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TMI Blog2021 (6) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016, 25.5.2017, 2.7.2018 and 9.8.2018. The first invoice that is included in the demand notice which is due for payment is of 22.2.2018. All the other invoices included in the demand notice are of dates later than 22.2.2018 - It is not clear why the same issue is raised again by the corporate debtor for later invoices. It appears that this issue has been shown as a pre-existing dispute as an afterthought by the Respondent. While there is dispute about the rate of interest claimed by the Appellant it does not significantly alter the quantum of unpaid debt, which will remain to be above Rs. One Lakh. Thus, the application is maintainable on account of the unpaid debt being more than Rs. One Lakh, the threshold amount. Appellant not printing the newspaper for 16 days and the loss incurred by the Respondent on this account - HELD THAT:- The Clause 3 of the agreement stipulates that the responsibility of supplying newsprint lay with the Corporate Debtor. Hence this issue does not provide any help to the Respondent in his case. High percentage of wastage of newsprint in printing - HELD THAT:- The said agreements make it very clear that the minimum number of chargeable copie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground of pre-existing dispute. 2. While the precise amount of debt in default is disputed by the Respondent, he has not disputed that the amount in default is more than Rs. One lakh which is the threshold for maintainability when the application under Section 9 of IBC was filed by the Appellant before the Adjudicating Authority. 3. The facts of the case are as follows: The Appellant (Operational Creditor) Manipal Media Network Private Limited, and the Respondent (Corporate Debtor)Vishwakshara Media Private Limited, entered into three separate agreements wherein the Appellant became the printingpartner of Corporate Debtor for printing of three newspaper editions and supplements of newspaper Vishwavani issued from Gulbarga, Hubli and Manipal. These three separate agreements, all signed on 4.12.2015, have been entered into between the Appellant and the Respondent first one relating to the Gulbarga printing facility, the second one relating to the Hubli printing facility and the third one relating to the Manipal printing facility for Vishwavani newspaper and its supplements. The Appellant s case is that the Respondent kept on making requests through emails for printing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 18 days in filing this appeal. Looking to the reasons presented by the Appellant in IA No. 969/2020, we condone the delay in filing this appeal. 6. The Respondent has submitted his reply cum objections to the Appeal Memo upon which the Appellant has filed rejoinder. Both the parties have submitted their written notes and presented oral arguments in detail. 7. The Appellant has also stated that the Adjudicating Authority has made an unjustified conclusion in the Impugned Order that the debt is based on an agreement that has lapsed and the application under Section 9 of IBC filed by the Appellant is untenable which is basically for recovery of the amount alleged to be due and also that there was a pre-existing dispute. The Adjudicating Authority has also held that the amount claimed in invoices which includes 18% rate of interest applied on pending amount is not in accordance with the relevant clause of the agreement and the Adjudicating Authority is not required to do an enquiry to calculate the exact amount due. On these grounds the application of Appellant under Section 9 of IBC has been dismissed. 8. The Ld. Counsel for Appellant has stated in the written submission t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2018. In support he has attached copies of print orders given by the Respondent Corporate Debtor from December 2018 to August 2019 in the appeal memo (attached at pages 15 to 462 of the Appellant s Rejoinder). The Appellant has claimed that the payments have to be made within 7 days of raising of invoices as per Clause 8 of the agreement. 10. The Learned Counsel for Appellant has argued that for 16 days there was no printing, since the Corporate Debtor failed to supply newsprint for printing of the newspaper editions and supplements. In support of his arguments, the Applicant has cited e-mail dated 7.3.2018 (page 205 of Appeal Memo) from Basavaraju, an employee of Corporate Debtor to Sudarshan Sherigar, an employee of Operational Creditor. Again on 7.3.2018, Sudarshan Sherigar wrote an email that newsprint is not reaching on time and they do not have any newsprint stock to print the newspaper. Vishveshwar Bhatt of the Corporate Debtor wrote on 5.3.2018 to Sudarshan Sherigar that since there is newsprint crunch there are delays in sending it to Manipal. Again in an e-mail dated 27.2.2018 a representative of Corporate Debtor has urged the Operational Creditor to use newsprint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld have been charged at 15% per annum as per the agreement, whereas the Appellant has claimed 18% per annum as interest on the pending amount. Finally, the Respondent's Ld. Counsel has claimed that the provisions of IBC can be used only in cases of insolvency and bankruptcy and cannot be invoked for recovery of amounts that are outstanding. 13. The issues that are germane to this appeal are: (i) Whether the agreement that had allegedly lapsed on 3.12.2017 was extended by conduct, as has been claimed by the Appellant and whether the printing jobs carried out at the request of Corporate Debtor will be covered by the terms of the agreement (ii) Whether the percentage of wastage of newsprint and the minimum number of chargeable copies are in consonance with the provisions in the agreement and is there a preexisting dispute regarding percentage as has been claimed by the Respondent, (iii) Whether the Appellant can invoke provisions of IBC in view of Clause 24 of the agreements for printing, which relates to arbitration under Arbitration and Conciliation Act. 14. When we consider the conduct of the parties after the lapse of the said agreement on 3.12.2017, we find th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid operational debt- (i) by sending an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the corporate debtor; or (ii) by sending an attested copy of record that the operational creditor has encashed a cheque issued by the corporate debtor. Explanation. - For the purposes of this section, a demand notice means a notice served by an operational creditor to the corporate debtor demanding repayment of the operational debt in respect of which the default has occurred. 9. (1) After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub-section (2) of section 8, the operational creditor may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process. (2) xxxxxxxxxx 16. The Demand Notice has to be responded to within 10 days, as required in Section 8(2) for the purpose of bringing to the notice of the operational creditor the existence of a dispute or evidence of repay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about the rate of interest claimed by the Appellant it does not significantly alter the quantum of unpaid debt, which will remain to be above Rs. One Lakh. We, thus find, that the application is maintainable on account of the unpaid debt being more than Rs. One Lakh, the threshold amount. 20. Another issue raised by the Respondent relates to the Appellant not printing the newspaper for 16 days and the loss incurred by the Respondent on this account. The Clause 3 of the agreement stipulates that the responsibility of supplying newsprint lay with the Corporate Debtor. Hence this issue does not provide any help to the Respondent in his case. 21. Finally coming to the issue of high percentage of wastage of newsprint in printing, as alleged by the Corporate Debtor, we find that the said agreements make it very clear that the minimum number of chargeable copies will be 10,000. In addition, the said agreements also stipulate that the wastage will be less than 4%. This wastage, quite obviously, is in relation to printing of 10,000 copies. It is understood that in printing jobs as the number of copies increase the quantum of wastage decreases and, conversely, as the number of copies d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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