George Vinci Thomas vs Capedge Consulting Pvt. Ltd. & Ors

[Arising out of Order dated 25th October, 2019 passed by the Adjudicating Authority (National Company Law Tribunal) Kochi Bench, Kochi in TIBA/14/KOB/19]

IN THE MATTER OF: George Vinci Thomas, S/o M.V. Thomy R/o 26/507A, Yatch Club Enclave, Konthuruthy, Thevara P.P. Kochi - 682013, Kerala. .....Appellant

Vs. 1.M/s. Capedge Consulting Pvt. Ltd. CIN: U93000TN2013TC0921 89, through its director Mr. Jacob Karukaparambil Thomas, No. 4 Joiser Street, Nungambakkam, Chennai - 600 034, Tamilnadu.

2.M/s. India Tech Private Limited, CIN: U51103KL1983 PLC003770, 60/2177B, Pattathil House, K.P Vallon Road, Kadavanthara, Ernakulam, Kochi - 682 020 Kerala.

3. Mr. Sasitharan Ramaswamy Resolution Professional M/s India Tech Private Limited, 60/2177B, Pattathil House, K.P. Vallon Road, Kadavanthara, Ernakulam, Kochi - 682 020, Kerala. ......Respondents

Company Appeal (AT) (Insolvency)No. 1395 of 2019 1 Present :

For Appellant: Mr. Harshad V.Hameed, Advocate

For Respondents: Mr. Avrojyoti Chatterjee, Mr. Rajiv S.Roy, Mr. Udayan Agarwal, Ms. Jayasree Saha, Advocates

16.03.2020 - Heard Learned Counsel for Appellant and Counsel for

Respondent No. 1 ('Operational Creditor'). Respondent No. 1 'M/s. Capedge

Consulting Pvt. Ltd.' ('Operational Creditor') filed an application u/s 9 of the

Insolvency & Bankruptcy Code, 2016 ('I&B' Code, for short) against Respondent

No. 2 'M/s India Techs Private Ltd.' ('Corporate Debtor') before Adjudicating

Authority ('National Company Law Tribunal' Kochi Bench) TIBA/14/KOB/19.

Appellant claims to be the Managing Director of the 'Corporate Debtor' and has

filed this appeal as the application u/s 9 came to be admitted vide Impugned

Order dated 25.10.19.

2. The 'Operational Creditor' filed the application through its Director Jacob

K. Thomas. The application claimed that the 'Operational Creditor' was in the

business of providing consultancy services to establishments for improving their

productivity by restructuring and re-organising their financial, administrative

and operational systems. It was claimed that the 'Corporate Debtor' is in the

Company Appeal (AT) (Insolvency)No. 1395 of 2019 2 business of dealing in services of construction equipments. The 'Operational

Creditor' claimed that the 'Corporate Debtor' had suffered huge losses and

engaged the 'Corporate Debtor' in November, 2015 to render assistance in

resolving issues. The 'Operational Creditor' entered into four consultancy

agreements with the 'Corporate Debtor'. It was claimed that the 'debt' arose on

account of dues of supply of services rendered between 1st March, 2013 and 3rd

February, 2019.

3. It is the case of 'Operational Creditor' that Demand Notice dated 11.2.2019

was sent for unpaid operational debt to the extent of Rs. 1,71,74,366/-. The

'Operational Creditor' claimed that there was no reply to the notice.

4. The 'Corporate Debtor' appeared before the Adjudicating Authority and the

case put up by the 'Corporate Debtor' is that the service of 'Operational Creditor'

were indeed taken by the 'Corporate Debtor' by way of the agreements which are

claimed to be executed, but that there was an existing dispute.

5. It is the case that the Jacob K. Thomas of 'Operational Creditor was

Managing Director in yet another Company, ' M/s. Capedge Metals & Minerals

Pvt. Ltd.' and also one 'M/s. Capedge Energy Pvt. Ltd.'. It is argued by the

Learned Counsel for the Appellant making reference to the agreement at

Annexure A6(P-74) that one other Company 'M/s. Telsa Marketing Pvt. Ltd.' and

' M/s. Capedge Metals & Minerals Pvt. Ltd.' had entered into agreement whereby

Jacob K. Thomas took loan from that sister concern. It is stated that Mrs.

Elizabeth Thomas shown in the document as Managing Director of 'M/s. Telsa

Company Appeal (AT) (Insolvency)No. 1395 of 2019 3 Marketing Pvt. Ltd.' in Annexure A6 is also Managing Director in 'Corporate

Debtor'.

6. Learned Counsel for Appellant submits that because of this transaction

with the sister concern, a confusion has got created between 'Operational

Creditor' and 'Corporate Debtor' on one side and the other Company 'M/s. Telsa

Marketing Pvt. Ltd.' and ' M/s. Capedge Metals & Minerals Pvt. Ltd.' Counsel

states that 'M/s. Telsa Marketing Pvt. Ltd.' had also filed one complaint u/s 138

of Negotiable Instrument Act against 'M/s. Capedge Energy Pvt. Ltd.' copy of

which is at Annexure A13 and another complaint against ' M/s. Capedge Metals

& Minerals Pvt. Ltd.' which is at page - 102 of the paper book. Learned Counsel

for the Appellant fairly states that these criminal complaints are not directly

connected with the present parties but it shows foundation on the basis of which

the 'Corporate Debtor' is claiming that there was existence of dispute.

