TMI Blog2020 (10) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... ivil Court and renumbered as O.S. No. 2545 of 2019, which is pending before the appropriate Civil Court demonstrates that the Operational Creditor is also not remediless and the pending proceedings itself shows that there is a pre - existing dispute between the parties. This Tribunal in exercise of summary jurisdiction cannot also venture as to whether installation of the concerned software was done properly and whether it is working, all of which the Civil Court will be in a position to ascertain based on oral evidence, if found necessary. Application dismissed. - IBA/1427/2019 - - - Dated:- 5-5-2020 - R. Varadharajan, Member ( J ) And Anil Kumar B. , Member ( T ) For the Appellant : H. Karthik Seshadri, C. Suraj , R. Sivaraman For the Respondent : Sarat Chandra and Raghav , Advocates ORDER R. Varadharajan , Member ( J ) 1. This Application has been filed under Section 9 of the Insolvency Bankruptcy Code, 2016 ( hereinafter referred to as IBC, 2016 ) by M/s. Aavanor Systems Private Limited (hereinafter called as Operational Creditor ) for the purpose of initiating the Corporate Insolvency Resolution Process (CIRP) against M/s. PERS Enterprises Priva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of the Corporate Debtor's hospital and further for the purpose of implementation, training and customization of the software, a total of 330 man days had to be provided by the Operational Creditor at the workplace of the Corporate Debtor. It is submitted that all the staff of the Operational Creditor who had viewed demonstration of the product DOC 99 had certified its suitability for the hospital while specifying that significant customisation of the software would be required for smooth operations of the hospital department. 6. The Learned Counsel for the Operational Creditor submitted that it was agreed between the parties that the Operational Creditor would perform the customization as requested by the Corporate Debtor during the course of implementation process and the charges would be ₹ 3,000/- per man day of the effort put in by the Operational Creditor. Further as per the terms of the Purchase Order dated 18.03.2019, the Corporate Debtor has to pay 50% of the Invoice amount as advance amount, 25% of the invoice amount has to be paid after 60 days from the date of purchase order and remaining 25% of the invoice amount after 120 days from the date of Purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m. For the software customization done for the period from 07.06.2017 to 07.09.2017 (8 resources for 80 days), an Invoice vide No. PERS/4a dated 11.09.2017 for a sum of ₹ 22,65,600/- was raised against the Corporate Debtor and in respect of customization for the period from 08.09.2017 to 06.01.2018, (8 resources for 94 days), an Invoice vide No. PERS/5 dated 13.01.2018 for a sum of ₹ 26,62,080/- was raised by the Operational Creditor against the Corporate Debtor. 9. The Learned Counsel for the Operational Creditor submitted that the Operational Creditor had deployed about 2000 man days without any compensation from the Corporate Debtor and solely based on the trust reposed on the Corporate Debtor, the Operational Creditor deployed enormous man days at the workplace with a hope that the Corporate Debtor would honour its commitment to settle the outstanding dues. Thus, it was submitted by the Learned Counsel for the Operational Creditor that the Corporate Debtor owes in total a sum of ₹ 61,28,920/- as on 19.06.2019 under the following heads; i) A sum of ₹ 22,65,000/- vide Invoice dated 11.09.2017 ii) A sum of ₹ 26,62,080/- vide Invoice dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er for the SIMS Hospital. It is primarily contended by the Corporate Debtor that even before the issuance of the Demand Notice, the Corporate Debtor by their reply legal notice dated 05.05.2018 has raised dispute in relation to the materials supplied by the Operational Creditor and further contended that in the said reply notice the Corporate Debtor has categorically stated that the fee fixed for implementation, training and customization work was only ₹ 9,90,000/- and not beyond that. 13. The Corporate Debtor further contends that the Corporate Debtor has demanded for the refund of the entire advance paid along with the damages in the said reply letter and the Corporate Debtor has initiated a legal proceeding C.S. No. 563 of 2018 which was transferred to Additional City Civil Court in O.S. No. 2545 of 2019 for the recovery of the same which is still pending for adjudication and this clearly explains that there is a pre-existing dispute between the parties prior to the issuance of the Demand Notice by the Operational Creditor and hence prayed for the dismissal of the present Application. 14. Heard both sides and perused the records and the documents placed on file. Prim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber of departments dynamically and any number of services dynamically online diagnostics request, online result updation, SMS results and the said work was not done by your client and the action of your client amounts to violation contract/work order dated 18.03.2017. 16. Further, it is axiomatic from the typed set of documents filed by the Operational Creditor themselves that the Corporate Debtor have filed a Civil Suit before the Hon'ble Madras High Court vide C.S. No. 563 of 2018 which came to be transferred to Additional City Civil Court and renumbered as O.S. No. 2545 of 2019, for the recovery of the advance amount paid by the Corporate Debtor to the Operational Creditor and also claimed a sum of ₹ 25,00,000/- towards damages and the same is still pending for adjudication. It is also evident from the records, that before the issuance of the Demand Notice, the Corporate Debtor by its letter dated 05.05.2018 has raised a dispute in relation to the service rendered by the Operational Creditor and has also claimed damages by filing a Civil suit before the Civil Court. Section 8 of IBC; 2016 read as follows; 8. Insolvency resolution by operational creditor. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istence of a dispute and/or the record of the pendency of a suit or arbitration proceeding filed before the receipt of such notice or invoice in relation to such dispute [Section 8(2)(a)]. What is important is that the existence of the dispute and/or the suit or arbitration proceeding must be pre-existing i.e. it must exist before the receipt of the demand notice or invoice, as the case may be. 17. Eventhough reliance was sought to be placed by the Learned Counsel for the Operational Creditor upon the very same Judgment and paragraph 50 of the Mobilox Judgment as cited above, in paragraph 51 it is held: 51. ......Therefore, all 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. 18. Thus, from the evidence placed on records, we are of the considered view that there exists a 'dispute' between the parties before the issuance of the Demand Notice itself and the defence raised by the Corporate Debtor on the grounds of existence of a dispute cannot be considered as spurio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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