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TMI Blog2021 (11) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... ional Creditor by offering lower prices for the advertisement. The Bench notes, that the Operational Creditor had given an assurance to the Respondent that the important clients like LIC, Bank of Baroda and PNB who are currently with the Respondent will not be taken over by offering a lower price by the Operational Creditor, Infobay Interactive Private Limited as they are its long existing clients - The Bench notes that the basis of the dispute posed by the Corporate Debtor is based on his averments that Mr. Jerald Stephen was in connivance with the Operational Creditor and got the orders of the Corporate Debtor diverted to the Operational Creditor. However, the Bench finds that this argument does not hold ground based on the fact that Mr. Jerald continued as an employee of the Corporate Debtor till May 2017 and all the bills/invoices and payments relate to the period up to 31st March 2017 which pre-dates the month of resignation of Mr. Jerald Stephen. It is clear to the Bench that the Corporate Debtor is in default of a debt due and payable and the default is in excess of minimum amount of ₹ 1 lakh stipulated in u/s. 4(1) of the IBC. In view of this, the Company Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1617-24 678000 339000 15.03.2017 15.04.2017 2016-17 INV- CCMPL- D-1617-32 1299500 545790 15.03.2017 15.04.2017 01.01.2017 TO 31.03.2017 INV- CCMPL- D-1617-33 2237400 939708 15.03.2017 15.04.2017 01.01.2017 TO 31.03.2017 INV- CCMPL- D-1617-34 678000 284760 Grand Total 10723700 5527734 A scanned sample copy of one of the Invoices raised on 01.07.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the Corporate Debtor had an understanding of 50-50% profit sharing ratio to a minimum payment/guarantee of ₹ 90,000 per month per Kiosk, i.e., ₹ 60,000 per month per Kiosk to be paid on monthly basis to be paid before 10th of every month and ₹ 30,000 per month per Kiosk to be calculated every quarter and to be paid within 60 days from that date. 3.6. The Petitioner further submits that the Corporate Debtor generated a business of an amount of INR 3.75 Crore by using the Operational Creditor's Kiosk and received timely payments from the clients. 4. As per the Petition the date of default is on 01.08.2016. 5. According to the Petitioner, the Corporate Debtor has acknowledged the debt amount due and payable to the Operational Creditor. 6. The Petitioner issued a Demand Notice in Form No. 3 u/s. 8 of the IBC on 19.02.2019 to the Corporate Debtor demanding payment in respect of unpaid operational debt. 7. The Petitioner mentioned that in spite of receipt of the said Demand Notice on 21.02.2019 by the Corporate Debtor, the claim amount has not been settled by the Corporate Debtor. Therefore, the Petitioner filed the present Petition u/s. 9 of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 9.1. Further, the Respondent submits that serious disputes exists prior to the date of issue of Section 8(2) Demand Notice by the Applicant. The Applicant is in clear breach of the terms of the Amendment Agreement and is guilty of various tortious acts causing grave damage, injury and loss to the Respondent. Further the Respondent mentions that these facts were brought to the notice of the Applicant as far back as in 2017 by written legal notice, however, the Applicant chose to remain silent and did not address any of the allegations levelled by the Respondent. Thus, there is pre-existing disputes between the Applicant and the Respondent. 9.2. The Respondent vehemently submits that it is a settled law that in the event there is a pre-existing dispute in terms of Section 8(2) of the Code, the alleged Operational Creditor as also the alleged Operational Debt falls out of the ambit of the Code, i.e., a proceeding under the Code is thereafter not maintainable and, therefore, in terms of Section 9(5)(ii)(d) of the Code, the Petition is liable to be rejected. 9.3. According to the Respondent, the Applicant suppressed the fact that the Agreement between the parties contained a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... default whatsoever. Further submits that the email correspondence, in fact, is an evidence and admission of the pre-existing disputes between the Applicant and the Respondent. Also submits that in view of the Respondent's reply to the statutory demand notice, the Petition is not maintainable as per Section 9(1) of the Code, therefore, in terms of Section 9(5)(ii)(d) of the Code, the Petition be dismissed. Also submits that the Petition is not accompanied by (a) An Affidavit as required by Section 9(3)(b) of the Code or (b) A copy of the certificate from the financial institutions as required by Section 9(3)(c) of the Code and therefore, not maintainable. 10. Rejoinder by the Petitioner In the Rejoinder the Petitioner submits that:- - The Corporate Debtor wrongfully alleges the intentions of the Operational Creditor in filing application with the Hon'ble Tribunal and is hindering with the rights of the Operational Creditor to approach the Tribunal under the Code. - Non-payment of the invoices for the legitimate dues by the Corporate Debtor for the Kiosks provided by the Operational Creditor is itself a default as defined under Section 3(12) of the Code. - That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 1,07,23,700/- along with interest of ₹ 55,27,734/-. 12. In Part-IV of Form No. 5 in the Petition, it has been mentioned that the Operational Creditor had assigned exclusive rights for advertisement to the Corporate Debtor of the MCGM in kiosks installed in Mumbai. This arrangement between the parties by way of an agreement was dated 08.08.2014 was based on 50-50% profit sharing ratio and certain minimum payment/guarantee per month per kiosk. However, subsequently the Agreement between the parties was revised (Revised Agreement) on 09.03.2016. 13. As per the revised Agreement, both the parties were free to compete with each other as per Clause-I of the Agreement subject to other provisions of the Agreement. It is the case of the Corporate Debtor that the Section which restricts the Operational Creditor was essentially relating to taking over the existing clients of the Corporate Debtor by the Operational Creditor by offering lower prices for the advertisement. 14. However, the Bench notes that it is the contention of the Petitioner that the Corporate Debtor again failed to make full payment according to the revised agreement for the four kiosks which as per the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Private Limited (Brandesque). The Respondent, without attaching any proof, further mentions that this Brandesque Media was a front of the Operational Creditor Company which had taken away lot of business from the Corporate Debtor and thereby leading to a substantial loss of revenue to the Corporate Debtor. The Bench notes that the basis of the dispute posed by the Corporate Debtor is based on his averments that Mr. Jerald Stephen was in connivance with the Operational Creditor and got the orders of the Corporate Debtor diverted to the Operational Creditor. However, the Bench finds that this argument does not hold ground based on the fact that Mr. Jerald continued as an employee of the Corporate Debtor till May 2017 and all the bills/invoices and payments relate to the period up to 31st March 2017 which pre-dates the month of resignation of Mr. Jerald Stephen. The Bench further notes that the Corporate Debtor cannot blame the Operational Creditor, who in any case, was free to compete with the Corporate Debtor by merely alluding to an allegation that it lost business because of unproven alleged misdeeds of its employee. It is also a settled case that internal management of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Invoice Amount after Tax Total TDS deducted Total TDS Deposited Date of Booking 01-07- 2016 19,80,000 22,77,000 39600 39600 22 nd Nov 2016 01-10- 2016 19,80,000 22,77,000 39600 39600 31 st Jan 2017 02-01- 2017 19,80,000 22,77,000 39600 39600 31st May 2017 22. The very fact that the Corporate Debtor has paid TDS leaves no iota of doubt with the Bench that it has availed the services as enumerated corresponding to that particular invoice. The Bench notes that the total value of these 3 invoices for which the TDS has been paid comes to about ₹ 59,40,000. The Petitioner in his 'Rejoinder' has submitted Form 26AS admitting the deduction of TDS and payment to Tax Authorities, which is as under:-. 23. Therefore, even assu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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