TMI Blog2019 (9) TMI 892X X X X Extracts X X X X X X X X Extracts X X X X ..... g dispute between the parties. If ₹ 7.5 lakhs was paid to the Corporate Debtor, then Corporate Debtor would have completed the task orders under MSA. Long back dispute was raised before filing the petition. Though email correspondence was filed by the Operational Creditor, yet there was dispute between the parties over payment of balance. Therefore, Petition is liable to be rejected on these grounds. The Petition is liable to be rejected as there was pre-existing dispute between the parties - petition dismissed. - CP (IB) NO. 433/9/HDB/2018 - - - Dated:- 19-6-2019 - SHRI RATAKONDA MURALI, MEMBER (JUDICIAL) For The Petitioner : Mr Pulket Gooma, Advocate For The Respondent : Mr P. Vikram, Advocate ORDER 1. The present Petition is filed by Venketesh Biosciences LLP against M/s Genomelabs Bio Private Limited. The Corporate Debtor had defaulted in paying ₹ 28,52,000/- (Twenty eight lakhs, fifty two thousand rupees only). The debt arose due to the non-completion of the task orders. Hence this petition is filed under Section 9 of Insolvency and Bankruptcy Code, 2016, R/w Rule 6 of Insolvency Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in order to resolve the issues and take custody of the final technology transfer and Dossiers. In the said meetings, the corporate debtor laid the condition that the technology transfer and handingover of the dossiers shall take place once the amount of ₹ 7,50,000/- is paid by the Operational Creditor. It is further stated that claiming said amount is unjustified and unexplained, yet the Operational Creditor agreed to pay the said amount only after the technology transfer and dossiers be handedover. Thus, it is stated that the Corporate Debtor has misused his position and has coerced the Operational Creditor to pay an amount for the tasks for which the Operational Creditor had already made an advance payment. h. It is stated that the Corporate Debtor has till date, maintained his demand for the amount of ₹ 7,50,000/- which is in conflict with the clauses 3(f), 4(a), 4(b), 4(c), 9 (c) and 12 of the MSA (Master Services Agreement). i. That the Operational Creditor through an email dated 3rd June, 2018 asked the Corporate Debtor that he wishes to settle any outstanding accounts and gather the receivables with immediate effect. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notice of the Petitioner that the amounts which were due to the Respondent were conveniently omitted and that the notice was bad in law and in contravention to the provisions of the Act as alleged liability does not fall under the definition of Operational Debt and that the Petitioner is not an Operational Creditor as defined under the provisions of the Act. In order to escape the outstanding liabilities to be paid to the Respondent, the Petitioner has issued notice under IBC Code 2016 and the Respondent reserves its right to file separately a claim against the petitioner. In spite of the existing dispute regarding alleged liabilities predating the demand notice made under the Act, and even after receiving a detailed reply and being put to notice regarding the outstanding claims of the Respondent, the Petitioner instead of discharging its liabilities towards the Respondent has filed this petition only to harass the Respondent and cause wrongful loss to the Respondent. II. It is stated as per the Minutes of Meeting dated 04.05.2018 (Page No.70 of CP), the Petitioner agreed to pay outstanding liabilities to the Respondent and the same was informed to the Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rne by the company for the goods and services provided to the Petitioner under the said MSA and Task Orders. Further the Petitioner in its email dated 07.05.2018 addressed to the company agreed to pay the said amount to the Respondent. The Petitioner had acknowledged the said additional expenditure incurred by the Respondent and undertook to pay ₹ 7.5 lakhs to the Respondent and it was understood between the parties to the meeting that the Respondent would provide further goods and services only upon payment of ₹ 7.5 lakhs by 15.05.2018. The understanding between the Petitioner and the Respondent is reflected in the minutes of meeting dated 04.05.2018, and the email dated 05.05.2018 issued by the Petitioner, acknowledging the said minutes. Copy of the said communications regarding the Minuets of Meeting dated 04.05.2018 are annexed as ANNEXURE-2. V. It is stated that the Petitioner has also agreed and is liable to pay an amount of ₹ 1.4 crores to the Respondent for the amount incurred by the company for raw materials, analytical and testing, manpower costs (including remuneration and expenses for top scientists who were engaged and consulted for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the