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TMI Blog2019 (12) TMI 1355X X X X Extracts X X X X X X X X Extracts X X X X ..... d it did not refer as what is outstanding due and it is prior to impugned demand notice, and the subsequent correspondence and Police are serious pre-existing dispute between the parties for the services rendered. It is a settled position of law that the provisions of the Code can be invoked where fundamental issues like debt, default, are not in dispute as it is summary proceedings in nature. Relevant issues to be examined in a Petition filed U/s 9 of the Code is whether there are debt and default in question and whether any pre-existing dispute is there or not - It is settled position of law that the provisions of Code cannot be invoked for recovery of outstanding alleged amount. The Petitioner has failed to make out any case that the debt and default in question is not in dispute, so as to initiate CIRP against the Corporate Debtor as prayed for - Petition dismissed. - C. P. (IB) No. 277/BB/2019 - - - Dated:- 13-12-2019 - Rajeswara Rao Vittanala , Member ( J ) And Ashutosh Chandra , Member ( T ) For the Appellant : Bhavya Mohan For the Respondents : C. K. Nandakumar ORDER Rajeswara Rao Vittanala, Member (J) 1. C.P.(IB) No. 277/BB/2019 is filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational Creditor issued an invoice (bearing invoice No. 36) for an amount of ₹ 1,43,21,084/-. The due date for payment by the Corporate Debtor, as per the said invoice was 10th July 2016. The Corporate Debtor defaulted in making payment under the said invoice. The default under invoice No. 36, therefore, first occurred on 10th July 2016, and it is presently continuing. For the services provided in the month of July 2016, the Operational Creditor issued an invoice (bearing Invoice No. AM/2016-2017/07/39) on 31st July 2016, for an amount of INR 9,29,950/-. The Corporate Debtor defaulted in making payment under the said invoice. The default under invoice No. AM/2016-2017/07/39. Therefore, first occurred on 10th July 2016 and is presently continuing. (4) The total amount is due and payable by the Corporate Debtor to the Operational Creditor for services rendered in June and July 2016 is INR 1,52,51,034/- plus interest calculated 18% p.a. from the due date till the date of payment. The total calculation of the principal amount of debt and interest (up to the date of filing of the Application, i.e. 9th July 2019). The Corporate Debtor had admitted that payments were due to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the address provided by the Petitioner in its demand notice. Immediately upon having received these letters with the said endorsement, the Respondent forwarded the said reply letters dated 24.10.2018 and 31.10.2018 to the Advocate of the Petitioner by way of a further letter dated 15.11.2018, which was duly received by the Petitioner through its advocate. The present Petition was filed on 09.07.2019, and the Petitioner had plenty of opportunity to place on record, the reply of the Respondent to the demand notice. However, the Petitioner has sought to mislead this Tribunal by stating that no reply to the demand notice dated 08.10.2018 was received within the stipulated period, and simply states that there was a belated reply dated 15.11.2018. Further, this reply is also not produced, evidently because it sets out in significant detail, the pre-existing dispute between the Petitioner and the Respondent, in respect of the debts sought to be claimed herein. (3) It is stated that the present debt has been disputed by the Respondent on multiple occasions, and the same has been communicated to the Petitioner. The Petitioner, despite being well aware of the nature of the dispute raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y a report which assesses the quality of the clicks, generally referred to as 'traffic quality report'. (6) During the course of the Agreement, the Respondent paid the Petitioner a sum of ₹ 85,60,080/- (Rupees Eighty-Five Lakhs Sixty Thousand and Eighty only) towards the clicks received through the Petitioner in May 2016. However, in respect to the invoices raised by the Petitioner for June and July, before the Respondent could process the invoices, the Respondent was informed by the customers of its client that there were several fraudulent clicks that had occurred, and that the Petitioner should be careful. In email dated 06.07.2016, one customer stated that it was impossible for as small a number as 71 users to have clicked 6500 times on the same product from the same traffic source. Through a subsequent email dated 28.07.2016, another customer of the client explicitly named the Petitioner as an entity which should be excluded from all the client's campaigns on account of fraudulent activity. Given these complaints, the Respondent had duly withheld the commission payable in respect of those months. Clause 6 of the Agreement, in fact, specifically stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h July 2016 addressed by a representative of the Operational Creditor to the Corporate Debtor. Another Memo dated 13.12.2019, was also filed along with affidavit dated 21.11.2019, by inter-alia stating that Mohd. Nazruddin, has filed Affidavit dated 21.11.2019, by inter-alia says that the Application contains typographical errors and is incorrectly labelled as a certified true copy of the resolution passed by the Board of directors of the Operational Creditor. Further, the documents incorrectly refer to him as a Director of the Operational Creditor. However, in fact, the Designated Partner of the Operational Creditor (which is a limited liability partnership), and he is legally entitled to act for and represent the Operational Creditor in the present proceedings. Further, the learned Counsel for the Petitioner submits that instant Petition is filed in accordance with law and the debt and default is proved beyond doubt and there is no dispute raised by the Respondent and thus, she urged to admit the Petition by initiating CIRP against the Corporate Debtor. 