M/s Knight Frank India Pvt. Ltd. vs RAF Stationers Private Limited

Per: Virendra Kumar Gupta., Member (Technical)

The present application has been filed by Operational Creditor, namely M/s Knight Frank India Pvt. Ltd. under Section 9 of Insolvency & Bankruptcy Code, 2016 (herein after referred to as "IBC, 2016") for initiation of Corporate Insolvency Resolution Process (hereinafter referred to as “CIRP”) against the Corporate Debtor, namely RAF Stationers Private Limited.

In support of its claim, the operational creditor has placed on record copy of the service agreement dated 08.05.2017 entered into between the Operational Creditor and the corporate debtor for providing services as a broker in regard to lease/ rent of commercial property as well the invoices raised for the service provided for which the payment were not made. In spite of requests by the operational creditor when the amount due was not paid, the operational creditor sent a demand notice dated 21st November, 2018 which was duly received by the corporate debtor and the same was replied by the corporate debtor on 04.12.2018 raise implausible grounds. Affidavit in compliance with Section 9(3)(b) and Section 9(3)(c) of IBC, 2016 has also been placed on record.

Ld. Counsel appearing on behalf of the Operational Creditor submitted pursuant to the engagement agreement dated 08.05.2017 entered into between the Operational Creditor and the corporate debtor, the operational creditor was appointed as a broker with regard to lease rent of commercial property bearing Plot No. B 30A, Sector 85, Noida, UP in which it was agreed between the parties that the Corporate Debtor will pay the Brokerage fee of three months and the amount will be due on signing the definitive agreement with the lessor or on handling over of the possession of premises, whichever is earlier.

It is further submitted that a sub-lease agreement dated 29th September 2017 was entered into between Corporate Debtor and IMI Norgren Herion Pvt Ltd. for the afore mentioned a property for the services to be provided by the Operational creditor and the rental was fixed as of Rs. 14,03,000/-.

It is further stated that subsequently, a tax invoice of Rs. 54,22,572/- dated 29.03.2018 was raised by the operational Creditor towards brokerage fees for lease of the property and the counsel for the operational creditor has relied upon the various emails sent for processing of the invoice but the corporate debtor failed to make the requisite payment.

It is further submitted that the outstanding payment of Rs. 54,22,572/- is still due and no dispute has ever been raised by the corporate debtor prior to the delivery of demand notice under Sec 8 IBC, 2016.

In reply to the Operational creditor's application under section 9 of IBC, 2016, the corporate debtor submits service agreement dated 8th may 2017 was neither signed nor stamped by the official seal of the Corporate Debtor as the Corporate Debtor has never authorized anyone to execute the said letter by a board resolution of the Corporate Debtor.

It is further submitted that the parties entered into the agreement on 08.05.2017 and the invoices were raised on 29.3.2018 i.e. after 11 months from the execution of the engagement agreement, further, it was submitted that the original invoices were never sent to the Corporate Debtor.

In its rejoinder, the Learned Counsel for the Operational Creditor submitted that at the time when the parties entered into the agreement, Mr. Pradeep Arora and Mr. Amritt Lall Arora were on the Board of Directors of the Company and vide email dated 10.04.2017 the terms of the agreement were sent to them and the same was approved by Mr. Pradeep Arora but later, on 20.12.2018, he resigned and, therefore, he is at present not in charge of the affairs of the company.

We have considered the submissions made on behalf of both sides.

In this case, the very basis of the claim i.e. engagement agreement dated 8th May 2017 is being challenged on the ground that the person who signed the engagement agreement was not authorized to do so and the responsible person namely Mr. Pradeep Arora and Mr. Amrit Lall Arora (Directors of the Corporate Debtor) was not aware of this engagement agreement. However, on the contrary, we find that in the very first mail, the person who is making the above claim is in the loop. Hence, on this basis alone, it cannot be said that there was no awareness of such negotiations and the signing of this agreement.

It is further noted that the person who signed the engagement agreement was holding the office of the director of the company. Further, the fact of rendering services is not in dispute. Thus, in our opinion, if we accept the claims on behalf of the Corporate Debtor then it will result in a situation where a Corporate Debtor was rendering services either for free or as a matter of charity or for no consideration. This cannot a situation, where the reputed firm is involved as an Operational Creditor which is one of the leading firms in providing such kind of services. Thus, we hold that there is no merit in the claims made on behalf of the Corporate Debtor and the claim so made does not fall in the category of pre-existing dispute.

We further hold in all eventualities, that the undisputed amount of liability would be more than the thresh-hold limit and prescribed u/s 4 of IBC, 2016.

The application is otherwise complete and in compliance with all other requirements of Section 8 & 9 of IBC, 2016 r/w Application to (Adjudicating Authority) Rules, 2016.

We have also considered the other submissions on behalf of the Corporate Debtor, however, we do not find any merit in those claims as these appear to be afterthoughts and just to avoid the liability to pay the consideration after availing the services. Further, no material has been brought on record to show that no services were rendered by the Operation Creditor. The name of the IRP has not been proposed. It is not mandatory also in case of an application filed u/s9 of IBC, 2016.

As the operational creditor has not proposed the name of IRP. Hence, a duly qualified Insolvency Professional registered with IBBI and eligible for the location of the corporate debtor may be appointed as IRP. Accordingly, we appoint Mr. Sudesh Kumar IBBI/IPA-001/IP-P-02525/2021-2022/13881 from the list of IBBI which is currently in operation for the jurisdiction of this Adjudicating Authority.

Accordingly, this application is admitted on the following terms and conditions:-