TMI Blog2020 (9) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 9 of the I B Code cannot be admitted. Business transactions worth several hundreds of crores of rupees took place between the operational creditor and the corporate debtor. Therefore, the dispute raised by the corporate debtor cannot be said to be spurious, hypothetical or illusory. The next contention of the corporate debtor, in the alternative, is that the amount given as advance does not fall under the definition of operational debt. The case of the operational creditor is that money was given as an advance for supply of gift cards. It is true that advance, if any, given, does not come under the definition of operational debt. The case of the corporate debtor is that money was given for supply of gift cards after uploading the cards at ₹ 10,000/-per card. The money is given for uploading gift cards. Therefore, it cannot be said in the strict sense that it was an advance. We are unable to understand that money to be treated as advance of money. Money is intended for uploading cards and only after uploading cards delivery is to be effected. So in the strict sense, money given is not an advance in the nature of transaction carried between the operational cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against each: Date of payment Amount paid ' Cards received by petitioner worth ' Corporate Debtor failed to activate cards worth ' 04.10.2018 6,11,10,000 -- 6,11,10,000 On a subsequent date. 6,02,59,811 1,85,00,000 4,17,59,811 4.4 The petitioner issued legal notices dated 09.10.2018 and on 15.10.2018 for the above two defaults respectively. However, the Corporate Debtor denied its liability. The petitioner filed a complaint dated 16.11.2018 with the Economic Offences Wing of Delhi Police. On 29.03.2019 the petitioner issued Demand Notice calling upon the respondent to repay ₹ 10,28,69,811/- with interest. 4.5 The respondent filed FIR dated 30.03.2019 with Madhapur Police Station, Cyberabad against the petitioner only to frustrate the claims of the petitioner and entangle the petitioner in legal proceedings. The petitioner received notice dated 02.04.2019 under section 41A of the Code of Criminal Procedure from PSO, Madhapur. The petitioner submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count of 1 - 2 % to its channel partners including the petitioner, to sell Gift Cards, as purchased from respondent, to corporates. Copies of Invoices raised on the Operational Creditor for the period from October 2017 to March 2018 are at ANNEXURE 'A-3' to the Counter. 6.3 It is alleged in paras 5.11 and 5.12 of the Counter that the officers of the petitioner, named in this para, in connivance with the former employees of the respondent, raised false and fabricated Invoices (ANNEXURE 'A-4'), to claim huge margin, resulting into heavy monetary losses to the respondent and as a result thereof the petitioner owes an amount of ₹ 30 crores approximately. 6.4 It is averred in paras 5.14 and 5.15 of the Counter the petitioner claimed ₹ 6,11,10,000/- which amount has been adjusted against the outstanding amount owed by the petitioner. The respondent had intimated to the petitioner about such adjustment and demanded to pay the balance amounts through e-mail dated 07.10.2018 (ANNEXURE 'A-5'). 6.5 It is averred in paras 5.16, 5.17 and 5.18 of the Counter that instead of paying the outstanding amounts the petitioner, vide Legal Notice dated 9.10.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.1, 6.1.2 and 6.1.3 of the Counter the respondent has furnished detail of communications/complaints/proceedings between the petitioner and the respondent in chronological order commencing from 08.10.2018 to 30.03.3019, and laid emphasis that the Demand Notice dated 01.04.2019 and the proceedings being prior to the date of Demand Notice there exists pre-existing dispute. In this regard the respondent relied on decision of the Hon'ble Supreme Court in the case of MOBILOX INNOVATIONS PRIVATE LTD Vs. KIRUSA SOFTWARE PRIVATE LTD., (2018) 1 SCC 353. Relevant para relied on by the respondent is reproduced hereunder: 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 a dispute is pending between the parties. Therefore, all that the adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n para 6.4.4 of the Counter, on question of tainted hands, the respondent relied on decision of the Hon'ble Supreme Court in RAMJAS FOUNDATION Vs. UNION OF INDIA, (2010) 14 SCC 38. 6.19 In para 6.4.5 of the Counter, on the question of 'unclean hands' the respondent relied on decision of the NCLT, Delhi Principal Bench in UNIGREEN GLOBAL PRIVATE LIMITED, rendered in CP No. IB-39 (PB)/2017. 6.20 In para 6.5.2 of the Counter the respondent wondered about the conduct of the petitioner as the petitioner raised Demand Notice dated 09.10.2018 for an amount of ₹ 6,11,10,000/-, whereas vide Demand Notice dated 29.03.2019 the claim was increased to ₹ 10,28,69,811/-. Thereafter the petitioner slashed down the claim to ₹ 50,00,000/-. 