TMI Blog2024 (11) TMI 1051X X X X Extracts X X X X X X X X Extracts X X X X ..... itself has commenced investigation and filed the Police Complaint as well as directed for investigation through Ernst and Young, which is an admitted fact. Appellant in his Appeal has brought on record the Police Complaint which was submitted by Appellant on 24.02.2023. The correspondence between the Parties which relates to the payments which are subject matter of Demand Notice and Section 9 Application is clear communication by Corporate Debtor that payments have been put on hold indicates that there was dispute raised by Corporate Debtor with regard to entitlement and payment of the invoices which are subject matter of Section 9 Application much before issuance of Demand Notice dated 06.11.2023. Thus, it is clear that the claim of Appellant for payment of invoices which are subject matter of Section 9 Application was disputed much before Demand Notice was issued - In facts of the present case, Adjudicating Authority has not committed any error in refusing to initiate CIRP, there being Pre-Existing Dispute which is reflected with the correspondence which took place between the Parties much prior to issuance of Demand Notice. Thus, no error has been committed by the Adjudicating A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Multiplier Brand Solutions Private Limited. vii. The Amazon Wholesale (India) Private Limited issued Purchase Order from 06.10.2022 to 04.05.2023, pursuant to Purchase Order, Operational Creditor, rendered deployment of manpower and related services for Amazon Device Project and raised invoices totalling to ₹3,69,57,379/-. Invoices were between 30.03.2023 to 26.05.2023. viii. Appellant requested the Respondent seeking approval of the invoices. Appellant received the response that invoices are approved for processing. Email dated 02.05.2023 was also received from the Corporate Debtor that 2 invoices are ready for payment but delayed for Settlement. Appellant sent various reminders to the Respondent requesting for clearing the outstanding dues. ix. The Corporate Debtor wrote to the Operational Creditor, vide email dated 02.06.2023, the Corporate Debtor has asked the Operational Creditor to share several data. There being allegations of fake data submitted by Operational Creditor with regard to its Amazon other project with regard to which investigation had commenced by the Appellant itself several documents was called by Corporate Debtor. The Corporate Debtor also asked for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the Section 9 Application was filed where invoices issued subsequent to the Novation Agreement between the Parties dated 01.04.2021. It is submitted that there is no dispute with regard to 8 invoices which was issued by the Appellant between the period 30.03.2023 to 26.05.2023, totalling to ₹3,69,57,379/-. It is submitted that said invoices were also approved by the Corporate Debtor. An email was received from the Corporate Debtor that invoices are ready for payment but delayed due to Settlement. Appellant sent various reminders to the Corporate Debtor for payment of outstanding amount. No outstanding payments having been received Demand Notice under Section 8 was issued on 06.11.2023 to which a Reply dated 18.11.2023 was received from the Corporate Debtor. In the Reply to the Demand Notice, Corporate Debtor has raised issues pertaining to ongoing investigation with regard to transaction pertaining to Vodafone Project, which have no concern with the invoices which are subject matter of Section 9 Application. There being no dispute with regard to invoices which have been raised by the Appellant in pursuance of Purchase Order received from Corporate Debtor, any alleged disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd fictitious due to which excess amount has already been paid. Appellant himself has filed Police Complaint alleging fraud committed by its own employees in transaction with Amazon Seller Services Private Ltd. Appellant itself has entrusted the investigation of entire transaction to Ernst and Young, which Report has never been shared with the Corporate Debtor. Large scale fraud having been committed by the staff and employees of the Appellant in transaction providing service with the Amazon Seller Services Private Ltd, the Corporate Debtor had rightly withhold the payment under invoices as claimed by the Appellant. The Corporate Debtor is entitled for rights, interest and liabilities which was pertaining to Master Service Agreement by virtue of Novation and Substitution Agreement dated 01.04.2021, hence the transaction which cause rights, liabilities and obligations on Corporate Debtor are relevant and any dispute raised with the entitlement of the Appellant under such transaction under which huge excess payment has been made are relevant factor on basis of which there were hold on the amounts payable to the Appellant under the invoices. There being clear cut