MSA has come to an end. It is stated that the aforementioned clause clearly implies that after the MSA has come to an end, if the Respondent has not performed any task stated in the MSA or the Task Orders, the advance amount paid for the said task shall be considered as unearned income and shall be returned to the Petitioner within 30 days. It is further stated that the Clause 12(d) of the MSA specifically states that the Respondent shall refund any commission paid for the project deliverables that it fails to deliver. C. It is stated that the Petitioner entered into the MSA for the R D of the products enlisted in the Task Orders, and the amount of INR 23,00,000/- (Rupees Twenty-Three Lakhs) was paid to the Respondent by the Petitioner on 01st July, 2016. The said Task Orders were to be concluded with the Respondent handingover the final Dossiers for the respective products to the Petitioner latest by 15th February, 2017. That because the said amount was paid before the deliverables were handedover to the Petitioner, the said amount is implied to be an advanced payment. It is an admitted fact that the Respondent did not complete the Task Orders and did not hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00,000/- (Rupees Fifteen Lakhs) as incidental charges, without any justification or invoices, which was again requested by the Petitioner vide email dated 11th June, 2018, and till date, remains unanswered. It is averred, that the same amount transformed into INR 1,40,00,000/- (Rupees One Crore Forty Lakhs) in the Reply to the Notice, dated 30th June, 2018. It is stated that even the reply filed before this tribunal, the Respondent has failed to file even a single invoice of the so-called expenses borne by him. It is averred that the amounts of INR 80,00,000/- (Rupees Eighty Lakhs) and INR 1,40,00,000/- (Rupees One Crore Forty Lakhs) were mentioned by the Respondent on 8th June, 2018 and 30th June, 2018 respectively for the first time, and there were absolutely no communications regarding the said amounts before these dates. F. It is stated that the amount of INR 7,50,000/- (Rupees Seven Lakhs Fifty Thousand) is just an attempt by the Respondent to create a dispute in the instant matter. The Petitioner specifically denies that the amount of INR 7,50,000/- (Rupees Seven Lakhs Fifty Thousand) had to be paid to the Respondent as a liability. It is further stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Respondent and the Respondent's failure to fulfil his obligations points to one simple fact- that the demands were a part of a pre-emptive strategy in order to create a dispute. K. It is stated that the parties were negotiating upon entering into a manufacturing agreement, but the Petitioner decided to withdraw and called off the negotiations and informed the Respondent through various phone calls and emails, the same are annexed as Annexures A-3, A-4, A-5, A-6 and A-7. L. The Respondent, in the counter stated that the present Petition is barred by limitation. Thus it is stated that the Petitioner's right to initiate proceedings under Section 9 of the Insolvency and Bankruptcy Code, 2016 first accrued on 15th February, 2017 and again on 15th May, 2018, when the amount of INR 23,00,000/- (Rupees Twenty Three Lakhs) paid to the Respondent became due by virtue of Clauses of the MSA. Hence, the present Petition, is within limitation because the cause of action is continuing till present date. 5. I have heard the Counsel for Operational Creditor and also the Counsel for Corporate Debtor. The Learned Counsel for Operational ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given for rendering services which Corporate Debtor failed to render and it is an operational debt which it has committed default. Therefore, the Petition is liable to be admitted. 8. The learned Counsel for Petitioner would contend that Operational Creditor and Corporate Debtor entered into a Master Service Agreement (herein after referred to as MSA) on 15.05.2016. The Counsel contended the Corporate Debtor was supposed to prepare four dossiers as the final products which were to be handedover to the Operational Creditor by 15.02.2017. The Counsel contended the MSA as well as task orders four in number are filed with the Petition at Page Nos 52-55 of the paper booklet. The Learned Counsel contended, Operational Creditor paid ₹ 23 lakhs to the Corporate Debtor on 01.07.2016 for the performance of the task orders. The invoice raised is also filed. 