor' and the respondent is a 'Corporate Debtor'. 2. The Corporate Debtor 'M/s. Kanak Resource Management Limited' has been incorporated on 26.11.2017. Its CIN number is U74140DL2007PLC170750. Its authorized sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,50,000 6 30.11.2016 01.11.2016 to 30.11.2016 4,50,000 7 31.12.2016 01.12.2016 to 31.12.2016 4,50,000 8 01.02.2017 01.01.2017 to 31.01.2017 4,50,000 9 01.03.2017 01.02.2017 to 28.02.2017 4,50,000 Copies of the invoices demanding payment have also been placed on record (Annexure-2). 5. 'Operational Creditor' further claims that as per the agreed terms, Operational Creditor is also entitled to receive 2% (two percent) of the profit of the financial year 2015-16, amounting to ₹ 9,64,324/-. 'Operational Creditor' has further asserted that in aforesaid circumstances 'Corporate Debtor' is under obligation to make the payment of above outstanding amount alongwith interest @ 18% till the realization of the payment. A copy of statement of account has also been placed on record (Annexure- 4). Another table showing the monthly remuneration due plus 2% of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be under obligation to make a payment only in respect of monthly invoice 'duly approved by the Managing Director of the Corporate Debtor and since none of the invoices as described by the Operational Debtor have been duly approved by the Managing Director of the Corporate Debtor, no obligation is cast on the Corporate Debtor to make any payment to the Operational Creditor. Moreover, Corporate Debtor also raised dispute by asserting that no service has been taken by him nor any services been provided by the Operational Creditor for the period to which the invoices relate. 10. In light of direction issued by this Tribunal, Corporate Debtor has also filed correspondences exchanged between the Operational Creditor and Corporate Debtor in 2015, since around the time when the consultancy agreement between both of them dated 01.07.2015 came into force (Annexure-I (Colly). The Corporate Debtor has also filed correspondence exchanged between both of them after June, 2016 being the time period when disputes arose between the Operational Creditor and Corporate Debtor relating to the consultancy agreement and other related matters (Annexure-II (Colly). 11. We have heard learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgued that the approval from the Managing Director in relation to monthly invoices was necessary before it becomes payable. On behalf of the Operational Creditor it was argued that as per the practice in the past no such approval by the Managing Director has ever been considered necessary not it has ever been insisted in respect of the payments made. 13. It was then submitted that from June, 2016 Operational Creditor ceased to give any work and they were discussing full and final settlement. According to the learned counsel there is no consultancy provided by the Operational Creditor to the Corporate Debtor and therefore, no payment is due. In that regard, our attention has been drawn to terms of consultancy agreement. A reference to clauses 2, 5, 9 11 has been made which are as under:- 2. Functions The Consultant shall be designated as Advisor in Kanak Resources Management Limited, a subsidiary of IL FS Environmental Infrastructure Services Limited (IEISL), based at Delhi. The Consultant is subject to the direction and supervision of the Chairman of the Company and shall provide services for various mandates of Kanak Resources Management Limited during the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsultant shall not attempt to make, retain or delete copies by any means what so ever of any data, information, know-how or records of the Company. In the event of gross indiscipline, violation of service code of conduct or non-conformity to organizational policies and rules regulations as framed/applicable from time to time, the organization can terminate the consultancy in a single day's notice and in this case the Consultant are not entitled to seek any due/compensation from the Company. A perusal of the aforesaid provision would show that the Operational Creditor was subject to direction and supervision of the Chairman of the company. They were to provide services for various mandates of the Corporate Debtor. They were responsible for business development, creating a long term business plan for the Company and were also responsible for increasing the Company's profitability and cash flow. As per clause 5 they were to be paid a sum of ₹ 54,00,000/- per annum which worked out to be a monthly payment of ₹ 4,50,000/- on the basis of services provided by it. The consultant/Operational Creditor was also to be paid performance related payment limited t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. 18. It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Central Government or to the supply of the essential goods or services to the Corporate Debtor which may be specified. Such supply is not to be terminated or suspended or interrupted during the moratorium period. 19. The Interim Resolution Professional shall perform all his functions religiously and strictly which are contemplated, interalia, by Sections 15, 17, 18, 19, 20 21 of the Code. He must follow best practices available in the discipline of Insolvency even borrowing from others jurisdiction provided such practice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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