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TMI Blog2021 (2) TMI 1090X X X X Extracts X X X X X X X X Extracts X X X X ..... ginary dispute has been raised. Reading the e-mails the impression we have gathered is that after Corporate Debtor placed Purchase Orders and as per the purchase Orders services were rendered by Operational Creditor, Corporate Debtor released some payments but later made Operational Creditor run for its dues to other entities claiming amount had to come from Group M. In such situation only because Operational Creditor approached other entity does not mean that it was a tripartite relationships. It was plain and straight matter. Corporate Debtor placed Purchase Order and Operational Creditor rendered service accordingly which has only been partly paid by Corporate Debtor. In absence of any formal agreement entity placing Order for services is the entity liable to pay when matter is under I B Code, 2016 - it is quite evident that some dues as claimed by the Operational Creditor Inspired Travellers remained unpaid by the Corporate Debtor Katalist View paper Pvt. Ltd.This responsibility cannot be shifted or apportioned to any other party. Whatever informal and internal arrangements exist between Honor, Group M and Katalist View paper Pvt. Ltd. cannot affect or impact status of Inspired ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Debtor to shift liability to Group M is not true dispute with regard to the services taken from the Operational Creditor and services rendered by the Operational Creditor. The defence raised by the Appellant is spurious and illusory and thus can be no basis to deny admission of the Application under Section 9. There are no merit in the appeal - appeal dismissed - decided against appellant. - Company Appeal (AT) (Ins) No. 01 of 2021 - - - Dated:- 22-2-2021 - [Justice A.I.S. Cheema] Member (Judicial) And [Dr.Alok Srivastava] Member (Technical) For the Appellant : Shri Shantanu Chaturvedi, Advocate For the Respondent : Shri Karanveer Jindal and CA Mohit Gulati, Advocates (R-1) Shri Pankaj, Advocate (R-2) JUDGEMENT Per : Dr.Alok Srivastava, Member(T) 1. This appeal has been filed by Gangadhar Udayan Dravid erstwhile Director of Katalist View paper Private Limited under Section 61 of the Insolvency and Bankruptcy Code, 2016 (hereinafter called IBC) aggrieved by the judgment of the National Company Law Tribunal. New Delhi, Bench VI (hereinafter called Adjudicating Authority) in Company Petition (IB) No.671/ND/2020 vide its order dated 18.12.2020 (he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-existence of dispute between the Corporate Debtor and the Operational Creditor. He has also pleaded that the Corporate Debtor was in fact Group M and he was only a collection agent for Group M, passing on payments to the Operational Creditor Inspired Traveller as received from Group M. During the course of arguments, the Appellant s Learned Counsel has brought to our attention various e-mails exchanged between the Operational Creditor, Group M, Honor, Huawei Technologies Pvt. Ltd. and Katalist View paper Pvt. Ltd. starting from June, 2019. The emails impressed upon the Operational Creditor that the payments for the services rendered were undertaken through the Motivator Group M, which was working on behalf of Honor and Group M. Group M routed the payments through Corporate Debtor for services rendered by the Inspired Traveller. The Appellant s Learned Counsel has stated that, therefore, the payments due to the Operational Creditor are not to be made by Katalist View paper Pvt. Ltd. which is not the Corporate Debtor in the situation. 6. The Learned Counsel for Respondent No. 1 has reiterated in his arguments that the purchase orders for providing the relevant services were issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Corporate Debtor has raised purchase orders upon the Operational Creditor for availing the services of the Operational Creditor and terms and conditions of the purchase orders are not disputed. He has also pressed the point that the Operational Creditor has raised invoices of the completed work upon the Corporate Debtor which has been duly received and accepted by the Corporate Debtor. In addition, Corporate Debtor has made certain payments against these invoices to the Operational Creditor and even deducted TDS from such payments. He has argued that there is no dispute with respect to the quality of services provided by the Operational Creditor or with the quantum of debt. The dispute raised by the Corporate Debtor is a sham dispute, which does not constitute a dispute in terms of Section 5(6) of IBC as it is neither related with the quality of services nor to the amount of debt nor any breach of terms by the Operational Creditor. He has also argued that if all the e-mails that have been filed by the Appellate are viewed together, it is quite evident that there are issues between the Corporate Debtor Katalist View paperPvt. Ltd. and other entities, Group M and Honor. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04.12.2019 as per Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 demanding payment of unpaid operational debt, in Form 3, specified in Rule 5 of the aforementioned Rules. In the demand notice, the Operational Creditor mentioned the amount of debt as ₹ 17,80,524/- (Rupees Seventeen Lakhs Eighty Thousand Five Hundred and Twenty Four Only). As per details given in the demand notice, the last payment of ₹ 7,52,328/- (Rupees Seven Lakhs Fifty Two Thousand Three Hundred and Twenty Eight Only) was received by the Operational Creditor on 17.6.2019 from the Corporate Debtor, and thereafter no payment was made by the Corporate Debtor. iv. After issuing of Demand Notice on 4.12.2019 by the Operational Creditor, the Corporate Debtor sent a reply dated 10.12.2019. In the reply he refused his liability to make the pending payment. A catena of e-mails was exchanged between Group M, Honor, Operational Creditor and the Corporate Debtor wherein the Corporate Debtor claimed that the Operational Creditor was taken on board by Group M for delivering the services. In essence, he maintained that Group M hired the Operational Creditor to carry ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sly indicate the issue of account reconciliation between Katalist and Group M. 14. If we dig deeper in the trail of e-mails between various parties and the fact that there was no formal arrangement between the parties, the conclusion is clear that Katalist View paper Pvt. Ltd. is the Corporate Debtor and Saurav Keshan (proprietor of Inspired Traveller) is the Operational Creditor in so far as the services relating to design of advertisements and video productions is concerned, regarding which purchase orders and invoices for payment have also been presented in the case. There is certainly no dispute regarding the quality of work and service given or any other aspect of the services provided by the Operational Creditor to the Corporate Debtor. This is also supported by the fact that Katalist View paper Pvt. Ltd. has been making payments as per invoices raised by Inspire Travellers and only later some payments remained, when this imaginary dispute has been raised. Reading the e-mails the impression we have gathered is that after Corporate Debtor placed Purchase Orders and as per the purchase Orders services were rendered by Operational Creditor, Corporate Debtor released some paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in its name. 17. A dispute is sought to be raised by alluding to the trail of email exchanged between all the parties concerned, which are attached in the appeal paper book on pages 49-71. A close examination of these emails makes it clear that the dispute that is sought to be shown is a creation as an afterthought to escape from the responsibility of making good the operational debt owed by Katalist (the Corporate Debtor). A detailed discussion on this point has already been done. 18. It stands to reason that the Operational Creditor Inspired Traveller should not be made victim of the unresolved issues of accounts reconciliation between Group M and Katalist View paper Pvt. Ltd. This dispute has no relevance to the provision of services or its quality by Inspired Traveller and, therefore, it is not a dispute as covered under Section 5(6) of IBC. Since it is not a pre-existing dispute regarding the services rendered by the Operational Creditor and hence, it will have no cover of help from the judgment of the Hon ble Supreme Court in Mobilox Innovations Pvt. Ltd. vs. Kirusa Software Pvt. Ltd. (2018) 1 SCC 353, as has been claimed by the Appellant. 19. In the light of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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