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TMI Blog2019 (8) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... Mundra, Operational Creditor herein is a proprietor of Peenus Investments and was acting as an authorized person up to 2.4.2018 on behalf of CIL securities Limited, Hyderabad (stockbroker), listed on BSE limited and engaged in the stock market broking business. The operational creditor was working as an intermediary and providing services for transactions to be executed by his clients at National Stock Exchange in cash segment as well as derivate segment and Bombay Stock Exchange in cash market. (b) The operational creditor raised invoices on monthly basis for the services provided to the Corporate Debtor as per agreed terms. (c) It is averred that despite several written requests the Corporate Debtor failed to make payment. It is further averred that for the services provided till 28.02.2018, there is an outstanding due amount of Rs. 3,26,807.12 and the same is also confirmed by the Corporate Debtor vide its ledger account up to 28.02.2018. When the corporate debtor failed to make payments, a demand notice in Form-3 dated 28.03.2018 was issued to the Corporate Debtor demanding to make payment within ten days of receipt of the demand notice. (d) The Operational Creditor furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 was issued after enactment of GST Act, 2017, the Petitioner vide letter dated 01.12.2017 and email dated 02.12.2017 informed the Corporate Debtor that the Petitioner is not covered under Section 24 (VII) of GST Act, 2017. Subsequently, the Operational Creditor sent notice on 02.04.2018 and Corporate Debtor replied on 18.04.2018 that there is a pre-existing dispute and asked the Petitioner to get himself registered under the GST Act and to submit GST complied bills. (7) It is averred that Corporate Debtor was willing to process the invoice raised by the Petitioner subject to the condition that the Petitioner gets himself registered under GST Act, 2017. It is averred that by virtue of an agreement between the parties, the remedy for a dispute is available under the Trading Member and authorised Person Agreement through Exchange Mechanism and that as per the provisions of GST Act, the financial services provided by the Petitioner as well as the Corporate Debtor attract GST and both the parties were statutory bound for obtaining registration under the GST Act. (8) It is their case, when the Operational Creditor approached Corporate Debtor with a claim the Corporate Debtor immedia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2017, whereas Corporate Debtor has not paid the brokerage bills for the month of June, 2017 when GST Act was not in existence and Corporate Debtor is relying on the notice dated 17.04.2018 as pre-existing dispute which was received by operational creditor on 25.04.2018, that too after expiry of 10 days from the date of serving on the Demand notice and did not give any reason for non-payment of brokerage charge for the month of June, 2017. Ignorance of law cannot be treated as pre-existing dispute. (f) It is the case of Petitioner that authorized persons providing services within the same State is covered under CGST Act and outsiders are covered under IGST Act with reference to the registered office of the Corporate Debtor. In this case, Petitioner is providing services from Indore and Corporate Debtor is situated at Hyderabad, as such there is involvement of two States and service rendered is covered under IGST Act, and not CGST. It is also averred that Ministry of Finance vide its Notification No. 10/2017-Integrated Tax dated 13.10.2017 has clarified with regard to applicability of registration & tax liability in respect of interstate transactions. The Corporate Debtor instead ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts to establish Corporate Debtor committed default of paying Operational debt. He prayed petition is to be admitted. 9. On the other hand, learned Counsel for Respondent would contend that Respondent do not come under the definition of Corporate Person. Secondly, Counsel contended there is no default. Thirdly, Counsel contended dispute was raised prior to the Demand Notice and as such Petition cannot be admitted. The fourth contention that soon after clarification from the Ministry of Finance, Respondent has drawn a Demand Draft for the claim amount and wanted to pay the same to the Petitioner when the matter was pending, which the Petitioner refused. However, the Respondent remitted the amount to the account of Petitioner through RTGS. However, the Petitioner had returned the amount. Counsel contended the Petitioner tried to use the Tribunal as a platform to take revenge against the Respondent. Counsel contended, Respondent is a reputed Company having sufficient net worth. On the other hand, Petitioner instead of accepting the payment after clarification by Ministry of Finance that GST registration is not necessary, tried to pay the money claimed by the Petitioner. The Demand Dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der any law for the time being in force to regulate services or transactions of financial sector and includes the Reserve Bank of India, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority of India, the Pension Fund Regulatory Authority and such other regulatory authorities as maybe notified by the Central Government; 15. The contention of the learned Counsel for Respondent that the Respondent is a registered entity under Securities and Exchange Board of India (SEBI). The Counsel relied on Annexure-II of the Counter. SEBI issued certificate of registration in favour of Respondent as a Stockbroker. The Counsel for Respondent has filed relevant papers relating to registration at page Nos. 15-18 of the Counter shown as Annexure-II. Thus, the Respondent Company is a Financial Service Provider which does not come under the definition of Corporate Person and as such, the Petitioner cannot maintain this Petition against the Respondent. In this connection, the learned Counsel for Respondent relied on the decision of the Hon'ble NCLAT in the matter of Randhiraj Thakur v. M/s Jindal Saxena Financial Services & another in Company Appeal (AT) (Insolv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the various provisions of the Code that Respondent is a Financial Service Provider within the meaning of section 3 (17) of the Code and that it is exempted from the purview of I&B, Code. The contention of Operational Creditor that Respondents withheld payment for June, 2017 even before the advent of GST Act. Thus, Respondent committed default. As far as bill for June, 2017 is concerned, the Respondent is contending that action cannot be initiated against it under the Code. Secondly, consolidated claim is made over when genuine dispute was raised and claim may include the dues for June 2017. However, the main grounds urged that Petitioner / Operational Creditor cannot initiate action against Respondent under provisions of I & B Code. I agree with the contention of Counsel for Respondent that present Application under Section 9 of the Code is not maintainable against Respondent. 18. It is interesting to note that Respondent offered to pay claim amount to the Petitioner when proceedings are pending before the Tribunal. It is the case of Respondent soon after receiving clarification, the Respondent offered to pay whatever due to the Petitioner. The demand draft was also obtained fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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