7. Learned Counsel referred to e-mail dated 4.6.18 (Annexure A12)(p-97) to

show that there was an existence of dispute. The e-mail was sent by 'Operational

Creditor' to the 'Corporate Debtor' and copy was sent to 'M/s. Telsa Marketing

Pvt. Ltd.' also. The e-mail reads as under:-

"Dear Vinci/Elizabeth

Good Day

Basis our discussions and meetings on various

occasions including yesterday's meeting to conclude

Company Appeal (AT) (Insolvency)No. 1395 of 2019 4 on an amicable settlement, we have decided to put

across the settlement proposal together with the

attached statement and settlement calculations for

your review and confirmation.

Further once the settlement amounts are agreed, a

settlement agreement to recap all the requirements to

be translated into a settlement agreement to effect the

same and the modus operandi of the accounting

requirements, right off and payment will need to be

discussed and agreed between all parties.

Since we have decided that all parties are not

intending for any legal disputes, we request that the

bounced cheques are returned to me tomorrow when

we meet to agree on the settlement proposal.

Regards Jacob"

8. When the e-mail was read out to us, we expressed to the Learned Counsel

that the e.mail at the most indicates regarding some disputes but does not

disclose what is the dispute. For the purpose of Section 9, the relevant would be

whether there was dispute regarding the quality of services rendered as the

present matter relates to services rendered.

Company Appeal (AT) (Insolvency)No. 1395 of 2019 5

9. Learned Counsel then referred to us the e.mail dated 21.1.18 (p-90)

Annexure A8 which was sent by the 'Corporate Debtor' to the 'Operational

Creditor'. Learned Counsel referred to this e.mail stating that the 'Corporate

Debtor' had asked the 'Operational Creditor' to submit report regarding the India

Techs Assets and it is submitted by the Counsel that mere sending invoices is not

enough in the given agreements and submitting of report would also be necessary

and such dispute was raised.

10. Learned Counsel for Respondent, however, has referred to 'Memorandum

of Agreement' between parties as at Annexure A-2 (p-36). Learned Counsel

referred to 'MOU' dated 15.11.2015 and took us to Clause 9 which stated that

the professional fees would take the form of a combination of retainer fees and

success based fees. It is argued that there was fixed retainer fees of Rs. 2 lacs

per month while rest of the payments relied on success to be achieved.

11. The Learned Counsel for Respondent No.1 then took us back to the e.mail

dated 21.1.18 (Annexure A8) to make further submissions. It would be

appropriate to reproduce the concerned portions from the e-mail dated 21.1.18

(pg-90,91).

"Dear Jacob,

At the outset I reiterate that I have always

informed you (and that was the understanding) that

whatever payments that Capedge was to receive from

Company Appeal (AT) (Insolvency)No. 1395 of 2019 6 India Tech would have to be from the money left over

with India Techs after Capedge arranged for the sale of

India Techs assets and negotiated with India Techs

creditors. India Techs has no money in its coffers - not

then and not now- and you were aware of that from the

very start. - - - - - - - - - - (1) What are Capedge's

achievements and results so far regarding the India

Techs project?

From the 1st payment in 2015 on 23/11 and 23/12 of

Rs 78,375/- and Rs 350,000/-, and on 28/06/2016 of

Rs 618,300/- and both in November 2016 when India

Techs renewed the agreement and later in Aug 1st and

23rd India Techs paid Capedge Rs. 14,65,000/-, I had

requested you to submit reports about the progress of

the project and results achieved. You have not, to date,

submitted even one report on the India Techs Project in

spite of having 2 Junior Consultants who were

appointed to work full time on the India Techs project."

12. Referring to this para of the e.mail, the Learned Counsel submitted that the

reference to sale of India Techs Assets is portion which relates to success fee, and

report in that context. According to the Counsel if the 'Operational Creditor'

succeeds in the effort, he gets the success fee. By reference to such portion, the

Company Appeal (AT) (Insolvency)No. 1395 of 2019 7 Appellant cannot state that there is existence of dispute. Alternatively, it is

argued that the Agreements entered into have similar clauses. It is argued that

the retainer fee would still be applicable in all the agreements which are entered

between the parties and the 'debt' due in major portion is relating to non-payment

of retainer fees regarding which there is no dispute and which itself is more than

Rs. 1 lakh.

13. We have gone through the Impugned Order where it has dealt with this

e.mail dated 21.1.18. Para 18 and 20 of the Impugned order read as under:-

"18. The Corporate Debtor had placed reliance on

the letter dated 21st January, 2018 written by them

to hold that there is an existence of dispute.

However, on perusal of the email communication,

we found that the corporate debtor is merely asking

for further information on the services rendered by

the operational creditor for each of the invoices

raised. Can this be considered as pre-existing

dispute is the moot questions.

20. Thereby, on perusal of records, it is clear that

the Respondent Corporate Debtor has not raised

any dispute relating to debt nor raised any dispute

relating to quality of service of goods. They merely

sought information regarding the services provided,

Company Appeal (AT) (Insolvency)No. 1395 of 2019 8 which cannot be termed as pre-existing dispute or

plausible dispute. Further, the cheque bounce case

of Telsa Marketing Pvt. Ltd. is not between the

'Operational Creditor' and the 'Corporate Debtor' but

between some other parties which cannot be taken

into consideration in the instant case."

14. We find ourselves in the agreement with the Adjudicating Authority for

these and other reasons recorded and we do not find that the 'Corporate Debtor'

is able to show "dispute" with regard to quality of services rendered and thus we

do not find any reason to interfere in the Impugned Order.

There is no substance in the appeal, the appeal is accordingly dismissed.

No costs.

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

[V.P. Singh] Member (Technical)

[Alok Srivastava] Member (Technical)

ss/m Company Appeal (AT) (Insolvency)No. 1395 of 2019 9