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Judgment
ORDER
PER SHRI L. N. GUPTA, MEMBER (T)
M/s. Sahaj Bharti Travels (for brevity ‘Applicant/Operational Creditor’) has filed the present Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (for brevity ‘IBC, 2016’) read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 with a prayer to initiate the Corporate Insolvency Resolution Process against M/s. HCL Technologies Limited (for brevity ‘Respondent/Corporate Debtor’).
That the Corporate Debtor namely, M/s. HCL Technologies Limited is a Company incorporated on 12.11.1991 with CINL74140DL 1991PLC046369 under the provisions of the erstwhile Companies Act, 1956 having its registered Office at 806, Siddharth, 96, Nehru Place, New Delhi 110019. Hence, the jurisdiction lies with this Bench.
That the Authorized Share Capital of the Corporate Debtor is Rs.6,03,40,00,000 and Paid-up Share Capital is Rs.5,42,73,30,192 as per the Master Data of the Corporate Debtor on the MCA website.
It is submitted that the Applicant is engaged in the business of providing transport services on contract basis. That it entered into a registered Agreement for Transport Services (for brevity referred to as “ATS”) dated 19.11.2015 with the Corporate Debtor for provision of transport services for a period of 3 years from 20.04.2015 to 30.04.2018 and which was renewable on mutual consent. It is submitted by the Operational Creditor that the agreement was mutually extended up to 31.12.2018 and as there was no further extension, the agreement expired on 31.12.2018. It is added by him that the last payment was received in June 2017. In Part IV of the Application, the Operational Creditor has claimed the total unpaid Operational debt of Rs.3,54,10,565/-.
That the particulars basing on which the Applicant has claimed its Operational Debt are given under Part IV of the Application, the scanned copy of which is reproduced below :
That the Corporate Debtor has averred that from the date of commencement of the services under the ATS dated 19.11.2015, it has provided services worth Rs.10,04,61,200/- (Ten Crores Four Lakhs Sixty-One Thousand Two Hundred Only), against which he received a sum of Rs. 6,50,50,635/- (Six Crores Fifty Lakhs Fifty Thousand Six Hundred Thirty-Five Only). However, the remaining sum of Rs. 3,54,10,565/- (Three Crore Fifty-Four Lakhs Ten Thousand Five Hundred Sixty Five Only) was not paid by the Corporate Debtor. That from perusal of Part IV of the Application, it is observed that the Applicant has claimed its operational debt solely arising out of the Minimum Guarantee Clause in the ATS existing between the parties up to its expiration on 31.12.2018.
That it is submitted by the Operational Creditor that since the Corporate Debtor did not make the due payment of his operational debt, it had issued a Demand Notice dated 08.05.2019 in Form no. 3 under Section 8 of IBC, 2016 at the registered office of the Corporate Debtor via Speed Post. The Operational Creditor has also annexed the notice of dispute dated 25.06.2019 received from the Corporate Debtor through Advocate Mr. Ravindra Kumar Sharma. The Applicant has filed the Affidavit under Section 9(3)(b) of IBC, 2016 and stated that the Operational Creditor has received a reply to its Demand Notice dated 8.05.2019 on 10.06.2019, however, the Corporate Debtor has failed to raise any dispute with respect to the demand raised by the Operational Creditor and also there is no dispute of unpaid operational debt pending between the parties in any court of law.
That on issuance of notice by this Adjudicating Authority, the Corporate Debtor has appeared and filed its reply as well as the Written Submissions.
It is submitted by the Corporate Debtor that the Petition is barred by limitation. It is added by the Corporate Debtor that the table attached at page no. 74 of the Application contains claims, which are time barred. The list relied by the Corporate Debtor containing the claims, which are time barred is reproduced below :
It is contended by the Corporate Debtor that there is a pre-existing dispute between the parties and in support of its contention, the Corporate Debtor has referred to the e-mail communication exchanged between the parties placed at Annexure 2 from page no. 48 onwards of the Application.
It is further contended by the Corporate Debtor that there is no debt due and payable in terms of the service contract as the Corporate Debtor did not raise invoices for the unpaid Operational debt. In this context, the Corporate Debtor has placed emphasis and drawn attention to the Clause 28 of the ATS.