7. REJOINDER DATED 11.09.2019 FILED BY THE PETITIONER/OPERATIONAL CREDITOR. 7.1 By way of Preliminary Objections it is averred in para 9 of the Rejoinder that the standard practice was not followed by the Corporate Debtor and discounts offered to the Operational Creditor varied from 1.4% to 4% which can be appreciated from the evidence placed on record by the operational creditor. The Corporate Debtor has misled the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verments made in the preceding paras were reiterated to emphasize about 100% advance payments were made to Corporate Debtor against the offer of 3 - 5% discount on the value of cards to be sold to corporates at large; about concealment, about disputed and fabricated invoices. The Operational Creditor enclosed the true and correct invoices along with supporting e-mail messages and certified bank statements at ANNEXURE-A to this rejoinder. 7.6 In para 5.11 of the Rejoinder it is averred that the claim of Corporate Debtor for ₹ 30 crores is completely baseless, bogus and fraudulent as is evident from the documents. It is further averred that the claim of ₹ 25 crores raised by the Corporate Debtor has no legal sanctity as earlier e-mail dated 04.10.2018 raised by the Operational Creditor talks about activation of cards against which 100% advance payment of ₹ 6,11,10,000/- was made by the Operational Creditor and the Corporate Debtor has failed to honour his commitment. 7.7 In para 5.12 of the Rejoinder it is averred that the Corporate Debtor having received 100% payment from the Operational Creditor failed to activate cards and deliberately blocked the cards. Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .10.2018 issued by Operational Creditor it amounts to admission of their liability towards operational creditor. In sub-clause (2) of this para it is averred that Legal Notice dated 09.10.2018 issued by Operational Creditor is admitted. Separate Legal Notice dated 15.10.2018 has been issued to Corporate Debtor relating to a different transaction, which has not been replied by the Corporate Debtor. 7.13 In para 6.1.3 it is averred that the judgment relied on by the Corporate Debtor in the case of MOBILOX INNOVATIOINS PRIVATE LTD Vs. KIRUSA SOFTWARE PRIVATE LTD., (2018) 1 SCC 353 is not applicable to the facts of the present case. 7.14 In para 6.1.4 it is averred that the Directors are on bail and personal presence of the representatives of Operational Creditor is dispensed with by the Hon'ble High Court. 7.15 In para 6.3.4 it is averred that the decision of the Hon'ble NCLAT in PRADEEP KUMAR MUDNRA Vs. CIL SECURITIES LIMITED, rendered in Company Appeal (AT) (Insolvency) No. 89 of 2019, relied on by the Corporate Debtor is not applicable to the facts of the present case. 7.16 It is averred in para 6.4.1 that as per e-mail a false claim of ₹ 25 crores was rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for want of KYC details of the petitioner and its customers said cards were blocked by banker. The respondent had nothing to do with such blockage. 8.3 It is averred in paras 8.7, 8.8 and 8.9 of the Additional Counter that the allegation of suppression of Notice dated 15.10.2018 by the respondent is untenable as the petitioner itself has filed the said document along with the petition. On the contrary it was the petitioner who suppressed the essential e-mail communication dated 07.10.2018 exchanged between the petitioner and the respondent. However, the respondent has not produced the said document before the Tribunal. By way of rejoinder the respondent acknowledged receipt of the said communication and pleaded inadvertence. It is contended that the said amounts to suppression of fact. 8.4 In paras 8.10 and 8.11 of the Additional Counter the respondent relied on decision of the Hon'ble Supreme Court in the case of S.P. CHENGALVARAYA NAIDU Vs. JAGANNATH, 1994 (1) SCC 1, more particularly the following observations: A litigant, who approaches the court, is bound to produce all the documents executed by him which are relevant to the litigation. If he withholds a vital do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did the petitioner not claim discounts at the same higher rates from October 2017, and why claimed only from April 2018. It is averred that the petitioner wants to enrich itself by fabricated invoices. 8.13 In paras 9.5 and 9.6 of the Additional Counter it is averred that on one hand the petitioner raises fabricated invoices and on the other it relies on whattsapp chats and voice recordings. Since the invoices (Anneuxre-3) are false the petitioner relies on WhatsApp chats. It shows that the invoices and WhatsApp chats/voice records are all fabricated. Thus, it is contended that there are pre-existing disputes between the parties. Hence CIRP cannot be admitted as held by the Hon'ble Apex Court in various decisions. 8.14 In para 9.7 of the Additional Counter it is averred that 100% advance payment is made by the petitioner is false. Though invoices raised by the respondent show 100% advances there are underpayments towards such invoices amounting to ₹ 29,99,27,454/-. 