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TMI Blog2024 (3) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... llant-Khimji Poonja Freight and Forwarders seeking to bring the Corporate Debtor-M/s Ingram Micro India Pvt. Ltd. under the rigours of Corporate Insolvency Resolution Proceedings ('CIRP' in short) on the grounds of pre-existing dispute. Aggrieved by this impugned order, the present appeal has been preferred. 2. The Learned Senior Counsel for the Appellant making his submissions on the factual matrix stated that Appellant/Operational Creditor was engaged in the business of Freight Forwarding and related services. The Appellant had entered into a Customs Clearance Agreement ('CCA' in short) on 27.11.2007 with Respondent/Corporate Debtor for clearing and forwarding goods of the Respondent. Subsequently on 22.10.2009, the two parties entered into an Agency Agreement vide which the Appellant was responsible for claiming and obtaining refund of Special Additional Duty ('SAD') on behalf of the Corporate Debtor. The Appellant also discharged other contracts of the Respondent and maintained a common running account for this purpose though there was no specific understanding as such regarding the payment modalities. 3. It was further submitted that the Appellant raised invoices from time t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the SAD claims and therefore excluded, yet the claims under CCA, on which there are no disputes, aggregate to Rs. 1,65,618/- only which amount is above the threshold level of Rs. 1 lakh prescribed under Section 4 of IBC. Hence, this outstanding amount was sufficient for admission of Section 9 application. 5. It was contended that the grounds of pre-existing dispute raised by the Respondent were illusory and created only to wriggle out from clearing the outstanding liability. The Adjudicating Authority had erroneously admitted the Section 9 application without looking into the plausibility of the alleged dispute. 6. Making counter submissions the Learned Counsel of the Respondent vehemently contended that the Appellant had clearly breached clause 7 of the Agency Agreement which is the fountainhead of pre-existing dispute between the two parties. It was submitted that it is an undisputed fact that in March 2011, the CBI had arrested some officials of the Appellant which had also led to summoning of some of the officials of the Respondent by the CBI for investigation. This conduct of the Appellant tantamounted to violation of the clauses of the Agency Agreement and this incident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent by 24.04.2015. Moreover, as this MoM was not disputed by the Respondent, the Corporate Debtor had implicitly admitted their liability therefore cannot deny payment by raising the bogey of pre-existing disputes. 9. It is also contended by the Learned Sr. Counsel for the Appellant that the purported termination of the Agency Agreement happened subsequent to the letter of 12.03.2015 sent by them to the Respondent asking for review of their business relationship. Hence, the Respondent was still liable to pay the debt under the invoices raised from 2010 to 2014 as they had accrued prior to the purported termination. It is also contended that several reminder emails were also sent by the Appellant for payment of outstanding dues which have been placed at pages 168-195 of the Appeal Paper Book ('APB' in short). The fact that the Respondent did not deny the demand raised in the reminder emails shows that it was a deemed acceptance of liability on their part. 10. Before dwelling on the facts of the present case and weighing the rival submissions of the two parties, a quick glance at the relevant statutory construct of IBC would be useful. Section 8 of the IBC requires the Operational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge by you. The Matrix of facts that has given rise of the dispute is detailed herein under: a. You are aware that there was an Agency Agreement executed between our clients and you [herein after referred to as "said Agreement"]. By the said Agreement you were required to discharge the obligations in accordance with terms recorded therein. By virtue of Clause 7 of the said Agreement you were required to refrain from making payments to any government officials for the purpose of securing any advantage either in favour of our Clients or otherwise. Clause 7 of the said Agreement has been reproduced herein below for your ready reference: ...... b. In breach of material representation as contained in clause 7.1 of the said Agreement, you entered into a series of transactions of payment of illegal gratification with the officers of the Customs and consequently, several officers of the Customs and Senior Officers of your Company were arrested by the Central Bureau of Investigation [hereinafter referred to as "CBI"]. ..... f. Much to the dismay of our Client even Senior Officers, including the Managing Director of our Clients were summoned by the CBI court and asked to furnish docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egards the pre-existing dispute, the Corporate Debtor has drawn our attention to Clause 7 of the Agency Agreement which is reproduced below:- "7.1 In performing this agreement, Agent shall comply with all applicable laws, rule and regulations of the Territory and shall indemnity and save Ingram Micro harmless from agents's failure to do so. Furthermore, if this agreement, the relationship created hereby of the performance hereof is determined by Ingram Micro to be contrary either. (1) to the laws, rules or regulations of the Territory now or hereafter in effect, or (2) to Agent's representations set forth in this clause, this agreement may be terminated effective immediately by Ingram Micro upon written notice to agent and in such case, shall be deemed null and void from its inception and any compensation paid or accrued hereunder shall be forfeited by agent, and no further compensation payments paid or accruals shall be made by Ingram Micro for Agent's account. In this regard, Agent recognizes that Ingram Micro has entered into this Agreement with agent in material reliance on the following representations made by agent that: Agent has not made, and will not make any direct or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty are of summary nature and any disputes relating to adjudicating of rights and liabilities of the parties are beyond the scope of the Adjudicating Authority under section 9 of the Code. As held by the Hon'ble Supreme Court in Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited (2018) 1 SCC 353, what the adjudicating authority is to see is "whether there is a plausible contention which requires further investigation and that the "dispute" is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster". 15. We however notice that the Appellant has assailed the impugned order and contended that the CBI proceedings were against officials of the Appellant in their personal capacity and not against the Appellant company and hence cannot be a ground for dispute between the Operational Creditor and the Corporate Debtor. It was also asserted that the FIR filed by CBI did not relate to the 8 SAD invoices and hence these payments cannot be withheld. Moreover, in the absence of any written termination of the Agency Agreement, the terminati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... another communication sent on 12.03.2015 by the Appellant in which they have sought review of the termination of their services by the Corporate Debtor. This letter has been placed on record at pages 140-141 of the APB. The said communication also reads like an admission of aberration committed on their part and failure to meet the exacting standards of compliance expected by the Corporate Debtor leading to the punitive action of termination of services. It is also pertinent to note that this letter again pre-dates the demand notice and relevant portions are extracted for convenience as under: "From: JUBI-Khimji Poonja FPL[[email protected]] Sent: Thursday, March 12, 2015 2:37:34 PM To: '[email protected]' Cc: 'Blasé [email protected]', 'DILIP MULANI', 'Dushyant Mulani' Subject: Business Meeting- Request for Review M/s. Ingram Micro Ltd., (IMIL) Mumbai. Kind Attn: Mr. Jaishankar Krishnan-Managing Director Dear Sir, Re: Business Meeting-Request for Review ".....We have duly noted decision of your Management to terminate our services with immediate effect due to reported compliance issue. In the said manner, we may reiterate our due sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hvi Movers Limited in CA (AT) (Ins.) No. 648 of 2022 also cannot assist the Appellant since in the present case the dispute was clearly raised prior to the issue of Demand Notice. 20. At this juncture, we wish to refer to the Mobilox judgement, which has been relied upon by the Adjudicating Authority wherein the Hon'ble Apex Court while interpreting Sections 8 and 9 of IBC has laid down the guiding principles on how to examine the existence of disputes between the parties. It may be useful to notice the relevant part of the judgement as reproduced below : "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 adjudicating authority is to see at this stage is whether there is a p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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