It is stated by the Corporate Debtor that the Operational Creditor itself has admitted in its Application that it has not issued any invoices for the Operational Debt claim arising out of the Minimum Guarantee Clause of the ATS.
It is further stated by the Corporate Debtor that any payment under the ATS is to be made by the Respondent Company only of the undisputed invoiced amounts. This is clearly provided in Clause 28 of the ATS filed at pages 26-27 of the E-Application. Schedule ‘A’ annexed with the Agreement, does not provide for any independent right of claim. However, it just provides for the mode of computation/calculation of the claim in furtherance of Clause 28 of the Agreement. The terms and conditions for the Minimum Guarantee to be applicable are contained in Schedule A of the Agreement at page 38 of the E-Application (Annexure A-1). The relevant clause of the ATS is reproduced below:
“Terms and conditions for Minimum Guarantee and back-to-back (applicable for small vehicles):
1.90% availability of cabs
2.Average 2.5 routes per cab
3.Usage of only fully complaint cab (GPS and panic buttons on the device)
Maximum 5 hours route duration for back-to-back trip”.
It is contended by the Corporate Debtor that the Applicant has failed to meet the aforesaid four conditions for demanding the Minimum Guarantee payment, which requires the Applicant to follow certain pre-conditions before claiming the payment under the Minimum Guarantee Clause.
It is further contended by the Corporate Debtor that the Applicant vide its email dated 03rd December 2018, sent in response to the Respondent’s challenge/dispute to the alleged claim of the Applicant, accepted that the Minimum Guarantee was withdrawn and was effective till 31 July, 2016 and not 1stJuly, 2016. Further, in the said email, the Applicant admits the existence of a dispute in relation to the payment liability/Operational Debt as presently claimed.
It is stated by the Corporate Debtor that the ATS dated 19.11.2015 was further modified by way of three subsequent Addendums executed on 17.07.2017, 22.01.2018 and 04.09.2018 to the Service Agreement dated 19.11.2015. It is added that in above stated addendums, the Schedule A was amended. It is submitted by the Corporate Debtor, that the Applicant has concealed these material facts in its Application.
The Operational Creditor has filed its Rejoinder and Written Submissions and stated that there is no pre-existing dispute between the parties. It is stated that the payment of the Minimum Guarantee was divided into 2 parts i.e., part A, which deals for the services till July 2016 and Part B, which deals with the services for the period from August 2016 till the end.
That as regards to the non-issuance of invoices, it is stated by the Operational Creditor that it was only liable to raise the invoices to exhibit the actual kilometers, which the car actually ran. However, as per the ATS, the Minimum Guarantee was already decided, therefore, the Operational Creditor was under no liability to raise separate invoice(s) towards the Minimum Guarantee, which was already agreed upon between the parties by the Agreement.
With regard to the issue of Limitation, it is stated by the Operational Creditor that in the instant case, the cause of action is a continuous one and, on several occasions, the corporate debtor has admitted the liability towards minimum guarantee and has never denied the existence of the said liability. And the Corporate Debtor vide its email dated 29.11.2018 has even tried to settle the liability by offering Rs.20,58,818/- as one-time full and final settlement which clearly depicts that the CD has acknowledged the existence of debt. amount to the Operational Creditor. Therefore, the limitation is continuing and still subsisting. It has added that the Service Agreement (ATS) between the parties was duly extended mutually, therefore, it is considered to be a running account between the parties which amounts to a continuous cause of action.
That as regards to the not annexing the addendums to the Service Agreement in its application, it is stated by the Operational Creditor that since the said addendums nowhere reflected any change or amendment to the minimum guarantee clause, which was specified in the original agreement entered between the parties, therefore it has not annexed the same with its Application.
