Fairwood Infra & Services Pvt. Ltd vs Wave Megacity Centre Pvt Ltd

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI Company Appeal(AT)(Insolvency)No. 779 of 2019 IN THE MATTER OF: M/s Fairwood Infra & Services Pvt. Ltd. ...Appellant Vs M/s Wave Megacity Centre Pvt. Ltd. ....Respondent Present: For Appellant: Mr. Ujjwal Jha, Advocate

For Respondent: Mr. Sudhanshu Batra, Sr. Advocate along with Mr. Aman Nandrajou, Ms. Aarzoon Aneja, Ms. Suditi Batra, Mr. Sumeer Sodhi and Mr. Aditya Mishra, Advocates.

ORDER

16.01.2020 This appeal has been filed by the Appellant- Operational

Creditor against Respondent-Corporate Debtor in view of the order passed by the

Adjudicating Authority (NCLT, New Delhi- Bench No. 3) dismissing CP. IB-

406/(ND)/2018 which was filed under Section 9 of Insolvency and Bankruptcy

Code, 2016 (in short IBC). The Impugned Order is dated 14.06.2019.

2. The Appellant claims that Section 9 Application was required to be filed as

Appellant rendered Project Management Consultancy services and there were

unpaid invoices which were raised in accordance with contract/agreement

between the parties executed on 09.09.2015. The project could not proceed

further due to financial constraints of the Respondent and the Appellant had

made claim of contractual dues and demand was raised for Rs. 1,51,54,735/-.

It is stated, the Respondent made false claim of Rs. 32 lakhs in e-mail dated

16.12.2016. The Respondent grossly mis-calculated contractual term as the

claim was made on the basis of per Square feet, which term on plain reading

provided to upper limit or providing the cap on final payment. The Appellant

Company Appeal(At)(Insolvency) No. 779 of 2019 Page 1 of 4 claims that the clause 10.1.1 of the Agreement (Page 58) was never meant to be

mode of calculation. It was patently wrong on the part of the Respondent when

the claims were calculated as seen in the e-mail dated 16.12.2016 (page 201).

The Appellant claims and it is argued that the payments were invoice based and

all the invoices in which claim is based are admitted. Earlier accepted and paid

invoices could not be undone by erroneous calculation and the reasoning of

calculation of per square feet basis which was raised by the Respondent for the

first time in its e-mail dated 16.12.2016 was rejected by mail dated 08.02.2017.

It is further argued by the learned Counsel for the Appellant that in spite of

notices sent in 2017, Respondent did not comply and did not make payments

and thus Section 8 notice dated 21.12.2018 (page - 274) was sent to which the

Respondent gave reply (page- 282) on 13.03.2018 that it was invoking

arbitration.

3. Learned Counsel for the Respondent is opposing the claims made by the

Appellant- Operation Creditor. It is stated that Agreement Clause 10.1.9 had laid

down the manner of payment of fees and considering the said clause, the

Respondent had done the calculation and claimed that it had to recover money

from the Appellant and for this purpose the e-mail dated 16.12.2016 was sent

as can be seen at page 201.

4. We have gone through the record and Impugned Order and we have heard

learned Counsel for both the sides. The e-mail dated 16.12.2016 sent by

Corporate Debtor reads as under:

"All of your statements made in the trailing mail are

unacceptable to us since the same are not in

Company Appeal(At)(Insolvency) No. 779 of 2019 Page 2 of 4 conformation of the contract which was signed by both

the parties unconditionally and the same being the

entire agreement, no discussion or communication out

of the agreement stand valid. As per contract, you were

responsible to review the progress of the work

assigned to you and suggest the corrective measures

including reviewing the manpower deployed by you.

We would like to draw your attention to our request

to you in the same meeting as referred by you, to

calculate your fees based on actual Built Up area

constructed under your tenure as per contractual

provisions but the same has not been done by you till

date. Now to expedite settlement we have calculated

your dues in accordance with the contractual

provisions i.e. on BUA basis and the same has been

elaborated in the attached sheet. All recoveries as per

contractual provisions are also shown clearly and the

net amount payable /recoverable to/from Fairwood

mentioned in your sheet.

In order to sign a MFA we would like to have

meeting which can be fixed mutually in coming weeks."

The e-mail then has a chart giving particulars, which the Respondent

claimed, were to be recovered from the Appellant and calculated the same to the

extent of Rs. 32,82,404/-.

Company Appeal(At)(Insolvency) No. 779 of 2019 Page 3 of 4

5. Learned Counsel for the Respondent is submitting that even Arbitration

Award has been passed in favour of the Respondent and proceeding as per

Section 34 Application is pending. It is stated that the Award has been passed

which has stayed in the Section 34 Application under The Arbitration and

Conciliation Act, 1996.

6. Going through the records and the e-mail reproduced above which was

admittedly sent much before Section 8 Notice, it is apparent that there is pre-

existing dispute.

7. When this is so, the Adjudicating Authority rightly did not interfere

considering the averments made by the parties and the rejection of Section 9

Application could not be faulted with. There is no substance in the Appeal.

8. The Appeal is dismissed. No orders as to costs.

[Justice A.I.S. Cheema] Member (Judicial)

(Kanthi Narahari) Member(Technical)

Akc/GC

Company Appeal(At)(Insolvency) No. 779 of 2019 Page 4 of 4