Pre-Existing Dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enter into Work Orders with Service Provider under this Agreement, and with respect to such Work Orders, such Affiliate becomes a Party to this Agreement and references to Amazon in this Agreement are deemed to be references to such Affiliate. With respect to Amazon, each Work Order is a separate obligation of the Amazon entities or entity that execute(s) such Work Order and no other Amazon Affiliate entity has any obligation under such Work Order. Amazon makes no promises or representations whatsoever as to the amount of business Service Provider can expect at any time under this Agreement. It is further clarified that nothing in this Agreement prevents Amazon or any of its Affiliates from procuring same or similar Services from any other third party. 1.2. Work Orders. This Agreement governs each Work Order, except that any conflict between the terms of this Agreement and a Work Order will be resolved in favor of the Work Order, if the Work Order explicitly states that it is intended to modify the conflicting terms of this Agreement. This Agreement does not obligate Amazon to engage Service Provider to perform any Services, or Service Provider to perform any Services, until both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovider will provide at least as favorable pricing treatment, as the pricing provided to any other entity or person purchasing services substantially similar to the Services. If Service Provider provides services substantially similar to the Services, at prices better than the prices extended to Amazon hereunder, the Service Provider shall offer at least the same favorable pricing to Amazon, on all subsequent purchases of the Services. 9. The above Master Service Agreement clearly provided that the Agreement was with respect to Work Orders which were to be issued by Amazon Seller Services Private Limited or any of the affiliates of the Amazon group. Novation and Substitution Agreement was executed on 01.04.2021, which reads as under : NOVATION AND SUBSTITUTION AGREEMEMT This novation and substitution agreement ( Agreement ) is entered into at Bangalore, on this 01/04/2021 and is effective on and from April 1, 2021 ( Effective Date ), amongst: 1. Amazon Seller Services Private Limited, a private limited company incorporated under the laws of India and having its registered office at 8m Floor, Brigade Gateway, 26/1, Dr. Rajkumar Road Bangalore, Karnataka - 560055, India (hereinafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt (whether arising before or after the Effective Date) may only be enforced by Company against Transferee directly, and not against Transferor. 11. Now we come to the case taken by the Appellant in Section 9 Application. Appellant s case is that after the Novation Agreement dated 01.04.2021, Work Orders were received from the Corporate Debtor and in pursuance of which services were provided and invoices were issued by the Appellant from 30.03.2023 to 26.05.2023, totalling to ₹3,69,57,379/-. Appellant sent the various emails and reminders to the Corporate Debtor for payment of the aforesaid amount of ₹3,69,57,379/-. There was correspondence between the Parties in the above regard. When amounts were not paid the Section 8 Notice were issued by the Appellant on 06.11.2023. Section 9 Notice was issued where Purchase Order and payment pertaining to invoices from 30.03.2023 to 26.05.2023 was claimed Master Service Agreement as well as Novation Agreement was relied in the Section 8 Notice. The Notice was replied by the Corporate Debtor vide email dated 18.11.2023. In the Reply Notice, the Corporate Debtor has denied and disputed the contents of Demand Notice and pleaded that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yees as per the MSA and under law, as Multiplier was the principal employer of these employees. 7. The MSA clearly and unequivocally states that Multiplier will be responsible for all acts, omissions, negligence and misconduct of its employees performing the services and Multiplier will be solely responsible for all threat, damage and misconduct related to its employees. 12. It was further pleaded by the Corporate Debtor that Multiplier Brand Solutions Private Limited has issued Demand Notice despite being aware that Amazon has been investigating transactions regarding Vodafone Project. Correspondence dated 12.06.2023 and 16.06.2023 was also referred to and it was pleaded that Appellant is also participating in the fact finding exercise. It was further pleaded that Multiplier Brand Solutions Private Limited is admitted that its employees have been guilty of fraud. Following was pleaded in Paragraph 12 13 of the Reply, which is as follows: 12. Multiplier has issued the Demand Notice despite being aware that Amazon has been investigating these concerns. Multiplier has been informed of the fraudulent scheme at various times including in-person meetings held on June 02, 2023 and August ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended the meeting. 