It is stated by the Operational Creditor that the Corporate Debtor vide email dated 28.05.2018 placed at page 52 of the e-Application, had itself admitted that a certain amount was due towards the Minimum guarantee, for which it had provided the Operational Creditor with a computation. That in response to the said mail and after the meeting with the Corporate Debtor on 14.08.2018, the Operational Creditor vide email dated 17.08.2018 had supplied the month-wise computation of the entire minimum guarantee (MG) dues till July 2016 to the Corporate Debtor. The scanned copy of the email annexed at page 52 of the e-Application is reproduced overleaf :
That during the course of final hearing held on 02.11.2021, the Operational Creditor has drawn our attention towards the email dated 29.11.2018 to demonstrate that the Corporate Debtor had acknowledged its liability to the extent of Rs.20,58,818/-. The scanned copy of the same is reproduced overleaf :
After hearing submissions, going through the pleadings and written submissions placed on record by both the parties, it is observed from the Affidavit filed by the Operational Creditor under Section 9(3)(b) of IBC 2016 that the Applicant has averred that no notice of dispute has been given by the Respondent/Corporate Debtor. However, during the course of hearing, the Ld. Counsel for the Operational Creditor confirmed that the notice of dispute was received and the same is enclosed at page no. 325 of the Application. Therefore, we are of the view that since the notice of dispute has been annexed by the Applicant with the Application, no prejudice shall be caused to anyone.
We further observe that the issue with regard to the Limitation raised by the Corporate Debtor needs to be examined first.
It is observed from the records that the present e-Application was filed on 06.08.2019. That from perusal of the Application, it is seen that the Applicant has claimed its Operational Debt on the basis of the Service Agreement (ATS) dated 19.11.2015, which was valid for a period of 3 years from 20.04.2015 to 30.04.2018 as per clause 31 of the aforesaid agreement. The scanned copy of the Clause 31 of the Agreement is reproduced overleaf :
Xxxxxxxxxxxx xxxxxxxxx xxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxx
We have already noted that the present claim of the Operational Creditor is arising out of the Minimum Guarantee Clause of the Service Agreement (ATS). Since the claim of the Operational Creditor is solely arising on the basis of the Service Agreement dated 19.11.2015 (which was valid for a period of 3 years from 20.04.2015 to 30.04.2018), without commenting anything on the merits of the dispute so far, we observe that there was a continuous default by the Corporate Debtor till the time the said Service Agreement was in force. Hence, in our considered view, the present e-Application having been filed on 06.08.2019 is well within limitation period of 3 years from the date of expiry of the original Service Agreement (ATS). Therefore, we are of the considered view that the present Application is well within the limitation period.
That another objection taken by the Corporate Debtor is that the Operational Creditor has not annexed any invoice for the debt arising out of the Minimum Guarantee Clause and the same is a violation of Clause 28 of the Agreement.
Per contra, it is stated by the Operational Creditor that it has raised invoices for all other services. However, for the debt arising out of the Minimum Guarantee Clause, no invoices were ever raised as there was no specific condition in the Agreement putting an express obligation on the Applicant to raise such invoice(s) for the debt arising out of the Minimum Guarantee Clause.
That in order to adjudicate whether there was a necessity of raising invoice(s) for the debt arising out of the Minimum Guarantee Clause, it is necessary to have a conjoint reading of Clause 28 and Schedule A of the Agreement. The scanned copy of the same are reproduced below :
xxxxx xxxxx xxxxx xxxxx
xxxx xxxx xxxx xxxx
The contents of the Schedule ‘A’ as annexed to the original agreement (ATS) are given below : xxxx xxxx xxxx xxxx
xxxxx xxxx xxxx xxxx
That from the perusal of Clause 28 of the Agreement, it is observed that the invoices were to be raised for the services rendered by the Applicant to the Corporate Debtor. However, in the case of Minimum Guarantee Clause, no service as such was provided by the Applicant to the Corporate Debtor, it was merely a minimum usage guarantee charge for 7,000 Km/cab/month on cumulative basis, which the Corporate Debtor was required to pay to the Operational Creditor. Further, the Schedule A annexed to the Agreement nowhere stipulates that the Applicant was obligated to raise such invoice(s) towards the Minimum Guarantee Clause.
