B N K Securities Private Limited vs Sebacic India Limited

IN THE MATTER OF: BNK Securities Pvt. Ltd. ...Appellant

Versus Sebacic India Ltd. ...Respondent

Present: For Appellant : Mr. Lzafeer Ahmad, Advocate.

For Respondent : -

ORDER

22.03.2023: This appeal has been filed against an order dated

11.01.2023 by the Adjudicating Authority (NCLT Ahmedabad) by which the

application filed under Section 9 of IBC of the Appellant has been rejected on

the ground of pre-existing dispute. The Appellant claimed that he has an

agreement with the Corporate Debtor for Success Fee and after the

performance of his part, the Appellant issued an invoice to the Corporate

Debtor. However, no payment was made and hence Notice under Section 8 of

IBC was issued on 18.02.2019 and thereafter Section 9 Application was filed.

2. Corporate Debtor after receiving Section 8 Notice immediately replied on

28.02.2019 and refuted the claim of the Appellant. Subsequently, Section 9

application was filed which was dismissed.

3. Learned Counsel for the Appellant submits that since the Appellant has

performed his part, hence he is entitled to Success/Brokerage Fee and

Adjudicating Authority has committed error in rejecting the application.

4. We have heard the submissions of the learned Counsel for the Appellant

and perused the records. Reply under Section 8 Notice has been brought at

page 96 of the appeal. The Reply to the Notice indicates that the Corporate

Debtor had refuted the claim of the Appellant and made various allegations

including the allegations made in paragrapahs-8,9 & 10 which read as follows:

..

"8. Our Client states that an Investment Agreement was entered on December 28, 2018 into by and between (i) INRF, (ii) another investor i.e., Avalokiteshvar Valinv Limited, (iii) Our Client, (iv) the promoters of Our Client, (v) Wayzata III Indian Ocean Limited and (vi) GVFL Trustee Company Private Limited. Subsequently, inter-alia, INRF alongwith another investor have successfully invested the First Tranche without any assistance from your client.

9. Pursuant to the aforesaid First Tranche of invest, your client had raised an unsigned invoice (Annexure G to the Demand Notice) dated January 2, 2019; hearing invoice no. MBD 2 for a total amount of Rs. 26,55,0000 (Rupees twenty six lakhs fifty five thousand). The description as set out in the said invoice is "Being part Payment of Brokerage Fees for introducing fund infusion from M/s India Nivesh Fund" against which your client has charged Rs. 22,50,000/- (Rupees

Company Appeal (AT)(Insolvency) No. 335 of 2023 & I.A. No. 1117 of 2023 Page 2 of 4 Twenty Two lakhs and fifty thousand) as alleged brokerage fees plus 18% GST. As a matter of record, there is no mention of any part brokerage fee payable under the Mandate Letter.

10. Our Clients state that despite being aware of the fact that your client has not complied with the obligation under the Mandate Letter, your client has raised the aforesaid unsigned invoice. Therefore, the response to your client's invoice. Our Clients have already on January 12, 2019 addressed an interim Dispute Letter (Annexure H to the Demand Notice) to your client, clearly bringing out the breaches committed by your client under the Mandate Letter and has rightly rejected the invoice by extensively setting out the instances of not providing the services as expected from your client as per the Mandate Letter. Our Clients state that your client has not replied to Our Client's Interim Dispute Letter till date which only goes to show the existence of disputes between parties and further that the undersigned invoice is not due and payable."

..

5. Very claim of the Appellant was disputed by the Corporate Debtor and

Corporate Debtor has mentioned that the Invoice which was issued by the

Appellant was rejected by the Corporate Debtor.

6. We find that there was a pre-existing dispute and Adjudicating Authority

did not commit any error in rejecting Section 9 Application. IBC proceeding

cannot be used for recovery of Success Fee/Brokerage Fee as in the present

Company Appeal (AT)(Insolvency) No. 335 of 2023 & I.A. No. 1117 of 2023 Page 3 of 4 case where the Corporate Debtor denies the claim of the Appellant by giving

notice of disputes to the Appellant.

6. We see no reason to entertain the appeal. Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Mr. Barun Mitra] Member (Technical) akc/nn

Company Appeal (AT)(Insolvency) No. 335 of 2023 & I.A. No. 1117 of 2023 Page 4 of 4