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TMI Blog2025 (3) TMI 391X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the receipt of such Notice or invoice in relation to the dispute. In the present case, the Corporate Debtor has complied with this requirement. Further, the Adjudicating Authority, in line with the provisions of Section 9(5)(i)(d) of the Code and relying on established legal precedents, has concluded that the Corporate Debtor cannot be admitted into insolvency. Upon reviewing the facts of the present case, it is evident that disputes and conflicts existed regarding the alleged outstanding amount claimed by the Applicant even before the issuance of the statutory Demand Notice and the filing of the present Application. These disputes specifically pertain to the invoices raised by the Applicant/Operational Creditor. A pre-existing dispute is apparent, as the invoices do not align with the agreed schedule of fees. Additionally, the discrepancies in these invoices remain unaddressed despite prior communications highlighting the inconsistencies. The issue relating to limitation has not been gone into as all the details of the bills has not been placed on record. Moreover, since pre-existing dispute has been clearly established in the facts of the case, it is not required to go in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es Ltd., the Appellant applied special fees due to the high-stakes and the substantial volume of documents requiring review. This arrangement had been communicated to and agreed upon by the Respondent. Additionally, an email dated 24.07.2017, regarding the claim for special fees in the Adani Group arbitration, was placed on record as evidence of this understanding. However, this evidence was overlooked. 5. The Appellant raised bills for all litigation and arbitration matters between STC and these corporate groups. For cases related to the Mittal Group, he charged Rs 55,000/- per appearance, and the bills were submitted accordingly. Not a single bill was ever returned with an objection regarding the validity of the applicable fee schedule. There was never any dispute that the Appellant provided legal services to the Respondent; however, his payments remained unpaid. 6. The Operational Creditor addressed a letter to the Director of Law, Director of Marketing, Director of Finance, and General Manager (Law), highlighting the issues of non-payment, short payment, and arbitrary deductions of professional bills from 2009 onwards. Another letter dated 21.05.2011 was sent to the Chairman- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appropriately to ensure that all Bills that your Client claims as due are properly submitted as per STC instructions dt.17.05.2017, the Bills carry the necessary particulars alongwith the Order sheets with amount of Professional fee strictly as per STC's schedule of fee to avoid any cutting / overwriting, as cutting / overwriting on bills lead to Audit/ Finance objections, thereby delaying the process of clearance of Bills" 11. In the email dated 07.06.2017, the Respondent explicitly acknowledged receipt of four bills-Bill Nos. 318, 317, 304, and 303-dated 20.05.2017 and 24.05.2017. Furthermore, in a trailing email dated 08.06.2017, the Respondent confirmed that the services corresponding to these bills were indeed provided by the Appellant but cited technical reasons for delaying their processing. In an email dated 24.07.2017, the Respondent addressed the issue of 'special fees' related to the Adani Group, recognising the substantial claims and extensive work involved. The email explicitly stated that the Respondent had agreed to consider the Appellant's fee claims for the submitted bills. Additionally, emails from June 2016 indicate that the Arbitral Tribunal had officiall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bills with updated dates after keeping the original bills pending, purportedly to facilitate payment. For instance, in an email dated 11.05.2016, the Respondent specifically asked for resubmission of bills with current dates. This clearly indicates that the Respondent never disputed the validity of the Appellant's bills but, instead, sought fresh replacement bills as a means to circumvent delays in processing payments while maintaining its records. 15. The Appellant sent an email dated 05.07.2019, claiming fees under five bills for defending 84 criminal revision cases. Additionally, a reminder was sent on 11.05.2016 regarding payment for arbitration matters before a panel of three Hon'ble retired Supreme Court Judges. The Appellant consistently raised invoices over time, and the Respondent never disputed these invoices. 16. Between 2009 and 2018, the Appellant submitted over 200 bills/invoices for professional services, totalling Rs 4,84,70,481/-. Out of this amount, the Respondent made payments amounting to Rs 91,15,371/- (including TDS of Rs 11,80,109/-), with Rs 79,35,262/- transferred via RTGS. The remaining balance of Rs 3,93,55,110/- remains unpaid. In an email dated 07.02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 85,719/- [that is, Rs 1,18,01,090 - (79,35,262 + 11,80,109)]. 20. For the financial year 2016-17, as per Form 26AS, which stands admitted, the Respondent recorded that the Appellant provided services worth Rs 39,47,300/- and deposited TDS of Rs 3,94,730/-. However, instead of paying the full Rs 39,47,300/-, the Respondent paid only Rs 27,18,441/-, including TDS (that is, Rs 23,23,711 + Rs 3,94,730). Without prejudice, the remaining admitted amount of Rs 12,28,859/- is yet to be paid to the Appellant. 