That we observe that the contractual relationship between the parties herein is clearly established via Service Agreement (ATS) dated 19.11.2015 which was not terminated at any stage. Further, there is no communication relating to the contract period placed on record by the Corporate Debtor either advising or raising objection that the Operational Creditor was to issue invoice for the debt arising out of the Minimum Guarantee Clause. We also observe that at no point of time prior to issuance of the demand notice, the Corporate Debtor has taken a plea to not to make payment against the minimum guarantee clause on the ground of absence of invoice(s). Furthermore, there is no trace of any objection with regard to non-issuance of invoice in the email dated 05.09.2018 sent by the Corporate Debtor to the Operational Creditor with which the calculation sheet with regard to the Minimum Guarantee was sent by it to the Applicant. Hence, we infer that neither there was any insistence by the Corporate Debtor nor practice of raising any invoice(s) against the Minimum Guarantee Clause.
That as regards to not annexing the 3 addendums to the Service Agreement dated 19.11.2015, the Operational Creditor has submitted that since its claim was not materially affected, therefore, it had not annexed the addendums. Per contra, it is stated by the Corporate Debtor that the claim of the Operational Creditor is arising out of the Schedule A of the service agreement, which was amended vide the addendums.
That the Corporate Debtor in its reply has placed on record 3 addendums to the Service Agreement dated 17.07.2017, 22.01.2018 and 04.09.2018. That in order to examine whether the Minimum Guarantee Clause was in existence in spite of execution of the addendums, it is necessary to examine these addendums.
That the scanned copy of the first addendum dated is 17.07.2017 is reproduced overleaf :
xxxx xxxx xxxx xxxx xxxx xxxx
That from the perusal of the addendum dated 17.07.2017, which was valid till 30.04.2018, it is observed that as per Clause 2 of the said addendum, the parties have mutually agreed to revise the Schedule A of the Agreement and replace the same with the revised “Schedule A” as attached with the addendum.
That when we visit the amended Schedule A annexed with the addendum, we find that the Para 1 of the Schedule reads as:
“All other terms except the ones mentioned hereunder shall be as per the original “Schedule A” of the Agreement.”
Thus, from perusal of the amended Schedule A, we observe that except for the rates applicable for diesel and CNG vehicles as specified in the said schedule, all other terms remained valid as per the schedule A of the original agreement (ATS). There is no mention of any change regarding the Minimum Guarantee Clause. Therefore, in our considered view, the Minimum Guarantee Clause as annexed with the original Agreement was in subsistence till 30.04.2018.
That the scanned copy of the Second addendum dated is 22.01.2018 is reproduced below:
xxxx xxxx xxxx xxxx xxxx xxxx
From the second addendum dated 22.01.2018 (supra), which was valid for the period from 01.05.2018 to 30.06.2018, it is observed that the parties mutually agreed to amend the Schedule A. That from perusal of the Amended Schedule A, it is observed that unlike the previous addendum, we do not find any clause as per which the provisions contained in the Schedule A of the original Agreement (ATS) shall remain in existence. Therefore, we find that the Minimum Guarantee Clause stood omitted vide the amended Schedule A added with second addendum dated 22.01.2018, which took effect from 01.05.2018. Hence, we are of the view that the Operational Creditor cannot claim any amount under the Minimum Guarantee Clause beyond 30.04.2018.
That from perusal of the computation sheet provided by the Operational Creditor in its Application, it is observed that it has claimed Operational Debt from September 2015 to December 2018. The scanned copy of the Calculation sheet is reproduced below:
Thus, in sequel to the aforesaid discussion, we find that the Operational Debt claimed by the Applicant, even if it is limited for the period up to 30.04.2018, being above Rs.1 (one) Lakh, the Application survives. Since, all this Adjudicating Authority is required to see is whether there is a debt due and default has occurred. However, while adjudicating the default, the Adjudicating Authority does not have to indulge in determining the extent or details of debt. The moment it is satisfied that the unpaid amount of default is above Rs 1 Lakh or Rs 1 Crore as the case may be, it is bound to admit the application. In the context, we are further strengthened by the law laid down by the Hon’ble Supreme Court in the matter of “Innoventive Industries Ltd. Vs. ICICI Bank and Ors. – (2018) 1 SCC 407”, whereby it is held that :
“The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning non-payment of a debt once it becomes due and payable, which includes non-payment of even part thereof or an installment amount. For the meaning of “debt”, we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a “claim” and for the meaning of “claim”, we have to go back to Section 3(6) which defines “claim” to mean a right to payment even if it is disputed. The Code gets triggered the moment default is of rupees one lakh or more (Section 4). The corporate insolvency resolution process may be triggered by the corporate debtor itself or a financial creditor or operational creditor. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority.”