6. Shri C. K. Nandakumar, learned Counsel for the Respondent, on the other hand, while reiterating various averment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t issued statutory Demand Notice dated 8.10.2018, in Form 3 Under Rule 5(1)(a) of the I B (AAA) Rules, 2016, through Advocate, to the Respondent by inter-alia demanding to pay for a total amount of ₹ 1,52,51,034/- for the Invoice No. 36 for 1 June 2016 - 31 June 2016 and; Invoice No. AM/2016-2017/07/39 for July 2016. The one Invoice dated 31.07.2016 (enclosed at page No. 25 of the CP) by inter-alia contains terms that due date is August 30, 2016, failing which interest @ 18% p.a. will be levied on all delayed payments; all disputes will be subject to the Delhi Jurisdiction only etc. However, the Petitioner issued said statutory Demand Notice only on 08.10.2018, and the instant Company Petition was filed on 09.07.2019, even though the Demand Notice allowed only 10 days from the date of receipt of the copy of the Order either to settle the issue or bring to notice any notice of dispute. Therefore, the Petitioner failed to explain the delay in approaching the Adjudicating Authority, as the due date was only 30.08.2016. The only explanation given by the Petitioner is one Gmail stated to have sent from iPhone dated 17.08.2016 from Vikash Roy, wherein it is stated that they would d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ient states that this was done to increase the number of clicks without participation by genuine end users so as to inflate the invoice. The fraudulent clicks have been identified by the customers of our client, some of whom have requested to us that you be blacklisted from their campaigns. Copies of email dated 06.07.2016, 28.07.2016 and email trail dated 14.02.2017 exchanged by our client which identifies frauds and fraudulent clicks are herewith produced as Document No. 2, 3 and 4. Further, evidence demonstrating fraudulent clicks are borne out from the details of the conversion clicks which is produce as Document No. 5. We further understand from our client that some of the complaints about your fraudulent practices came directly from independent third party customers identifying fraud traffic from you and requested actions be undertaken towards such fraudulent traffic quality. 5. Out client states that they informed you several time vide their email that the amount claimed in the invoices were inflated as a result of the fraudulent clicks. Our client states that it was compelled to file a police complaint before the HAL Police Station 08.02.2017 due to the threats receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch has evidence to link that the proprietor of Alphaom has engaged him for pursuing the Company to make payments. We have been trying to talk to Alphaom Marketing Services LLP from a business discussion standpoint as we wanted to resolve this dispute peacefully as per the terms of Alphaom Contract agreed upon by both the parties, but his attempt of our Company ended without much success. 9. Further, I would like to bring to you notice that we have sent several Cease and Desist Notice to Mr. Himanshu Mendiratta and Mr. Arjun Basu of Alphaom Marketing Services LLP asking them to settle the matter peacefully and to cease threatening and intimidating our Company senior executives and employees by Mr. David Kahana who was acting on their behest, but this attempt was unfruitful. The illegal and unethical actions adopted by them is with a wrongfully intension of arm twisting our Company into give in to their threats and intimidations and pay the amount that is withheld by us for their fraudulent transactions has been established by us beyond any doubts, based on the records maintained by the providers of the Has offers platform and also based on independent investigation made by our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y failed to settle it forcing the Adjudicating Authority to decide the case as per merits of case. The Petitioner is failed to make out any case so as to initiate CIRP on just and reasonable ground. Moreover, the Respondent is a going concern having more than 1500 Employees depending on it for their livelihood and it is also well reputed Company having so much goodwill. Therefore, the operations of Respondent cannot be disturbed at the instance of Petitioner basing on un-tenable and un-justifiable grounds. 13. It is a settled position of law that the provisions of the Code can be invoked where fundamental issues like debt, default, are not in dispute as it is summary proceedings in nature. Relevant issues to be examined in a Petition filed U/s 9 of the Code is whether there are debt and default in question and whether any pre-existing dispute is there or not. It is relevant to point out the observation of Hon'ble Supreme Court of India vide judgment dated 3rd December, 2019 passed in Civil Appellate Jurisdiction in the case of M/s. Embassy Property Developments Pvt. Ltd Vs. State of Karnataka Ors. in Civil Appeal No. 9170 of 2019 (Special Leave Petition (C) No. 22596 of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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