CAPITAL PARTNERS Vs. RELIANCE DEFENCE & ENGINEERING LTD

JUDGEMENT

(1.) M/S. Capital Partners filed this petition under section 9 of. The Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "the Code") read with Rule 4 of The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as "the Rules") seeking reliefs under Section 9 and 13 of the Code.

(2.) It is the case of the petitioner that, M/s. Capital Partners was engaged as advisor by the respondent company (then Pipavav Defence and Offshore Engineering Company Ltd.) on the terms and conditions as contained under the contract dated 30th November, 2011. The said contract was amended on 1st December, 2011 and again on 1st May, 2012 respectively. The scope of the services as set forth in the contract was required to be performed solely by Mr. Sunil Tandon being a partner of M/s. Capital Partners. Duration of the contract was for a period of five years with effect from 1st December, 2011. As per the contract dated 30.11.2011 the respondent company was required to pay advisory fees of Rs. 1.00 crore per annum to M/s. Capital Partners. As per the agreement dated 01.12.2011, M/s. Capital Partners was entitled to a bonus of Rs. 1.00 crore and upon successful implementation of the initiative, M/s. Capital Partners is entitled for bonus of Rs. 1.00 crore. As per the amended contract dated 01.05.2012, Mr. Sunil Tandon was designated as a Principal Advisor and monthly fee was increased to Rs. 13.00 lacs and M/s. Capital Partners were entitled for a fee of Rs. 2.00 crores on completion of the BCG assignment. It was further agreed upon between the parties that, in case of a conflict in the terms and conditions as envisaged in the letter dated 01.05.2012 shall prevail.

(3.) According to the petitioner, in June 2012 the BCG was successfully completed and as per letter dated 01.05.2012 the respondent company was obligated to pay an amount of Rs. 2.00 crores plus applicable service tax. During the period of June, 2012 till February 2015, requisite services were rendered to the company in accordance with the terms and conditions of the contract. On the request of the respondent company, although the BCG assignment was completed in June. 2012, M/s. Capital Partners did not raise any invoice. Ultimately, on 31.03.2015 invoice of Rs. 2,24,72,000/- was sent to the respondent company in respect of fees payable by the respondent company vis--vis BCG assignment. Invoice was received by the respondent company without any demur or protest. Mr. Sunil Tandon resigned from the company with effect from 01.07.2015 and the same was accepted by the company by its letter dated 15.06.2015. On 25.06.2015, the respondent company terminated the contract on the request of Mr. Sunil Tandon with effect from 30.06.2015. Mr. Sunil Tandon sent reminders to settle accounts of M/s. Capital Partners immediately after his resignation, by way of emails dated 28.05.2015 and 22.06.2015. The respondent company by email dated 29.06.2015 stated that the balance outstanding owed by the company till 31.05.2015 is Rs. 8,09,346/- and for the month June 2015 is Rs. 13,30,680/- and other amount payable by the company is Rs. 2,04,72,000/-. Aggregate amount payable by the respondent company to M/s. Capital Partners as on 29.06.2015 is Rs. 2,26,12,026/- only. Again, on 08.10.2015, Mr. Sunil Tandon called upon the company to make payments of the outstanding amount of Rs. 2,04,00,000/-. In fact, the amount due was Rs. 2,26,12,026/- Accordingly another email dated 08.10.2015 was sent to the company by Mr. Sunil Tandon followed by reminder email dated 12.10.2015. On 18.01.2016, Accounts & Finance Department of the respondent company handed over a copy of the ledger of the company for the period from 01.04.2015 till 18.01.2016 which clearly reflects that as on 18.01.2016 an amount of Rs. 2,26,04,778/- is payable to the petitioner by the respondent company. Thereafter also email reminders were sent by Mr. Sunil Tandon on 14.03.2016 and 09.06.2016 to CEO of the respondent company. M/s. Capital. Partners and Mr. Sunil Tandon, by way of legal notice dated 13.10.2016 through advocate called upon the company to pay the outstanding amount. On 02.11.2016, M/s. Capital Partners and Mr. Sunil Tandon forwarded relevant documents to the company. The company by letter dated 02.11.2016 denied the liability and raised ill-founded allegations. Thereafter, on 04.02.2017, M/s. Capital Partners and Mr. Sunil Tandon through advocate served demand notice on the respondent company calling upon the company to pay outstanding amount. The company, by reply dated 16.02.2017 styled as a notice of dispute made false allegations without substantiating the same. According to the petition, the respondent company is admittedly liable to make payment of outstanding amount but it has chosen not to make payment. Hence this petition is filed before this Tribunal on 12th May, 2015 after serving copy on the Corporate Debtor.