8.15 In para 9.9 of the Additional Counter it is averred that the petitioner is not certain as to the amounts claimed since such claims are on the basis of fabricated documents. Hence the petition is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dated 09.10.2018 and 15.10.2018 as contended by the petitioner, then there ought to be no meaning to the legal notices issued by the petitioner as well. 8.23 In para 9.25 of the Additional Counter it is averred in response to the petitioner's contention that the claims of the respondent are time-barred, that the respondent started demanding payments and adjusted ₹ 6,11,10,000/- received from the petitioner on 04.10.2018 and turned around the false claims. 8.24 In para 9.26 of the Additional Counter it is averred that the respondent in good faith has loaded Gift Cards for more than the amount paid by the petitioner. Consequently, an amount of ₹ 29,99,27,454/- has become due and payable by petitioner. The respondent by e-mail dated 07.10.2018 demanded payment of outstanding dues. Thus, the respondent's claim is within limitation. 8.25 In paras 10.1 and 10.2 of the Additional Counter it is averred that the respondent learnt about transfer of complaint filed by petitioner before EOW, Delhi to EOW, Hyderabad through rejoinder only. However, the respondent will cooperate with the process. 8.26 In para 10.4 of the Additional Counter it is admitted that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Additional Counter. 9. COUNTER DATED 19.11.2019 FILED BY THE RESPONDENT/CORPORATE DEBTOR. 9.1 It is averred on page 2 of the Counter that the Corporate Debtor has filed IA No. 851 of 2019 seeking original invoices from the petitioner alleged to have been issued by the Corporate Debtor. The Tribunal allowed the said IA directing the petitioner to submit such original invoices. The petitioner instead of complying with the directions of the Tribunal had preferred to file Affidavit for Amendment for reduction of the claim. This Counter essentially rebuts the averments made in the said Affidavit for Amendment. 9.2 In para 2 of the Counter it is averred that the respondent had no role to play in alleged blocking of 11,803 Zaggle Kuber Cards to the tune of ₹ 6,02,59,811/- once they are sold by the respondent. 9.3 In para 3 of the Counter it is averred that as stated earlier blocking of cards was due to non-compliance of KYC norms by the petitioner and its customers. The respondent has nothing to do with it. It is denied that the respondent in connivance with RBL Bank had blocked the cards and subsequently unblocked few of the cards. It is further averred when KYC no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the petition and the rejoinder. Whereas, Annexure-A and proceedings before the Banking Ombudsman between RBL Bank and the petitioner establish that the issue was between RBL Bank and the petitioner and respondent had nothing to do with the alleged amount. It is thus, alleged that the petitioner makes multiple averments to harass the respondent. 10. We have heard the learned counsel for the operational creditor and the learned counsel for the corporate debtor. This application is filed under section 9 of the I B Code alleging that the corporate debtor committed default of an amount of ₹ 10,28,69,811/- along with interest at the rate of 18% per annum. The said amount became due on 06.10.2018. The learned counsel for operational creditor would contend that the operational creditor paid ₹ 6,11,10,000/- to the corporate debtor for purchase of Zaggle Kuber Cards of the value of ₹ 10,000/-per card. The learned counsel contended that payment was made on 04.10.2018 to the corporate debtor, who was supplying pre-paid cards, namely, Zaggle Kuber Cards to be given to corporates as gift cards. The learned counsel contended that the corporate debtor admitted having receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel contended that unblocking of cards by RBL Bank was done only at the instance of the corporate debtor after filing of the present case. The learned counsel contended that there was no pre-existing dispute and the alleged dispute is spurious, imaginary and there is no document to substantiate the same. 13. E-MAIL WRITTEN ARGUMENTS DATED 01.06.2020 FILED BY THE OPERATIONAL CAREDITOR. The learned counsel for the operational creditor submitted Written Arguments on 01.06.2020. The points urged in the Written Arguments will be dealt with in the course of the order. The learned counsel for the ' operational creditor would contend that an amount of ₹ 6,02,59,811/-was given to the corporate debtor towards Gift Cards and the corporate debtor subsequently blocked the cards in connivance with the RBL Bank. Legal Notice dated 15.10.2018 was sent to the corporate debtor, who had not given any reply. Thereafter, the Gift Cards worth ₹ 1,85,00,000/-were activated and the Gift Cards worth ₹ 4,17,59,811/- were not unblocked and hence the said amount was claimed as operational debt due by the corporate debtor. Subsequently, the matter was taken up by the Banking Ombu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AL PROSERV LIMITED, rendered in CP No. 1584/IBC/NCLT/MB/MAH/2017 and contended that advance given is operational debt in a given circumstance of the case. Thus, the learned counsel contended that the defence taken by the corporate debtor as if there was pre-existing dispute is not supported by any material and as such the petition is liable to be admitted. 