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TMI Blog2019 (1) TMI 1935X X X X Extracts X X X X X X X X Extracts X X X X ..... ,48,138/-, as on 29.04.2016 (inclusive of interest till 20.12.2017). A) Background of the Case : 3. The Corporate Debtor entered into Finance Advisory Service for Lease Rental Discounting with Operational Creditor vide a Mandate Letter dated 09.03.2016. As per the said Mandate Letter, the Operational Creditor agreed to assist the Corporate Debtor to raise funds/debt for takeover of existing credit limit with JMFARC from banks/NBFCs. The total fund requirement of the Corporate debtor as per the said Mandate Letter was Rs.16.50 Cr. 4. The Consideration for the Advisory Service was set at 3.5% of the Sanctioned Loan amount of Rs.16.50 Cr. The payment was to be made in the following manner: Particulars Amount On signing of the Mandate for assigning the contracts Rs.2,00,000/- (Note: the advance amount is subject to success of assignment otherwise it is fully refundable). On receipt of the Bank sanction Letter 50% of the balance fee, which will be adjusted against the total amount of fees including success fees i.e. Rs.27.88 Lakhs On First disbursement of the loan Balance amount of Rs.27.88 Lakhs Delayed interest 18% p.a. and service tax is applicable. B) Submissions by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Debtor. The Corporate Debtor has replied to the demand Notice vide letter dated 31.10.2017 raising various disputes for the first time in the amount claimed. In the Demand Notice, the claim is pertaining to the invoice dated 30.04.2016, issued by the Operational Creditor to the Corporate Debtor, as contended by the Learned Authorised Representative. 9. It is finally argued that since the Debtor is not making the payment and all the procedural formalities have been complied with, this Petition/Application may be Admitted for the initiation of the CIRP. C) Contentions of the Corporate Debtor: 10. In the reply letter dated 31.10.2017, the Corporate debtor outrightly rejects the claim of the Operational Creditor stating that there was no role played by the Operational Creditor in availing the loan facility from Indiabulls. The Invoice No. 2016- 17/SHPL/01 dated 30.04.2016, as claimed by the Operational Creditor to have been issued to the Corporate Debtor, the Corporate Debtor contends, is fictitious and has never been received by the Corporate Debtor. The invoice is dated much prior to actual sanction of loan i.e. 10.05.2016 by Indiabulls. The Corporate debtor contends t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Corporate Debtor has submitted its Affidavit in Sur-rejoinder to the Application. It is contended that the document showing the cash book entries produced along with the rejoinder are an afterthought to show the payment of Rs.15,00,000/-. No documentary evidence has been produced on record to show the service of the alleged invoice to the Corporate debtor. For the first time in the rejoinder, the Operational Creditor came up with the assertion that 10 cheques were issued by the Corporate debtor to the Operational Creditor. It is further asserted that if the Operational Creditor was the Direct Sales Agent (DSA) to Indiabulls, then Indiabulls must have paid commission to the DSA. However, in the present case, Indiabulls has not paid any commission to the operational Creditor, which further asserts the fact that the Operational Creditor did not get the loan sanctioned from Indiabulls. The corporate Debtor denies all the payments, including TDS made against the professional fees of the Operational Creditor. The Corporate Debtor submits that the documents produced by the Operational creditor i.e. Ledger accounts, cash Book etc, are unilateral documents and are not corroborated by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncial year 2016-17. Therefore, it can be noticed that the present case in hand clearly falls under the 'dispute as to the existence of amount of debt'. 17. Considering these facts and circumstances, in my humble opinion, there is a preexisting dispute as defined under section 5(6) of the IBC which reads as follows: (6) "dispute" includes a suit or arbitration proceedings relating to- (a) the existence of the amount of debt; (b) the quality of goods or service; or (c) the breach of a representation or warranty; 18. In the present case, it seems that the Petitioner is not sure about its claims and have mentioned different and inconsistent calculations of the alleged excess amount. The correct position of the outstanding debt has not been revealed to this Bench till date. It is clear that a "dispute" as to the existence of the amount of debt is in existence as discussed supra, and the same has been raised by the Corporate debtor time and again. 19. In this connection, in the decision of the Hon'ble Supreme Court in Mobilox Innovations Private Limited v. Kirusa Software Private Limited, Civil Appeal No.9405 of 2017 dated 21.09.2017 wherein vide Para 40, an observation ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is a plausible contention which requires further investigation and on assertion of fact a dispute is supported by evidence. The expression used in Section 8(2) of the Insolvency & Bankruptcy Code "existence of a dispute, if any" is very significant because the Legislature is deemed not to waste its words or to say anything in vain hence every word is significant, as held in Mithlesh Singh Vs. Union of India, (2003) 3 SCC 309. It is also important to clarify that if the intent of the Legislature was to limit the dispute to only a pending Suit or Arbitration (refer Section 5(6) Definition of Dispute) then there was no requirement to add in Section 8(2)(a) of the Code "existence of a dispute, if any". A harmonious and co-joint reading is, therefore, required. A view has also been expressed that the definition of 'dispute' as per Section 5 of Insolvency & Bankruptcy Code is illustrative and not exhaustive. It is held that a 'dispute' must not be spurious, hypothetical or illusory, quoted verbatim "So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application". The Adjudicating Authority is also expe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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