9. The learned Counsel would contend the Corporate Debtor undertook to prepare the task orders by 25.03.2017 and email was also addressed to the Operational Creditor. The Counsel contended, Corporate Debtor failed to handover the task orders by 25.03.2017. The contention of the learned Counsel the Corpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red into MSA and four task orders were given and an amount of ₹ 23 lakhs was paid. So, there is no any dispute that Corporate Debtor received ₹ 23 lakhs from the Operational Creditor in terms of MSA for completing the four task orders. Counsel contended that Corporate Debtor extended all services and provided products to the Operational Creditor and there was meeting in 4th May, 2018 and it was agreed an amount of ₹ 7.5 lakhs to be paid to the Corporate Debtor which is outstanding in relation to the services rendered under MSA. The counsel relied on the meeting held on 04.05.2018 wherein Operational Creditor agreed to pay ₹ 7.5 lakhs to the Corporate Debtor. The Corporate Debtor also confirmed the same through email dated 05.05.2018 wherein Operational Creditor undertook to pay the amount by 15.05.2018. Thus, the contention of the learned Counsel, the Operational creditor to pay ₹ 7.5 lakhs to the Corporate Debtor in connection with the agreement. The Counsel contended, Operational Creditor also sent mail dated 07.05.2019 confirming the liability to pay ₹ 7.5 lakhs in full and final settlement of the claim and directed the Corporate Debtor to rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate Debtor and payment to be made by 15.05.2018. 16. It is also pertinent to see the email sent to Corporate Debtor by Operational Creditor dated 07.05.2018 which is at page No. 71 of the petition filed on behalf of Operational Creditor. It is clearly stated that the Operational Creditor will make arrangements for payment before 15.05.2018. It is also pertinent to see email dated 16.05.2018 sent by Operational Creditor which is at page No. 73 wherein also the Operational Creditor agreed to pay the balance amount only after meeting the points referred to therein. It is also stated in the email dated 22.05.2018 sent by Operational Creditor that the remaining full and final payment of ₹ 7.5 lakhs will be immediately sent. So, Operational Creditor categorically agreed to pay a sum of ₹ 7.5 lakhs that too immediately. However, this amount was not released to the Corporate Debtor and Corporate Debtor replied to the Operational Creditor stating that amount to be released simultaneously which is at page No. 78 of the Petition. So Corporate Debtor was pressuring Operational Creditor to release ₹ 7.5 lakhs. Thereafter demand notice dated 19.06.2018 was issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce and that no dispute raised in reply to Section 8 notice. Whereas in the present case there was a dispute prior to the demand notice and therefore the facts of the said decision are not applicable to the facts of this case. (ii) Dolphin Offshore Enterprises (Mauritius) (P.) Ltd.'s case (supra) where in the facts of the case that the debt was admitted by the Corporate Debtor and the Operational Creditor's claim was not disputed. Further, the Corporate Debtor did not deny the admission of the liability even in the reply notice or pleadings. Whereas in the present case, the debt was never admitted by the Corporate Debtor and specifically denied all claims of the Operational Creditor in the reply notice and the counter to the petition. (iii) Shaw Traders case (supra) wherein the facts of the case cited show that the disputes raised by the Corporate Debtor were not in relation to the impugned invoices in whose respect there is a debt due. Therefore there was no dispute raised in relation to the impugned invoices. In the present case there is an undeniable pre-existing dispute with respect to the impugned invoice mentioned in Part V of Form 5 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Apex Court in this case, does not apply to the facts of the present CP. It is only relevant in matters adjudicated by a Trial Court where there is absence of specific evidence. In present CP, there is a clear and unequivocal admission to pay additional amounts by the OC, and the dispute between the parties arose from failure of the OC to pay admitted amounts. The CD has filed all relevant documents and correspondence to show pre-existing dispute (x) Pradeep Kumar Goil's case (supra). The ratio laid down by the Hon'ble NCLT Allahabad Bench in this case, does not apply to the facts of the present CP. In present CP, there is a clear and unequivocal admission to pay additional amounts by the OC, and the dispute between the parties arose from failure of the OC to pay admitted amounts. The CD filed all relevant documents and correspondence to show pre-existing dispute. (xi) Atyam Veerraju's case (supra). The ratio laid down by the Hon'ble Apex Court in this case, does not apply to the facts of the present CP. In present CP, there is a clear and unequivocal admission to pay additional amounts by the OC, and the dispute betw ..... X X X X Extracts X X X X X X X X Extracts X X X X
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