15. On the other hand the learned counsel for the corporate debtor vehemently contended that there was a pre-existing dispute. The learned counsel contended that the operational creditor had played fraud and obtained cards and an amount of ₹ 31 crores fell due. The learned counsel contended that the operational creditor filed fabricated invoices obtained in collusion with the erstwhile staff members of the corporate debtor. The learned counsel contended that all the invoices relied on by the operational creditor are fabricated and created in the sense that the invoices for the period from April 2018 to October 2018 would establish that the discount allowed was at 4% which was never the practice adopted by the corporate debtor. The discount offered in the real invoices filed by the corporate debtor would go to show that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no default of the alleged operational debt and that the petition is liable to be rejected. 16. The learned counsel for the corporate debtor relied on the following decisions: (i) Mobilox Innovations Private Limited Vs. Kirusa Software Private Limited, (2018) 1 SCC 353. (ii) Transmission Corporation of Andhra Pradesh Limited Vs. Equipment Conductors Cables Ltd., - Supreme Court. (iii) Anjani Gases Vs. BP Projects Private Limited, MANU/NC/0034/2019 : - NCLT, Kolkata. (iv) A.D. Electro Steel Company Private Limited Vs. Anil Steels, MANU/NL/0146/2017 : - NCLAT, New Delhi. (v) SP Changalvaraya Naidu Vs. Jagannath ors., 1994 (1) SCC. (vi) Vision Millennium Exports Private limited Vs. Edelweiss Rural Corporate Services Private Limited, CP (IB) No. 387/9/HDB/2019- NCLT, Hyderabad. (vii) Nikhil Mehta Son (HUF) ors. Vs. M/s. AMR Infrastructures Ltd., - NCLT Principal Bench. (viii) Vinod Awasthy Vs. AMR Infrastructures Ltd., MANU/NC/0443/2017 : - NCLT, Principal Bench. (ix) Sanjive Kanwar Vs. AMR Infrastructure, MANU/NC/0104/2017 : - NCLT, Principal Bench. (x) Anvar P.V. Vs. P.K. Basheer ors., MANU/SC/0834/2014 : (2014) 10 SCC 473. 17. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in certain invoices issued on the same day. Thus, the corporate debtor has noticed so many errors in the original invoices filed. One important discrepancy noticed in majority of invoices is that they were all signed with the same pen. When invoices are all of different dates, then how the same pen is used in all these invoices. It is an unexplained suspicion hovering around these invoices. 20. Lot of variations with regard to the discount appearing in the invoices. It is the specific case of the corporate debtor that the discount was allowed from 1% to 2% and not more than that. Whereas, in the invoices said to have been issued by the corporate debtor, which are filed by the OC, the discount allowed is between 3.25% and 4%. The invoices ' where discount is allowed between 3.5% to 4% are all signed by different persons. The corporate debtor filed certain invoices where authorised signatory signed in the column provided in the invoice. Thus, the operational creditor filed certain invoices where authorised person signed in the column meant for signature on behalf of the corporate debtor. There are two inner rounds in the round seal in the invoices filed by the corporate debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce and the same was also informed to the operational creditor by the corporate debtor through e-mail dated 07.10.2018. 24. A dispute was existing between the operational creditor and the corporate debtor which was much prior to the Demand Notice. This dispute was not raised after the Demand Notice. Whether this dispute is spurious, hypothetical or illusory? If the dispute falls in any of three categories, then such a dispute cannot be taken note of, because the corporate debtor has categorically admitted having received ₹ 6,11,10,000/-. 25. It is also not in dispute that Legal Notice was issued on 09.10.2018 on behalf of the operational creditor to the corporate debtor in respect of an amount of ₹ 6,11,10,000/-. A reply was given to this Legal Notice on behalf of the corporate debtor dated 23.10.2018. Both the sides filed legal notice and reply. In the reply the corporate debtor was contending that the operational creditor was liable to pay ₹ 31 crores in connection with the business transaction and the amount of ₹ 6,11,10,000/- was adjusted against the balance outstanding. Thereafter, Demand Notice was issued on 29.03.2019. Again reply was also given ..... X X X X Extracts X X X X X X X X Extracts X X X X
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