TMI Blog2024 (4) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... any debt and the Appellant is not an Operational Creditor as they were not supplying any goods or services to the Respondent is not tenable. It is concluded that there is a relationship of operational creditor and corporate debtor between the Appellant and Respondent. Whether there is any pre-existing dispute between the parties which will disallow initiation of CIRP proceedings? - HELD THAT:- Respondent was undertaking the responsibility for issuance of the debit notes and when ADMs were issued by the airlines, a debt arises and the unconditional undertakings will act as an acknowledgment of debt towards the Appellant - When the demand notice was issued under Section 8 of the IBC, 2016 on 22.08.2018, it was disputed in its reply by the Respondent vide letter dated 08.09.2018. There are police complaints also on record. It had become a criminal case. Thus it had become a dispute and is not a spurious, hypothetical or illusory dispute. From the correspondence on record, it can be clearly made out that there is a pre-existing dispute. The Adjudicating Authority has gone into the circumstances of their business dealings and have come to the conclusion that the dispute raised by the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent were accepted by the Appellant and tickets were booked by the Appellant for the passengers of M/s Elumatec UK Limited during the period of 04.04.2017 to 13.04.2017. The entire process of issue and booking of tickets was done by the credit cards of the intending purchaser of the air tickets. The payments against such booking was made through the credit cards referred by the purchaser of such tickets i.e. M/s Elumatec UK Limited. The payment through credit cards is processed by the banks issuing such credit cards when the card is swiped followed by entering three-digit pin number. The actual amount to be charged is transmitted to the Bank, which has issued the credit card. After the payment is received by the Bank of the Airlines, the confirmation of payment is received by the travel agency within few minutes of the transaction from the Bank. Thereafter, the travel agency issues the air tickets. Submissions of the Appellant/ Akbar Travels of India Private Limited: 3. In April, 2017, the Respondent had approached the Appellant and requested the Appellant to process and issue Sold Outside Ticketed Outside ( SOTO ) tickets for their clients on credit card basis. On 08.04.2017, Resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in case the disputes are rejected, the Respondent will be liable to pay the same. On 31.05.2017, the Respondent made a payment of lump-sum amount of Rs.3,40,000/- to the Appellant towards the above said 4 ADMs, against which the time period of raising the dispute was already over. In the meantime, the Appellant informed the Respondent on 15.06.2017, that the dispute which was raised regarding the ADMs has been rejected by the Airlines and the payment qua the same is to be made to the Airlines. The Respondent on the same day replied, to once again convince the Airlines for dispute. Further, various ADMs were issued by the Airlines and accordingly, the first cycle of ADMs aggregating to Rs.44,92,880/- was to be paid by 26.06.2017 and the next cycle of ADMs of Rs.44,92,880/- was due to be paid and ADM s amounting to Rs.22,17,207/- was due to be paid by 31.08.2017. 5. The Appellant requested the Respondent many times to make the payments qua the ADMs but the Respondent failed to make the same. As the IATA Regulations provides for blacklisting of the agency, in case of nonpayment of ADM s, therefore, the Appellant paid the same to avoid its black listing and save its business. 6. Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent to indemnify against such losses. Appellant cannot demand any kind of payment from the Respondent, since the tickets were issued by the Appellant only after the credit cards transactions were duly honoured by the issuing Bank. After a lapse of time, the Respondent in no way can be made liable for the charge back received from the credit card issuing Bank. Various correspondences were exchanged between the Respondent and the Appellant in respect of the bookings of the air tickets booked between 04.04.2017 to 17.04.2017, which clearly show genuine pre-existing dispute wherein the alleged debt has been denied by the Respondent. Despite such correspondence between the Appellant and the Respondent, the Appellant sent a demand notice on 27.08.2018 under Section 8 of the IBC, 2016 demanding a sum of Rs.1,21,52,221/- in respect of the alleged failed credit card transactions. The Respondent duly replied to the demand notice denying any kind of payment / debt. Despite Appellant s reply and denial of the debt, the Appellant proceeded to file an Application under Section 9 of the IBC. The Appellant has tried to rely on the e-mail of 11.04.2017 sent by Ms. Sewrin Fernandes, an em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to the shoulders of the Respondent, since, the bookings were made by the Appellant itself. Appraisal 15. Heard both sides and perused the documents on record. 16. The primary issue before us is whether in the instant case the Appellant and Respondent are having relationship of Corporate Debtor and Operational Creditor. Further whether there is any pre-existing dispute between the parties which will disallow initiation of CIRP proceedings. 17. We first look into the issue whether in the instant case, the Appellant and Respondent are having any relationship of Corporate Debtor and Operational Creditor. 18. Before going into that, we reproduce the definition of these two. As per Section 5(21) of the IBC, which is reproduced as below: (21) operational debt means a claim in respect of the provision of goods or services including employment or a debt in respect of the payment of dues arising under any law for the time being in force and payable to the Central Government, any State Government or any local authority and the definition of the Operational Creditor under Section 5(20) of the IBC, is reproduced as below: (20) operational creditor means a person to whom an operational debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btor to Appellant : Dear Team, Issue below tickets on VISA CARD 4046******* - 09/17 4021******* - 02/21 4046******* - 01/19 4121******* - 02/21 If any debit note comes against those tickets, then we will be responsible. 21. The facts of the case clearly bring out that the Appellant was acting on the referral instructions of the Respondent and was issuing the air tickets on the basis of the credit card the customers details provided by the Respondent. The Respondent had also given the undertaking that if any debit note comes against those tickets, then they will be responsible. The plea of the Respondent that they are not having any debt and the Appellant is not an Operational Creditor as they were not supplying any goods or services to the Respondent is not tenable. We can therefore conclude that there is a relationship of operational creditor and corporate debtor between the Appellant and Respondent. 22. We have gone through the emails, which were exchanged between the parties. From these emails, it is clear that Respondent i.e M/s Ritco Travels Tours Private Limited, while passing on the referrals to M/s Akbar Travels of India Private Limited had given the undertaking that if any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case may be, depending upon the factors mentioned in Section 9(5) of the Act. XXX 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 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 defence which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defence is likely to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicated above. S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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