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TMI Blog2018 (6) TMI 1261X X X X Extracts X X X X X X X X Extracts X X X X ..... ion deserves 'Admission'. We admit the petition u/s. 9 of the code declaring a moratorium for the purpose referred to in section 14 of the Code - Company Petition (IB) NO. 180/ALD/2017 - - - Dated:- 27-4-2018 - MR. V. P. SINGH AND MS. SAROJ RAJWARE, JJ. For The Appellant : Jeevesh Nagrath, Adv. and Nishant Mehrotra, Adv. For The Respondent : Arjun Harkauli, Adv. ORDER V.P. Singh, Member (Judicial) The present application is filed under Section 9 of Insolvency and Bankruptcy Code, 2016 read with rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority Rules, 2016) by the Applicant/ operational creditor, i.e. M/s Maya Movies Pvt. Ltd for initiation of Corporate Insolvency Resolution Process against the respondent/ corporate debtor company M/s. Tricolor India Schauspiel Pvt. Ltd . 2. The Applicant/Operational Creditor is a Company incorporated in the year 2002 under the Companies Act 1956, bearing Corporate Identification Number U92132 MH 2002 PTC 134975. Mr Nilesh Parmar (Sr. Manager, Finance and Accounts) has filed this application on behalf of Applicant/ Operational Creditor by authorisation letter/ Board Resolution date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roval of the dramatised script in 1st Language from the end client: * Stage 2: Twenty-five: 25% of the agreed amount against the approval of the submission of final track (includes voice recording, music, sfx, mixing etc.) of the show in all the three languages and the approval of the visualisation. * Stage 3: 35% of the agreed amount against completion of content generation in 2D, 3D and live shoot (If required) * Stage 4: 10% of the agreed amount against the final programming, synchronisation and integration in all the languages and execution of any changes if required by the client; * Stage 5: 5% of the agreed amount to be released after the handing over the show to the end client. (vi) The Operational Creditor raised an Invoice dated 01.06.2016 bearing No. MMPL/Local/16-17/001 for the sum of ₹ 28,75,000/- (Including Taxes) on the corporate debtor towards the payment of stage-1 of the work (Jung-E-Azadi Visualization Send by Mr. Ketan Mehta to Corporate Debtor which is Annexed as Annexure-9). The payment for the sai invoices amounting to ₹ 26,25,000/- was made on 02.06.2016. (vii) The Balance payment of ₹ 75,00,000/- plus Int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral projection and 3D image mapping, lightening, Laser lightening system supply and integration, water screens etc. (ii) That The Punjab Government issued a tender for a world class, Son-et-Lumiere show called the Jang-E-Azadi Memorial Project with the Punjab Freedom Movement Memorial Foundation in the year 2015. (One of the Biggest Project of its kind in India) (iii) That, The Corporate debtor had applied for a tender for the Jang-E-Azadi Memorial Project in collaboration with the Punjab Freedom Movement Memorial Foundation in the year 2015, It was awarded the tender, because of huge nature of the project and social interest in the same, the corporate debtor believing the representation of the Operational Creditor collaborated with operational creditor for the same. Respondent/Corporate Debtor further stated that Operational Creditor is a family run company by Mr. Ketan Mehta and his wife, Deepa Sahi. The Company work like proprietorship of Mr. Ketan Mehta and lets out his services. (iv) That is believing the representation of the Operational Creditor and its Director Mr. Ketan Mehta; the Corporate Debtor collaborated with the Operational Creditor. The Project was award ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned that right since January, 2016 the writer Mr. Shama Zaidi, who is an accomplished writer of stories and screenplay for Son-et- Lumiere shows sent Mr. Ketan Mehta the Script in Hindi for his input by his email dated 03.01.2016. (A copy of email dated 03.01.2016 is Annexed as Annexure R-1 in Counter Affidavit) (ix) That on 10.05.2016 Mr. Himanshu Sabharwal of Corporate Debtor Company sent Mrs. Deepa Sahi of Operational Creditor, the script approved by the Authority. It was sent well in time for Mr. Ketan Mehta to prepare visualization. He further suggested that it is better if the parties, for a better understanding of a role, sign an agreement. (x) That the corporate debtor though had put in all the hard work, but to avoid constant bickering and in the interest of good business relations, to get Mr. Ketan Mehta to agree to contribute and with the vision to possibly expand this partnership to other project and to avoid any doubts regarding the role