TMI Blog2018 (3) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner through the 3rd respondent. The unholy nexus between Mr. Samrat Gupta and the 3rd petitioner is probable to believe in the above said circumstance. In the above said peculiar circumstances we find failure on the side of the respondent in not sending reply is not fatal. This point is answered accordingly. Whether Corporate debtor succeeded in establishing existence of any dispute? - Held that:- There exist a genuine dispute prior to the filing of the application and before the date of issuance of the demand notice. It appears to us that the contentions taken by the respondent are not feeble, mala fide or hypothetical. Existence of MOU in between the parties and pendency of Arbitral proceedings seen not mentioned in the application. Existence of MOU is an important document produced on the side of the respondent. It deals with sharing of profits and loss between Corporate Debtor and Operational Creditor. How it would be shared or not is not a question to be answered in the case in hand. The terms in between the parties as per MOU may have some relevancy in regards the settlement of the claim in hand. Non-mentioning the above said fact is therefore amount to suppression o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional Creditor. The copies of all purchase orders/invoices have been annexed by the Operational Creditor and marked as Annexure B to the application. 5. The operational creditor has stated that the supplies were duly received by the Corporate Debtor and the debt for each of the invoices fell due from the receipt of such supplies. Statement showing the details of the supplies made along with the particulars of the invoices raised has been set out in the table attached to the Notice and marked as Annexure C to the application. An amount of ₹ 1,71,81,809/- has been due and payable to the Operational Creditor being the price of goods sold and delivered. 6. The operational creditor has further stated that the sale was made under the contract for goods sold and delivered and services rendered thereto and is governed by the Sale of Goods Act, 1930 and also under the Indian Contract Act, 1872. The petitioner had raised invoices from time to time and the Corporate Debtor has not made any payment to the Operational Creditor for the goods sold and services rendered causing great hardship to the Operational Creditor. 7. The petitioner further stated that a Demand Notice date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails as mentioned in Annexure A and the copy of the letter dated 1st April, 2017 received from the Corporate Debtor confirming the outstanding amount due and payable to the Operational Creditor annexed and marked as Annexure-G to the application. The petitioners have also filed the copy of the electronic mail along with enclosures dated 30th August, 2017 from the Corporate Debtor admitting the dues annexed and marked as Annexure-H to the application. 12. The Corporate Debtor has filed objection wherein it is contended that the application filed by the Operational Creditor is barred by the Indian Partnership Act, 1932, as the Operational Creditor No.1 is not a registered partnership firm and the instant application is barred by the provisions of section 69 of the Partnership Act, 1932. The Operational Creditor Nos. 2 to 4, either personally or through the Operational Creditor No. 1, cannot maintain an action against the Corporate Debtor only on the basis of purported invoices raised by the Operational Creditor No.1. 13. The Corporate Debtor has stated that demand notice under section 8 of the I B Code, 2016 issued to the Corporate Debtor is not a notice, in view of the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said MOU were to be equally shared by the parties. Copy of the said MOU has been annexed and marked with the Annexure C to the Reply. 17. It was further stated that as per the MOU, none of the parties would take up any project or take any step which would be prejudicial to the interest of the parties. As per the MOU, the Corporate Debtor took up several projects for various companies. But the Operational Creditor No. 3, i.e. Mr. Pratyush Bajoria was taking all the decisions with regard to taking up and execution of projects on behalf of the Corporate Debtor and was practically in control of the Corporate Debtor, which will be evident from the series of electronic mails and letters sent by him to third parties. Copies of such mails and letters have been annexed and collectively marked as Annexure D to the reply of the Corporate Debtor. 18. The Corporate Debtor submitted that as per the MOU dated 1st January, 2014, on behalf of the Corporate Debtor, the Operational Creditor No. 3 started taking unauthorised business decisions and the purported sum has been due by the Corporate Debtor only after the said Operational Creditor started taking decisions on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mrat Gupta for their consultancy. The Corporate Debtor reimbursed the out of pocket expenses of the Operational Creditor No.3. Copies of the same have been annexed and marked as Annexure G to the Reply. 23. The Corporate Debtor stated that the Operational Creditor No.3 breached the contractual clauses and failed to contribute to the Corporate Debtor as per the MOU. As per the MOU, the parties were to share the loss from the said business module, and therefore, the Corporate Debtor has a claim of about ₹ 1,58,70,808/- against the Operational Creditor Nos. 1 and 3 due to the following reasons: (a) The quality of the products used by the Operational Creditor No.3 was compromising and below the general standard of the Corporate Debtor, thereby damaging the reputation and goodwill of the Corporate Debtor. (b) The Operational Creditor No.3 pressurised the Corporate Debtor for placing the order for switchgear product on the Operational Creditor No.1 at much lesser discount. (c) The Operational Creditor No.3 used to book fictitious orders on SIEMENS Limited. (d) Majority of the projects were undertaken at unworkable prices causing failure and huge loss to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rat Gupta have committed the highest amount of fraud and misrepresentation before the Ld. Tribunal. Mr. Samrat Gupta is not working with the Corporate Debtor since October, 2017 as he resigned on 23.10.2017. Mr. Samrat Gupta purposefully did not make the other directors aware of the same to cause irreparable loss to the Corporate Debtor. 