TMI Blog2019 (1) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... f Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by inter alia seeking to initiate Corporate Insolvency Resolution Process (CIRP) in respect of M/s. K12 Techno Services Private Limited (Respondent/Corporate Debtor). 2. Brief facts of case, as mentioned in the Petition, which are relevant to the issue in question, are as follows: 1) M/s. Next Education India Private Limited (Petitioner/Operational Creditor) (Formerly known as Helix Technology Solutions Private Limited), is a Company registered under the Companies Act, 1956, having its registered office at Plot No.89, Municipal No. 8-2-120/76, 1st Floor, Road No.2, Banjara Hills, Hyderabad-500034. It is engaged, inter alia, in the business of providing digital classroom solutions. 2) M/s. K12 Techno Services Private Limited (Respondent/Corporate Debtor) is a Company registered with Registrar of Companies on 26.03.2010 and is incorporated under Companies Act, 1956, having its registered office at H. No. 10-2-249/250, G. R's Laxmi Nivas, Street No.6, West Marredpally, Secunderabad-500026 that manages and provides services to Gowtham Model Schools located across the State of Andhra Pradesh an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vency Resolution process under the Code. 3. The Respondent has filed statement of objections dated 14th March, 2018 by inter alia contending as follows: 1) The petition is not maintainable before this Bench as the dispute arose at Hyderabad and the parties are also located at Hyderabad. The Corporate Debtor is never a loss making Company, and it cannot be arrayed to be made liable to pay such impugned sums of money at the whims and fancies of the Applicant, inasmuch as, it is at the irresponsible action of the Applicant that the dispute has surfaced, and is now instituted for illegal enrichment and the claim itself is not at all a bona fide claim. 2) In a series of meetings held between the Petitioner/Applicant and Corporate Debtor, and it has raised a series of issues pertaining to laxity and lapses on the part of the Applicant, which were brought to his notice, and as such there is a bona fide dispute of its obligations to discharge the alleged debts and liabilities. The respondent has also kept the Applicant present in various meetings with the Sri Gowtham Academy of General and Technical education (hereinafter referred to as SGAGTE) as the Master Services Agreement, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Monesh Kumar, learned Counsel for Respondent. We have carefully perusal pleadings of the both the parties along material documents filed in support of their case and the extant provisions of the Code. 5. Shri H.N. Narendra Dev, the learned Counsel for Petitioner, while pointing out various averments made in the application basing on the documents failed in their support, has further submitted that the objections filed by the Respondent are false and denied, and they are made with sole intention of sub-serving its illegalities and mala fides. This Tribunal have territorial jurisdiction as per Section 60 of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor failed to pay outstanding due amount and the Petitioner had always responded to the technical issues regarding the hardware supplied by Operational Creditor, and also fulfilled all the obligations and responsibilities under the agreement between Operational Creditor and Corporate Debtor. As per section 9.1, 9.2 and 9.3.1 of the Master Licence Agreement, which has been executed between Petitioner and Respondent, it is the Corporate Debtor, who is required to make payment to the Operational Creditor for the services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity to pay its customer if it is due legally. He has relied upon the following judgments in support of his case. I. B.K. Educational Services (P.) Ltd. v. Parag Gupta Associates and Associates (CA No. 23988 of 2017) II. P.K. Ramachandran v. State of Kerala [1997] 7 SCC 556 Therefore, the Respondent urged the Tribunal to dismiss the case. 9. Before examining legal proposition on the issue, it is necessary to refer relevant clauses of Master Licence Agreement dated 03.01.2011. Clause 9 of the Master Licence Agreement deals with charges, default and termination. Clause 9.1, 9.2, 9.3, and 9.3.1 reads as follows: 9.1 The institution (the respondent herein) shall be deemed to have bought the Computer Systems at the point of time referred to in paragraph 6.1.3 of this Agreement, but the Computer Systems shall remain charged to the Company (the petitioner herein) or to the third party lender in terms of clause 7.1.4 until the full payment of the instalments are made and all charges payable under this agreement and until all the obligations of the Institution have been satisfied and the Company has given a written confirmation of satisfaction, which shall not be unreasona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 178500 183000 187500 Q17 Q18 Q19 Q20 192000 196500 201000 205500 c) The Company shall be fully entitled to remove all Content from the Computer System(s) at its own cost from the premises of the institution within reasonable time and for which the institution shall extend all necessary help and cooperation to the Company. d) The Company shall have no further obligation/liability towards the Institution or anybody connected to it including its students in respect of the Computer System(s) for which the Agreement has been terminated by the institution and which has/have accordingly been removed by the Company. And e) The institution including anybody connected to it, shall not be entitled to make any claim of whatsoever nature including claim of indemnity, against the Company for such snag/malfunctioning and/or termination of the Agreement in relation to such Computer System(s). Clause 9.3 9.3.1 of the agreement deals with making of payment. As per this clause if the Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 was not properly executed between the parties. And only stamp of Respondent was put on the agreement with small initial. Moreover, whether this document is forged one or not cannot be examined under the provisions of Code. Moreover, the Master License Agreement, as per the clauses extracted supra, contained several terms and conditions for its implementation including payment. The impugned invoices totalling 187 covers digital classroom solution services made between March 12, 2011 and June 30, 2017 for an amount of ₹ 2,39,85,521.35/-. 12. The Respondent has given a reply dated 08.08.2017 to the Demand Notice by raising several disputes and also filed several correspondences with regard to the defective services provided by the Petitioner. They have also contended that there is a consequential Master Service Agreement with Sri Gowtham Academy of General and Technical education (hereinafter referred to as SGAGTE) on 8th February, 2016. The petitioner has admittedly failed to spend a sum of ₹ 25,00,000/- as per Annexure-D for joint media advertisement. There is a lot correspondence filed by the respondent to show that the petitioner was put on notice about the def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 dated 23rd October, 2017, it has inter alia held that existence of un-disputed debt is sine qua non of initiating CIRP. As per para 34 of judgment, it is stated that Adjudicating Authority, while examining an application under Section 9 of Code, will have to determine: i. Whether there is an 'operational debt' as defined exceeding ₹ 1 Lakh? ii. Whether documentary evidence furnished with the application shows that the aforesaid debt is due and payable and has not yet, been paid? iii. Whether there is existence of dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before receipt of demand notice of the unpaid operational debt in relation to such dispute? If any one of the aforesaid conditions is lacking, the application would have to be rejected. 14. In view of the above facts and circumstances of case, we are of the considered view that debt in question is not only in serious dispute, but it is also barred by laches and limitation, and the petitioner, in fact seeking recovery of alleged debt under the provisions of code. We have gone through the citations given by the learned Counsel for the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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