of the parties, a written agreement dated 01.06.2016 was agreed between the Operational Creditor and Corporate Debtor, and that Mr. Ketan Mehta agreed to take credit for this project. (Copy of agreement dated 01.06.2018 is anne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... project. (Copy of email by the Operational Creditor is annexed as Annexure -X). (xv) That the Project was handed over to Client in November 2016, and the parties met after handing over of the project and Director of the Corporate Debtor Company explained and discussed the matter with the Mr. Ketan Mehta and Ms. Deepa Sahi that since there has been no contribution hence the question of payment doesn't arise. However, despite that, they insisted on claiming the alleged outstanding payment. (xvi) Hence Corporate Debtor denied that any debt of ₹ 75,00,000/- is due and payable as claimed by the Operational Creditor. 6. Operational Creditor has further filed Rejoinder to the Reply filed by the corporate Debtor and points taken by the operational creditor in their rejoinder are as follows; (i) Mr. Ketan Mehta (One of the Director of the Operational Creditor) is an Internationally acclaimed, national and International award winning film director; he is also MD of Maya Digital Studio Pvt. Ltd, India's leading Animation and visual effects studio, he has directed historical films on Indian Freedom movement like SARDAR on the life of Sardar Vallabh Bhai Patel and M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect. (viii) However, post the key elements of the Agreement including finalisation of the script, approval for the show by the govt, getting the tender passed and received the detailed creative visualization from the Ketan Mehta, which are the most important and substantial part of the production process, Mr. Himanshu Sabbharwal of the Corporate Debtor Company Completely stopped communicating with the Mr. Ketan Mehta. (ix) When Mr. Ketan Mehta called up Mr. Sabharwal to find out about the progress of the project and the Time lines for the work, he was informed that project was delayed, further when Mr. Ketan Mehta inquired from the market then he got to know that Mr. Sabharwal had started work on the production without informing him, Ketan Mehta realized that Mr. Sabharwal with totally malafide intention of not honouring his commitment in the MoU and was using the creative effort and services rendered by Mr. Ketan Mehta without paying him for the services rendered by him as per contract. (x) Repeated letters and queries were written to Mr. Himanshu Sabharwal regarding project which went unanswered, at no stage corporate debtor communicated any dissatisfaction with the serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebtor, demand raised by an Operational creditor is due to the corporate debtor? (2) To evaluate whether there was any pre existening dispute regarding the due amount between the operational creditor and the corporate debtor before issuance of Demand Notice? 10. While discussing the first point, it is relevant to mention that Operational Creditor is best known for one of its director of the Company, i.e. Mr. Ketan Mehta (who is producer of famous movie like Mangal Pandey and known as best Creative Director), whereas Corporate Debtor Company has expertise in performing Light and Music shows. From the discussion in detail and perusal of record, it appears that one of the officials of the Corporate Debtor Company, i.e. Himanshu Sabharwal firstly contacted Mr. Ketan Mehta of the Operational Creditor while getting tender of the show Jang- E-Azadi invited by Punjab Government in Collaboration with Punjab Freedom Movement Memorial Foundation (PFMMF). 11. It is relevant to produce part of Email dated 07.11.2015 sent by Himanshu Sabharwal of Tricolor to Mr. Ketan Mehta of Maya Movie, which was sent much before of signing of the agreement (01.06.2016). Dear Ketan Ji, It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of financial feasibility and paucity of time. Let's talk once you have read the script. Regards. ( b) Email Dated 19.05.2016 send from Corporate Debtor to Operational Creditor reads here below: - Dear Deepa Ji I have tried to figure out a way to go with what you are suggesting, however it does not seem possible for the following reason. (1) We are not in position to change the script because client has a close watch on it because of its social and political repercussion and it took 3 long months to get it approved. It was shown to you in the First draft and all suggestions put forward by ketan ji were incorporated by Atul. Changing it at this stage would mean, we will never get on with making the show. Approval will take long time and only add to complication. (2) Even if we record in next week and get down to making music etc., the audio track will not be ready before mid- July. This means this means there are only 2 months to make the content after that, because in spite of delay in approval, the deadline stands where it was. And it may not be possible to even complete the show after that. Since we have stake our reputation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ketan ji were incorporated by Atul. Changing it at this stage would mean, we will never get on with making the show. Approval will take a long time and only add to complication. 