28. The Corporate Debtor has again submitted that there exists a large number of disputes between the parties regarding the purported claim of the Operational Creditors and hence the application is not maintainable under section 9 of the I.B.C. and should not be entertained at all. 29. The Operational Creditor filed rejoinder contending that the objections raised by the respondents are not sustainable and reiterated the very same contentions in the application. 30. Heard the Ld. Counsels of both side and perused the records. Upon hearing the arguments and considering the contentions taken by the parties the points that arise for consideration are the following: 1. Whether failure to send reply to the demand notice received by one of the directors of the Corporate Debtor is fatal? 2. Whether Corporate debtor succeeded in establishi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised demands and later filed the present case only for grabbing money illegally from the respondent. According to him because of the breach of contractual terms of the MOU the respondent is entitled to have huge claims against the operational creditor. Execution of MOU between the parties is evident from the production of its copy by the respondent. Existence of MOU is not at all found a place in the pleading in the application. Moreover in connection with business operation of the respondent as per the terms of MOU, 3rd petitioner used to attend the meetings convened between third parties and the respondent along with Mr. Samrat Gupta representing the respondent. Said Samrat Gupta allegedly resigned from the respondent company on 23.10.2017 and is not working in the company and a criminal prosecution for cheating and forgery allegedly lodged against him is pending argued by the Ld. Counsel for the respondent. A reading of some of the terms in the MOU is good to understand the nature and terms of the understanding between the parties. It read as follows:- 1. That this Agreement/Indenture shall be effective on and from 1st day of January 2014. 2. Hindustan Controls Eq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to file the case in hand by the 3rd and 2nd petitioner who are the remaining partners of operational creditor has signed the MOU representing the respective parties. In the rejoinder petitioner contends that 3rd petitioner is working as a consultant for which he was paid remuneration and that he has no control over the respondent company. Whether 3rd respondent has control over the respondent company or that he is acting as a consultant for remuneration is not a question germane for consideration in this case. A perusal of MOU, the minutes of meetings convened at the instances of respondent for its operation of business signed by the 3rd petitioner and Mr. Samrat Gupta (page Nos. 92 to 98), copies of mail send by the 3rd respondent (Annexure D) to third parties in connection with respondent business transaction, copies of Challan and vouchers signed and approved by the 3rd respondent (Annexure F G) for and on behalf of the respondent give rise a legitimate inference that 3rd petitioner is playing a dominating role in the management of the affairs of the respondent company and taking decisions in regards business operation and making communication through E-mail ID in the name of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also raised by the respondent. Those contentions are found devoid of any merits upon production of supporting documents on the side of the petitioner. 36. However, the allegation regarding existence of dispute prior to the issuance of demand notice is found sustainable as per the available evidence in the case in hand. As held in Mobilox Innovations (P.) Ltd. V. Kirusa Software (P.) Ltd. [Ca No, 9405 of 2017] by the Hon ble Supreme Court we are not going to examine the merits of the dispute but let us see respondent succeeded in establishing a plausible contention which require further investigation. It is good to read Para 40 of the above referred Judgment. It read as follows:- Para 40. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amrat Gupta. Thus no doubt the above said contention that Mr. Samrat Gupta has no individual authority to admit the claim and that he played fraud upon the respondent company in defeating its valuable right of defence to be taken in a case of this nature is a serious allegation which require further investigation. Moreover upon the evidence available in this case we cannot come to a legitimate conclusion that the allegations raised by the respondent are untrue. It requires larger evidence which cannot be led in a case of this nature. The above said circumstances brought out by the respondent give rise a resalable above said circumstances brought out by the respondent give rise a resalable doubt in our conscious regarding the claim put forward by the petitioner. The suspicious nature of the role played by Mr. Samrat Gupta, that he resigned from the respondent company and joined the corporate debtor, that all the decisions regarding business operation of the respondent being evidently carried on by 3rd respondent that as per MOU the operational creditor agrees to share profit and loss generated from the business carried on equally as per the terms of the MOU, that the respondent disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting arbitration agreement by and between the parties herein and as such the pendency of any arbitral reference since 31st August 2017 does not arise. However petitioner in its rejoinder admits that it is a member of Calcutta Electric Traders Association and that petitioner had expressed its grievance to the said Association and Association upon coming to know of such huge sum being payable by the respondent had issued the letters. Prima facie the said contention not at all inspire our confidence. The letters above referred were served on the respondent by the Chairman of the Arbitration Committee. Nothing shows that such a committee is not in existence. That being so the records available on the side of the respondents give rise an indication that those letters were send by the Chairman of the Arbitration Committee to which a reference would have made by the petitioner. Otherwise issuance of such a letter as the Chairman of the arbitration committee does not arise. Thus the contention that there exist an Arbitration proceedings regarding the subject matter in issue in this case is found provable to believe. 41. The next contention is that a part of the claim is barred by limita ..... X X X X Extracts X X X X X X X X Extracts X X X X
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