(Emphasis supplied)
That as regards to the objection relating to the pre-existing dispute, the Corporate Debtor has relied upon the email dated 03.12.2018 sent by the Applicant to the Corporate Debtor stating that the Minimum Guarantee was valid till 31.07.2016. The scanned copy of the same is reproduced below:
When we peruse the email dated 03.12.2018, it is observed that the Applicant has mentioned the following :
“…..Payment dispute to be divided into 2 parts say Part A for the period of service till July 2016 and Part B for the period from August 2016 till date to handle the current issues.
2 - SBT to showcase the losses incurred from August 2016 till date to HCL and form a consensus to resolve the issue at the earliest (12th of June, 2018).
It seems that you are currently addressing the 1st issue only. Please share your thoughts on 2nd issue as well. Also, we request you to make payment of Rs. 81,96,237.00/- on immediate basis so that we can reduce our loss…” From the aforesaid email, it is inferred that the Applicant has rejected the offer of Rs. 20,58,818/- made by the Corporate Debtor vide email dated 29.11.2018 to settle the matter as a full and final settlement. Rather, vide email dated 03.12.2018, the Operational Creditor demanded the payment of Rs 81,96,237.00/- on immediate basis to reduce its loss.
That while discussing about the addendum dated 17.07.2017 which was valid from 20.04.2015 to 30.04.2018, we have already observed that the Minimum Guarantee Clause was subsisting till 30.04.2018. Had the Minimum Guarantee Clause been terminated, the same would have got reflected in the amended Schedule A vide addendum dated 17.07.2017.
Since the contractual relationship between the parties in the instant case is determined through their contract (which in this case has been determined by the original ATS along with the first addendum) and not by emails, therefore, we are of the view that the dispute raised by the Corporate Debtor is moonshine and a patent feeble argument, which is inconsistent with the service agreement (ATS) read with the 1st Addendum.
In the given facts and circumstances, the Operational Creditor has established the default on the part of Corporate Debtor in payment of the operational debt of more than Rs.1,00,000/- (One Lakh). Therefore, the Application is admitted in terms of Section 9(5) of the IBC, 2016. Accordingly, the CIRP is initiated and moratorium is declared in terms of Section 14 of the IBC, 2016. As a necessary consequence of the moratorium in terms of Section 14(1) (a), (b), (c) & (d), the following prohibitions are imposed, which must be followed by all and sundry:
“(a)The institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;
(b)Transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein;
(c)Any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;
(d)The recovery of any property by an owner or lessor, where such property is occupied by or in the possession of the Corporate Debtor.” (IB)-2087/(ND)/2029M/s. Sahaj Bharti
Since there is no IRP proposed by the Operational Creditor, this Bench appoints Mr. Raj Kumar Gupta (IBBI Registration No. IBBI/IPA-002/IP-N00064/2017-18/10142 and Email Id : rkgassociat@gmail .com) as an IRP of the Corporate Debtor with immediate effect from the panel of the IPs recommended by IBBI to this Adjudicating Authority and order that:
“Mr. Raj Kumar Gupta is directed to take charge of the CIRP of the Corporate Debtor with immediate effect.”
“The Court Officer will inform the IRP so appointed by all modes.”
The Operational Creditor is directed to deposit Rs.2,00,000/-(Two Lakh) only with the IRP to meet the immediate expenses. The amount, however, will be subject to adjustment by the Committee of Creditors as accounted for by the Interim Resolution Professional and shall be paid back to the Operational Creditor.
A copy of this Order shall be communicated immediately to the Operational Creditor, the Corporate Debtor and the IRP named above, by the Registry/Court Officer. In addition, a copy of the Order shall also be forwarded by the Registry to IBBI for their record.