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TMI Blog2023 (1) TMI 1144X X X X Extracts X X X X X X X X Extracts X X X X ..... te Insolvency Resolution Process ('CIRP' in short) against the Corporate Debtor with immediate effect. Aggrieved by this impugned order, the present appeal has been preferred by the suspended director of the Corporate Debtor. 2. The brief facts of the case as brought out by the Learned Counsel for the Appellant is that Swiss Entertainment Private Limited, the Corporate Debtor was in the business of producing and making movies which entered into a business engagement with Epigram, the Operational Creditor which was into integrated marketing and creative communication. The agreement was entered into on 28.08.2017 by which the Operational Creditor was to provide digital marketing services and carry out printing job of publicity material for the Corporate Debtor for a film named "Haseena Parker" produced by them. 3. Elaborating further on the terms and conditions of the engagement letter and emphasising that these terms and conditions had been unconditionally accepted by the Operational Creditor, the Learned Counsel for the Appellant submitted that the Operational Creditor was to receive an amount aggregating Rs.66,00,000/-for executing this job and that if the work done was not sati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35,00,000/- towards digital media marketing and another sum of Rs.31,00,000/- towards printing job besides additional liability arising from additional printing job. The Operational Creditor claimed that the total outstanding payment due from the Corporate Debtor amounted to Rs.55,38,347/- which was reflected in Part IV of Form-5 submitted along with the Section 9 application. Submitting that in terms of the engagement letter of 28.08.2017, all printing job was to be done as per requirement of AA Films which was the distributor of the film Haseena Parker, it was added that they had delivered quality service and their work was appreciated by the Director of the movie Haseena Parker which is on record. The movie was released on 22.09.2017. It has been vehemently claimed that no defects or disputes were ever raised by the Corporate Debtor in the services offered by them and that the Corporate Debtor in order to evade the outstanding payment to the Operational Creditor has created the false pretext of lack of quality in the material printed. 8. We have duly considered the detailed arguments and submissions advanced by the Learned Counsel for both the parties and perused the records ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporate Debtor had denied the liability to pay any outstanding amount to the Operational Creditor in their reply to the Legal Notice which predates the Demand Notice. The relevant excerpts from the reply to the Legal Notice which has been placed on record by the Appellant at Page 112-113 of APB is reproduced below: - "3. At the outset, it is vehemently denied that my Clients owe your Client a sum of Rs.36,75,680.18/- (Rupees Thirty Six Lakhs Seventy Five Thousand Six Hundred And Eight Rupees and Eighteen Paise Only) along with interest at the rate of 18% per annum. Your Client has failed to appraise you of the fact that he had failed to live up to my Client's expectations with respect to the Digital Marketing of the movie Haseena. That my Clients are not liable to pay your Client any monies, on the contrary, your Client is liable to pay my Clients Rs.70 Lakhs as per the engagement letter dated 28.08.2016 which your Client has agreed to and signed upon." We also note that the Corporate Debtor in their reply dated 09.08.2018 (as placed at Page 168 of APB) to the Section 8 Demand Notice had reiterated that they do not owe any money with regard to invoices specified by them in thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thought and that there is no evidence presented to demonstrate their dissatisfaction with the work done by the Operational Creditor. 15. We therefore, now come down to examine whether there was any pre-existing dispute between the two parties which was more than a patently feeble legal argument. 16. It is a well settled that the guiding principles on treatment of Section 9 application have been laid down by the Hon'ble Supreme Court in Mobilox Innovations (P) Ltd. v. Kirusa Software (P) Ltd. (2018) 1 SCC 353 ('Mobilox' in short). It is relevant to refer to paras 51 and 56 of the said Judgment which is extracted as hereunder: 51. It is clear, therefore, that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application under Section 9(5)(2)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the "existence" of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the satisfaction of the Producer and not to any third party. It will be useful at this juncture to note the contents of the said engagement letter which is as below. "Dt:- 28.08.2017 To, Epigram, Roop Mangal Bldg, 3RD Floor, Near Rajesh Khanna Garden, 16TH Road, Santacruz-West, Mumbai - 400 054. Sub: -Your engagement for social media marketing and printing job for the film "HASEENA PARKAR" Dear Sir, Towards the performance of your services for digital media marketing and printing job for our film as needed by us we agree to pay Rs.35.00 Lakhs (Thirty Five Lakhs Only) including applicable GST for digital marketing and Rs.31.00 Lakhs (Thirty One Lakhs Only) including applicable GST for overall printing job towards our upcoming movie HASEENA PARKAR. All printing job will be done as per the requirement from AA FILMS. Above mentioned amount will be inclusive for all your digital marketing services and professional charges and printing job and no extra amount will be paid other than the agreed amount towards the services for the whole movie. Epigram will pay Rs.70.00 Lakhs (Seventy Lakhs Only) to the producer if the promotion is not done to the satisfaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at it is extremely preposterous that your Client had changed and with held the YouTube channel and Twitter account password of my Clients which has caused immense loss to them. Your Client was in charge of the digital marketing of the movie Haseena Parker and this illegal act of hijacking my Clients social media accounts was completely despicable. That the said accounts were under the name of my Clients, Swiss Entertainment. That your Client has been extremely unprofessional in his work and moreover extremely lethargic with his deliveries. My Clients sent repeated requests to your Client via several e-mails to release the passwords as my Clients were suffering from financial losses due to the same and were unable to promote their upcoming movies. However, your Client refused to do so thereby committing offences punishable under the Indian Penal Code, 1860 and the Information Technology Act, 2000". (Emphasis supplied) 21. Similar disputes with regard to poor services and hijacking of social media accounts have been articulated by the Corporate Debtor in their reply to the Demand Notice dated 09.08.2018, relevant excerpts of which is as extracted below: - "2..... My Clients stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the interests of justice. In support of their contention, reliance was placed on the orders of this Tribunal in Company Appeal (AT) (Ins) 592 of 2020 dated 20.10.2020 wherein it was held that "the placing of letters/communications as additional documents in an appeal squarely depend upon whether the same are required to a Tribunal to enable it to deliver a judgment". Having perused the emails, we find that they are linked to the controversy between the two parties which had been raised before the Adjudicating Authority and therefore find them relevant to decide whether there was a dispute between the two parties in the facts of the present case. Since no extraneous issues or considerations have been raised in these emails other than what was mentioned before the Adjudicating Authority, we find no reasons to agree with the Respondent No.1 for not taking cognisance of these emails contained in IA No. 4032 of 2022. 24. Now, coming to the material on record placed in I.A. No. 4032 of 2022, it has been pointed out by the Learned Counsel for the Appellant that there are several email communications from the Corporate Debtor which show dispute relating to the quality of services perfo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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