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TMI Blog2024 (11) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... reditor has failed to provide the NOC and the Corporate Debtor was unable to register the copyright. It is noted that the dispute was real and genuine, and not moonshine or feeble, and is supported by evidence, and also that the Corporate Debtor, despite having made substantial payment as advance, had not used the TVC in absence of copyright. The correspondence and dispute regarding issuance of NOC is prior to the issuance of notice under Section 8 of the IBC, and thus, qualifies to be treated as pre-existing dispute , which is a valid ground for rejection of application under Section 9 of the IBC. The Ld. NCLT had rightly rejected the application under Section 9 of the IBC and we do not find any merit in this appeal - The appeal is accordingly dismissed. - [ Justice Yogesh Khanna ] Member ( Judicial ) And [ Mr. Ajai Das Mehrotra ] Member ( Technical ) For the Appellant : Mr. Anirudh Krishan Gandhi , Ms. Anushree Poddar , Advocates For the Respondents: Mr. Rohit Gandhi , Ms. Smita Jain , Advocates JUDGMENT ( Hybrid Mode ) [ Per : Ajai Das Mehrotra , Member ( Technical ) ] This appeal has been filed by the Appellant- Law Kenneth Saatchi Saatchi Private Limited (hereinafter called ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elivery of the master TVC. 23. The final TVC and the other material provided by LKSS will not violate or infringe any third-party proprietary rights or IPR of any nature whatsoever including any act, rule or regulation for the time being in force or as may be notified by the government from time to time and to that extent LKSS agree to indemnify and hold Client harmless against any claim, demand, action, investigation or other proceeding ('Claim ) including but not limited to all damages, losses, liabilities, judgments, costs and expenses in relation thereto. 26. Files will be handed over in digital format only. Client will be free to make the registration under any of the Intellectual Property Rights Acts. LKSS or Producer will provide the necessary NOC or any other paper which may require for the IP registration to the Client. 6. It is the admitted fact by both the sides that No Objection Certificate (hereinafter called the NOC ) as per the terms and conditions No. 26 was not provided by the Operational Creditor. It is submitted by the Learned Counsel for the Corporate Debtor that through emails dated 07.05.2019 and 05.06.2019 the Corporate Debtor had specifically asked for N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E RIGHTS OF THEOWNER 17. First owner of copyright. Subject to the provisions of this Act, the author of a work shall be the first owner of the copyright therein: Provided that (a) in the case of a literary, dramatic or artistic work made by the author in the course of his employment by the proprietor of a newspaper, magazine or similar periodical under a contract of service or apprenticeship, for the purpose of publication in a newspaper, magazine or similar periodical, the said proprietor shall, in the absence of any agreement to the contrary, be the first owner of the copyright in the work in so far as the copyright relates to the publication of the work in any newspaper, magazine or similar periodical, or to the reproduction of the work for the purpose of its being so published, but in all other respects the author shall be the first owner of the copyright in the work; (b) subject to the provisions of clause (a), in the case of a photograph taken, or a painting or portrait drawn, or an engraving or a cinematograph film made, for valuable consideration at the instance of any person, such person shall, in the absence of any agreement to the contrary, be the first owner of the copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urved Bhawan Pvt. Ltd. [2012 (193) DLT 558], para 33, 35. Marico Ltd. v. Jagit Kaur, [2018 (248) DLT 623], para 11, 12. 14. The Learned Counsel for the Respondent has also relied upon the judgment of NCLAT in Subhash Chandra Goyal v. M/s KB Ispat Private Limited [Company Appeal (AT) (Insolvency) No. 166 of 2022] which has been sustained in Civil Appeal No. 4824 of 2022 by the Hon ble Supreme Court vide order dated 12.08.2022. In the said case, application under Section 9 was not admitted on the grounds of pre-existing dispute as the material supplied by the Operational Creditor was from a tainted source, which has been found to be fictitious by the GST and alert circular has been issued, though the debt was acknowledged and materials were received. It was found that the claim of the Corporate Debtor that its tax cases are assessed undisputedly is a legitimate concern for which the Corporate Debtor had requested the Operational Creditor to provide the bank guarantee till the Corporate Debtor s GST assessment was completed, which the Operational Creditor was not willing to give. This dispute was held to be real and genuine and admission of application under Section 9 of IBC, 2016 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xisting dispute. The relevant portion of the judgment is reproduced below: 33. The scheme under Sections 8 and 9 of the Code, appears to be that an operational creditor, as defined, may, on the occurrence of a default (i.e., on non-payment of a debt, any part whereof has become due and payable and has not been repaid), deliver a demand notice of such unpaid operational debt or deliver the copy of an invoice demanding payment of such amount to the corporate debtor in the form set out in Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Form 3 or 4, as the case may be [Section 8(1)]. Within a period of 10 days of the receipt of such demand notice or copy of invoice, the corporate debtor must bring to the notice of the operational creditor the existence of a dispute and/or the record of the pendency of a suit or arbitration proceeding filed before the receipt of such notice or invoice in relation to such dispute [Section 8(2)(a)]. What is important is that the existence of the dispute and/or the suit or arbitration proceeding must be preexisting i.e. it must exist before the receipt of the demand notice or invoice, as the case may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operational creditor from the corporate debtor or that there is no record of such dispute in the information utility [Section 9(5)(i)(d)], or that there is no disciplinary proceeding pending against any resolution professional proposed by the operational creditor [Section 9(5)(i)(e)], it shall admit the application within 14 days of the receipt of the application, after which the corporate insolvency resolution process gets triggered. On the other hand, the adjudicating authority shall, within 14 days of the receipt of an application by the operational creditor, reject such application if the application is incomplete and has not been completed within the period of 7 days granted by the proviso [Section 9(5)(ii)(a)]. It may also reject the application where there has been repayment of the operational debt [Section 9(5)(ii)(b)], or the creditor has not delivered the invoice or notice for payment to the corporate debtor [Section 9(5)(ii)(c)]. It may also reject the application if the notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility [Section 9(5)(ii)(d)]. Section 9(5)(ii)(d) refers to the notice of an existing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to reject a spurious defence which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defence is likely to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application. [Emphasis supplied] (b) The said judgment has been followed in a more recent judgment dated 04.01.2023 passed by the Hon ble Supreme Court in Sabarmati Gas Ltd. v. Shah Alloys Ltd. [(2023) 3 SCC 229] wherein, in paragraph 56 and 57 it is held as under: 56. In the contextual situation it is only apposite to be remindful of the observation in Mobilox Innovations that in doing the act of separating the grain from chaff the Court need not to be satisfied that the defence is likely to succeed. It is enough that a dispute exists between the parties and in other words, what is to be seen is whether there was a plausible contention requiring investigation for the purpose of adjudication. Taking note of the nature of the dispute of the respondent as referred hereinbefore in respect of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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