TMI Blog2017 (10) TMI 1502X X X X Extracts X X X X X X X X Extracts X X X X ..... t no dispute truly exists in between the parties relating to the service rendered by the operational creditor in Orissa for which contract was separate. On the basis of the documents filed by the petitioner,' it is clear that operational creditor has before filing the petition issued demand notice under Sec.8(1) of the I B Code along with the copy of the invoices and it is also evident that after receiving the demand notice corporate debtor failed to issue any notice regarding existence of dispute or to record the pendency of the suit or arbitration proceedings relating to such dispute. The operational creditor has filed an affidavit in compliance with the provision of Sec.9(3)(b). The operational creditor has also filed a certified copy Of bank statement in compliance with the provision of Sec.9(3)(c) - From the documents filed by the petitioner, it is clear that no dispute was existing regarding the outstanding dues of the invoices raised for the service rendered by the operational creditor in the state of Orissa. It is also evident that the defence taken by the corporate debtor regarding the existence of a dispute is spurious and without any basis. In fact, the said dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t/ operational creditor used to raise their invoices against services. Copies of the invoices raised by the operational creditor are annexed with the application and marked as Annexure Il-D. 5. The operational creditor has stated that the corporate debtor had never raised any dispute about the invoices raised by the operation creditor and have accepted the same without any demur and protest. It is further submitted that the corporate debtor had acknowledged the successful completion of the project by the applicant. The operational creditor raised invoices on the corporate debtor against the services rendered by the operation creditor as per order placed by the corporate debtor, and all such invoices were received by the corporate debtor. 6. As per liability to make payment of such invoices, the corporate debtor made payments from time to time towards part liquidation of its outstanding dues covered by such invoices. The operational creditor has requested to make payment of its outstanding dues under cover of their various letters and emails. However, the corporate debtor has avoided in making payment of the legitimate dues of the operational creditor. Copies of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant has suppressed the fact that agreements dated 16/9/2013 and 1/ 10/2013 were entered into between the parties for issuance of Smartcards in 17 Districts of Uttar Pradesh and Bargarh District in Odisha under Rashtriya Swasthya Bima Yojana (RSBY) wherein, inter alia, scope of services to be provided by the applicant/ operational creditor and remuneration payable therefor by the corporate debtor and terms of payment are mentioned in detail. The corporate debtor has denied the amount of ₹ 4,51,284/- claimed as interest and the rate of interest thereof. The corporate debtor submitted that there was no agreement for payment of interest @24% per annum. The corporate debtor has further stated that the applicant concealed payments of made by the respondent. 12. The respondent has further stated that the applicant has claimed an amount of ₹ 9,35,315/- on account of FKO payment @ ₹ 5/- on the allegation that 1,87 ,063 members were enrolled. The claim of the applicant is inflated and exaggerated as the applicant has enrolled only 1,82,881 members. The respondent submits that the said FKO payment is to be reimbursed by the corporate debtor only upon receipt of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed under Adjudicating Authority Rules, 2016 which was received by the respondent on 17/6/2017 but corporate debtor failed to make payment. Therefore, the operational creditor has filed this application under Sec.9 of the I B Code, 2016. 18. Before filing the petition, the applicant has complied with the provision of Sec.8 of the I B Code, 2016 and has issued demand notice on the corporate debtor in Form No. Ill prescribed under the rules. Demand notice is Annexure I, pages 16 to 64 of the application which shows that the demand notice is in prescribed format along with all copies of invoices which has been raised against the corporate debtor. Petitioner has also filed Track Report of India Post of the Demand Notice which is annexed with the petition at page 63. On perusal of the Track Report, it appears that Demand Notice issued against the corporate debtor through Speed Post on 15/6/2017 was delivered on the corporate debtor on 17/6/2017. 19. As per provision of sub-clause (2) of Rule 8 of the I B Code, 2016 corporate debtor after receiving notice under Sec.8(1) of the I B Code, within a period of 10 days of receipt of demand notice or copy of invoic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner has also filed a copy of bank statement which also contains the stamp of the bank along with the signature of bank officials. It is true that the petitioner has not filed any certificate of the bank to show that no payment of the unpaid operational debt has been made by the corporate debtor. But petitioner has filed a supplementary affidavit along with certified copy of the bank statement to show the compliance of Sec.9(3)(c) of I B Code. 23. The corporate debtor has filed reply dated 21/9/2017 wherein it is stated that application filed by the petitioner is liable to be dismissed under Sec.9(5)(ii)(a) of the I B Code. The said application as filed was incomplete and defective. From the letter dated 12/9/2017 of the applicant's advocate it appears that the Hon ble Tribunal had directed the applicant to rectify the defects in the said application. The said application, in addition to other defects, was not accompanied by an affidavit under Sec.9(3)(b) of the I B Code to the effect