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TMI Blog2020 (12) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... orate Debtor. Therefore, we have no hesitation in holding that the Appellant- Financial Creditor was entitled to raise the invoice dated 20.04.2019 in regard to the unpaid balance amount of ₹ 2,05,00,000/- in respect whereof default was committed by the Corporate Debtor who admittedly paid only ₹ 75 Lakhs as part payment. There is nothing on the record to even suggest that the liability was at all denied by the Corporate Debtor and any agreement or settlement was reached inter se the parties for reduction of amount of fee payable in lieu of services provided for the reason that the timelines were not adhered to by the Appellant in arranging financer for the Corporate Debtor s project. The Adjudicating Authority landed in error in observing that there was a clear deficiency in service provided by the Appellant falling within the ambit of Section 5(6)(b) of the I B Code which cannot be supported. The Adjudicating Authority has landed in error in holding that there was no debt as claimed by the Appellant and there was deficiency in service provided by the Appellant. The findings recorded by the Adjudicating Authority are grossly erroneous and same cannot be suppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2019, 30.01.2019, 27.02.2019 and 20.04.2019 as noticed in the impugned order. In regard to proforma invoice dated 20.04.2019 for an amount of ₹ 2,05,00,000/-, Corporate Debtor addressed communication dated 02.05.2019 to Appellant raising the issue of delay in providing the service which according to the Corporate Debtor had taken 11 months instead of 6 months as per agreed terms. However, the Corporate Debtor, having regard to the efforts put in by the Appellant s team, claimed to have amicably decided to conclude the deal at a fee of ₹ 150 Lakhs out of which ₹ 75 lakhs have already been paid. The invoice was returned to the Appellant with request to submit full and final bill for balance amount of ₹ 75 lakhs to enable the Corporate Debtor to process the same. On 20.05.2019, Appellant issued a demand notice under Section 8 of the I B Code claiming an amount of ₹ 2,41,90,000/- from the Corporate Debtor and when the same was not complied with, the Appellant initiated steps for triggering of Corporate Insolvency Resolution Process. 3. Before the Adjudicating Authority, it was pleaded by the Corporate Debtor that there was delay in arranging the fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alf of the Corporate Debtor that the Corporate Debtor, in terms of Clause 2.2 of the Engagement Letter was still liable to pay full fees to the Appellant. Learned counsel for the Appellant would further argue that the delay in disbursal of funding was attributable to the Corporate Debtor itself and the Appellant could not be blamed for deficiency of service. Lastly, it is submitted that no settlement had taken place with respect to reduction in fees payable under the Engagement Letter and even the amount of ₹ 75 lakhs admittedly lying outstanding as per Corporate Debtor s assertion has been withheld to coerce the Appellant in accepting in writing the factum of settlement of dispute at ₹ 1,50,00,000/-. 5. Per contra, learned counsel for Respondent- Corporate Debtor submitted that the Appellant was required to provide its services to the Corporate Debtor for structuring and placement of its debts instruments with provision of funding amount ranging between ₹ 200 Crores to ₹ 400 Crores. It is submitted that the time was of the essence in the delivery of the aforesaid services by the Appellant and it was specifically provided that such services shall be provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued by the Appellant stated that the quantum of debt were disputed by the parties. It is lastly submitted that the dispute admittedly existed prior to the issuance of the demand notice and failure to reply the same would not be entitled the Corporate Debtor to show existence of such pre-existence of dispute. Respondent is willing to pay the balance amount of ₹ 75 lakhs to the Appellant provided the Appellant raises the full and final invoice for the same. It is submitted that there being deficiency in services on the part of the Appellant and the corresponding pre-existing dispute relating to the quantum of the debt as claimed by the Appellant, the impugned order was sustainable. 6. We have given our anxious consideration to the submissions made at the Bar and also examined the record. Facts in regard to contractual relationship inter se the parties are not in controversy. Services were provided by the Appellant to Corporate Debtor for raising finance as also advisory services relating to structuring and placement of debt instrument in private transactions. It is also not in dispute that the Appellant had issued engagement letter dated 08.11.2017 incorporating the terms a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere concluded during the aforesaid term. Admittedly, no suit or arbitration proceedings were pending in regard to any alleged deficiency of service. The fact that another mandate letter dated 03.09.2018 forming Annexure 4 to the appeal paper book was issued in favour of Appellant which was in furtherance of the first mandate letter dated 03.04.2018 forming Annexure 3 to the appeal paper book would per se suggest that the original term of six months in terms of Clause 1.3 was not adhered to and Appellant s action in finding KKR Capital Market India Pvt. Ltd. as an arranger for searching financers was approved. Therefore, it is futile on the part of the Corporate Debtor to raise the grievance that there was a dispute relating to the quality of service. As already noticed no suit or arbitration proceedings were pending on the date of filing of application under Section 7 in regard to quality of service to bring the same within the ambit of dispute as contemplated under Section 5(6)(b) of the I B Code to disentitle the Appellant- Financial Creditor from initiating Corporate Insolvency Resolution Process. No such dispute was even brought to the notice of the Appellant- Financial Cre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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