16. Hence interpretation of these mail establish two point that Operational Creditor has worked behind script and Corporate Debtor in itself was need of the Operational Creditor that why he in email dated 19.05.2015 accepted for signing the agreement, further it was only the Operational Creditor through email dated 23.05.2016 further reminded the Corporate Debtor to Draft and signed the Agreement for further course of work in the project. Email dated 23.05.2015 of Deepa Sahi (of Operational Creditor) to Himanshu Sabharwal of Corporate Debtor is produced: Hi Himanshu Sorry to be the bad cop but ketan is wondering if there is anything the problem as why you are not sending the contract etc. though you had first committed to send in Jan, then march and now even after 10 days of approval you are still not sending it. Please let us know that status at the earliest It it's not happening do inform. Mr. Himanshu Sabharwal of the Corporate Debtor has accepted his fault and on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mr. Ketan Mehta had not made any suggestion to the dramatised script. He did not meet the clients regarding the change in the script. But by email dated 10.05.2015 and19.05.2015 of Mr. Himanshu sabharwal of Corporate Debtor to Ms. Deepa Sahi of Operational Creditor is quite clear that he has only informed Ms. Deepa sahi about approval of the script from the committee (and this was only the condition of payment of Stage 1 work) so corporate debtor was having an awareness of completion of 1st stage work and he made payment for the same. Regarding objection raised by the Corporate debtor that Corporate debtor has not made any suggestion to the dramatised script, it is quite clear from the email dated 19.05.2015 of Corporate Debtor to the Operational creditor that they were in not position to incorporate changes suggested by the operational creditor to the script at that point of time. 20. Now the issue arises, and the only ground for Operational Creditor to file this section 9 Application is payment of the remaining amount of Stages 2, 3, 4, 5 of work as per Agreement. 21. The sole ground of the Argument of the Counsel for the Corporate Debtor is that, there is not a single ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y visualize/oversee it. Otherwise, they will not be able to complete the project on deadline. 24. Further, the Operational Creditor has also annexed an email dated 23.06.2016 which is after the execution of the Agreement in which Operational Creditor has send Visualization of Mr. Ketan Mehta for further completion of said Project, and which was the only work Corporate debtor has asked to Do. (Copy of email is annexed as Annexure-9 of the IBC petition). 25. Counsel for the Corporate Debtor during course of argument has also raised this Objection that visualization send by Operational Creditor on 23.06.2016 is mere 5-page visualization and this cannot be treated as visualization but from perusal of Email of Mr. Himanshu Sabharwal of Corporate Debtor dated 01.07.2016 it is quite clear that he has not raised any objection related to visualization send by Operational Creditor to Corporate Debtor and Email dated 01.07.2016 is reproduced here below: - Dear Ketan Ji Zindabad, I with the help of your input mailed last week, we have worked out a visualization for you to see. Do let us know when Ross can speak to you about it. I shall co-ordinate accordingly. Your valuable g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information utility. It is clear that such notice must bring to the notice of the operational creditor the existence of a dispute the fact that a suit or arbitration proceeding relating to a dispute or 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 . 28. A perusal of record shows that Corporate Debtor has not annexed any evidence which shows that they were unsatisfied with this visualization provided by Operational Creditor and it is the first time during reply to demand notice C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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