that there was no notice was given by the corporate debtor relating to a dispute over the unpaid operational debt. The said defects were sought to be rectified by the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m on 7 /4/2017 to the petitioner wherein, it is stated that Dear Ms Aditi Please see the trail mail which is of serious nature. Data, as submitted by M/S Bradroy, are partially accepted by Insurance co. as well as SNA UP, and as a result, we have to face huge losses. We have severally taken up the issues with your team earlier also, and as Bradroy was our vendor we were totally dependent, and the onus for submission of enrolment data pertains to your co only. As a responsible scsp your co cannot avoid the responsibility of handling over the proper accepted PED as we have to suffer because of your Bad services which were totally unexpected at this stage. We have already done billing for 2.34 lac data and paid the registration charges @ ₹ 30/- along with service charges which we understand not recoverable set aside the billing amount. Under the circumstances, you are finally requested to coordinate with the Insurance co as well as SNA and resolve the issues on immediate basis failing which we have no option left to debit the entire financial losses accrued on us to your Co. Please treat this as MOST URGENT. 28. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... UP on the terms and conditions set forth in the said agreement whereas the agreement dated 1/ 10/2013 shows that this deal was between the same parties and it relates to the Smart Card Service Provider for providing services in one district of Orissa on the terms and conditions set forth in the agreement. It is also clear from the deal that these two contracts executed at different times are between the same parties, but relating to services Of Smart Card Service Provider of various States which have no connection with each other. The terms and conditions of each of the two agreements are mentioned in the said agreement. It is also pertinent to indicate that the application under Sec.9 of the I B Code, 2016, the operational creditor has filed copy of invoices and details of invoices are given in the Annexure Il-B at page 101 which shows that outstanding invoices are numbered as 2013-14/ Orissa 1001 to 012 amounting to were raised against the corporate debtor and it also clear that corporate debtor has made part payment of and after deducting part payment balance amount remains outstanding is 32. All these invoices relating to Orissa and relates to Smart Card Service pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the dispute is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defense which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defense is likely to succeed. The Court does not at this Stage examine the merits of the dispute except to the extent indicated above. So long as a dispute indeed exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application. Going by the aforesaid test of existence of a dispute , it is clear that without going into the merits of the dispute, the appellant has raised a plausible contention requiring further investigation which is not a patently weak legal argument or an assertion of facts unsupported by evidence. The defense is not spurious, mere bluster, plainly frivolous or vexatious. A dispute does truly exist in fact between the parties, which may or may not ultimately succeed, and the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice under the statutory period prescribed under Sec.8(2) of the I B Code. Therefore, on the basis of law laid down by Hon ble Supreme Court in the case of Mobilex Innovations Private Limited (supra) it is clear that corporate debtor has taken the defence of existence of dispute as a frivolous ground and in fact no dispute truly exists in between the parties relating to the service rendered by the operational creditor in Orissa for which contract was separate. 40. Regarding the other objection of not compliance with the requisite formalities within the prescribed period of seven days, it is to be clarified that above objection is also not sustainable in the light of the judgment of Hon ble Supreme Court in the case of Surendra Trading Co. vs. Juggilal Kamlapat Jute Mills Ltd. Ors. (supra). 41. The corporate debtor has taken the plea that operational creditor has not complied with the provision of Sec.9(3)(c). It appears from the record that operational creditor has filed certified copy Of the bank statement along with the affidavit wherein it is stated that to comply with the above provision he has asked the bank to issue certificate for submission in court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis. In fact, the said dispute was existing relating to the service rendered by the operational creditor in UP for which there was separate agreement executed on different dates, and there was no interconnection between the contract made for Orissa and the contract awarded regarding the same service of UP. 43. The operational creditor has also proposed the name of Interim Resolution Professional, Shri Chhedi Rajbhar, who is competent to work as IRP. No disciplinary proceeding is pending against him. Therefore, Shri Chhedi Rajbhar deserve to be appointed as Interim Resolution Professional. Thus, the petition for initiation of Corporate Insolvency Process under section 9 of the Insolvency Bankruptcy Code, 2016 deserve to be admitted. ORDER Petition for initiation of Corporate Insolvency Process under section 9 of the Insolvency Bankruptcy Code, 2016 is admitted. Shri Chhedi Rajbhar, (Reg. No. IBB1/1PA-001/1P00129/2017-18/ 10271) is appointed as Interim Resolution Professional. 1. Moratorium under section 14 of Insolvency Bankruptcy Code shall apply on the following: (a) The institution of suits or continuation of p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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