22. During this meeting, parties discussed all businesses where Multiplier provided services to Amazon. Multiplier also informed Amazon that it had engaged EY to conduct a fact-finding exercise. Multiplier explained its operations and services provided to Amazon. Undisputedly, there were gaps in the explanations and documents were required to support the concerns that were discussed during the meeting. Therefore, Amazon sent an email dated June 02, 2023 after the meeting, asking for specific and material documents and information. The information sought inter alia, all invoices raised on Amazon by Multiplier, including A WIPL. The invoices were sought in order to investigate and verify the services provided by Multiplier under the MSA. 23. In light of the above, Multiplier has been aware of the concerns raised by Amazon, including AWIPL. In response to the request for information, Multiplier shared partial information by an email dated June 12, 2023 and informed Amazon that the data compilation was taking time due to the voluminous nature of the requisition. Multiplier also requested Amazon to release payments towards various projects. 24. Amazon responded to Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement which was initially entered between Amazon Seller Services Private Ltd. and the Appellant was subsequently novated with Amazon Wholesale (India) Private Limited, the Corporate Debtor. 17. We have already noticed the relevant Clauses of Agreement dated 01.04.2021, under which the Transferee i.e. Amazon Wholesale (India) Private Limited has taken all rights, interest and liabilities and obligations under the Principal Agreement. It is clear from Clause 1.2 of the Agreement which is to the following effect: 1.2. Notwithstanding anything contained in the Principal Agreement, Transferor will relinquish and waive all its rights, interests, liabilities and obligations under the Principal Agreement and Transferee will be entitled to all such rights, interests and will discharge all such liabilities, obligations of Transferor under the Principal Agreement (whether arising before or after the Effective Date). 18. When the Corporate Debtor is entitled to all rights, interests and has to discharge all liabilities obligations of Transferor under the Principal Agreement, any entitlement or liability of it, which flow from the Master Service Agreement has to be shouldered/claimed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve in Vodafone store is also not a valid unique id. For example, December'22 data is annexed as Annexure 1 with this letter to explain about how total sale of handset vs validated sales by the Amazon team is having huge difference and as per Amazon team, the fraud is committed to the extent of 99% of the figures put by the sales team which means the sale data is wrong or manipulated leading to wrongful loss for Amazon, Multiplier and wrongful gain to some persons who have manipulated the data, committed fraud and have pocketed the wrongful gains. 19. Appellant has also conducted its investigation and suspected fraud was flagged in its Report. It was in the above background that when the Appellant has written emails and reminders of payment, Corporate Debtor, vide email dated 02.06.2023 has asked for several documents and details for its review. The email dated 02.06.2023, which was sent has been captured by in Paragraph 11 of the Impugned Order, which paragraph is as follows: 11. According to Mr. Krishnendu Dutta, Ld. Sr. Counsel once the Petitioner itself could raise a doubt regarding the genuineness of certain claim/invoices raised by its employees on Amazon Seller Services P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith Amazon 12 SOPs prepared to operate under this program, if any. 13 Copy of complaints filed against employees working under the program 14 Findings in relation to investigation carried out by Multiplier 15 Meeting with EY team who is conducting this investigation from March 23 16 All the invoices raised, in addition to listed above, by Multiplier on Amazon from 2017 till date Please let me know shall you need any clarification regarding this. Best regards, Devender 20. In the Reply of the Demand Notice, the Corporate Debtor has referred to two emails dated 12.06.2023 and 16.06.2023, which has been brought on record by the Appellant in the Memo of Appeal, which need to be noticed. Email dated 12.06.2023 was sent by one Praveen Choudhary of the Appellant to one Devender of Amazon, which emails reads as follows: From: Praveen Choudhary [email protected] Sent: Monday, June 12, 2023 2:11 PM To: RUHIL, DEVENDER [email protected]; Ajmani, Gaurav [email protected] Cc: Sameer Mehta [email protected]; Rupinder Singh [email protected]; Reema Arora [email protected] Subject: RE: [EXTERNAL] Privileged and confidential_Data needed Dear Dev ..... X X X X Extracts X X X X X X X X Extracts X X X X
|