21. The Appellant has relied on various orders of the Adjudicating Authority dated 23.11.2021, 15.02.2022, and 22.04.2022, wherein the attempts at resolution were acknowledged in the Order Sheets. 22. The Appellant, a senior advocate, consistently appeared alongside a briefing advocate. While the bills of the briefing advocate and the advocate- on-record (AOR) were duly cleared, the Appellant's bills remained unprocessed. The Order noting discrepancies in the bills effectively defames a senior advocate who has upheld the highest standards of integrity while representing the government, its clients, and various government companies. It unjustly questions the authenticity of the invoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Appeal is liable to be dismissed by this Hon'ble Tribunal because, after filing the Petition before the NCLT in September 2019, the Appellant subsequently approached the Hon'ble High Court of Delhi by filing Writ Petition (C) No. 6146/2022. In the Writ Petition, inter alia the prayer made was:- "(a) Issue a writ of Mandamus commanding the Respondents to process the invoices of the Petitioner which have been submitted to Respondent No. 1 and determine the amount and to pay the amount payable and convey the same to the Petitioner within three weeks;" 28. The Petition before the NCLT sought the initiation of the CIRP concerning the alleged debt claimed by the Appellant against the Respondent. Meanwhile, before the Hon'ble High Court, the Appellant initially sought a determination of the amount payable and subsequently requested payment from the Respondent. In other words, the alleged debt had not yet been quantified or determined by the Appellant. Furthermore, by filing the Writ Petition, the Appellant implicitly treated the Respondent as a solvent entity. In the above issue Writ Petition (C) No. 6146/2022 the Appellant himself pleaded as under:- "...The Petitioner states t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding the debt. These facts clearly demonstrate that the Respondent had successfully raised a valid pre-existing dispute within the meaning of Section 8(2) of the IBC. 32. The alleged demand raised in the second Demand Notice dated 26.07.2019 was also contested by the Respondent in its Reply dated 08.08.2019. Furthermore, in the Written Submissions filed by the Appellant before the NCLT, it was acknowledged that a sum of Rs 30,47,500/- could be deducted from the claimed amount. This further underscore significant uncertainties regarding the quantification of the alleged debt. The NCLT has rightly relied on the judgment of the Hon'ble Supreme Court of India in 'Mobilox Innovations Private Limited vs Kirusa Software Pvt Ltd' [2017 INSC 975], which establishes that the initiation of the CIRP is not permissible when there are unresolved disputes concerning the alleged debt. 33. The Appellant cannot rely on the Order dated 30.05.2023 passed by the Hon'ble High Court in the Writ Petition, as the Order itself records that the Respondent disputes the Appellant's calculations. The sum of Rs 5,00,000/- was merely an outcome of discussions held with the Appellant to explore an amicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Submissions before the NCLT. 39. Following the Respondent's objections in its Reply dated 18.01.2019, the Appellant withdrew the initial Demand Notice dated 08.01.2019 and subsequently issued a revised Demand Notice on 26.07.2019, reducing the alleged debt amount to Rs 6,26,90,985.02/-. This reduction in the claimed amount itself suggests the existence of a serious dispute regarding the debt. 40. In 2022, the Appellant filed Writ Petition (C) No. 6146/2022 before the Hon'ble High Court of Delhi, seeking the processing of his bills. In its Order dated 30.05.2023, the Hon'ble High Court noted that the Respondent disputed the Appellant's calculations. The amount of Rs 5,00,000/- was merely a figure arrived at during discussions to explore an amicable resolution, and it did not constitute an admission of liability by the Respondent. 41. The Appellant has alleged non-payment of legal fees dating back to 2007, despite representing the Corporate Debtor in various legal proceedings until 2018. However, no grievance regarding unpaid invoices was raised for over a decade. As per the Respondent's submissions, the issue of outstanding payments was brought up only after the Corporate De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." Sabarmati Gas Limited vs. Shah Alloys Limited (Civil Appeal No. 1669 of 2020) "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 claim made by the appellant, we do not find any reason to disagree with the concurrent findings of the Tribunals that there existed a 'pre-existing dispute' between the parties before the receipt of demand notice under Section 8, IBC. In other words, the dismissal of the application under Section 9, IBC on the ground of 'pre-existing dispute' cannot be held to be patently illegal or perverse. We also do not find any reason, in the facts and circumstances, to hold that the case set up by the respondent was a patently feeble legal argument. At any rate we are not inclined to brush aside the case o ..... 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