Talbot & Company Vs Austin Distributers Pvt. Ltd. (NCLAT Delhi)
Summary: NCLAT Delhi dismissed the appeal filed by Talbot & Company, an Operational Creditor providing security services to Austin Distributors Private Limited, and upheld the NCLT Kolkata Bench order rejecting its application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process.
The Operational Creditor had supplied security guards pursuant to a work order dated 30.09.2015 and claimed Rs.8,17,678.54 with interest of Rs.1,46,052/-. After alleged non-payment of invoices, it issued a demand notice under Section 8 on 26.07.2019. The Operational Creditor relied particularly on an email dated 21.05.2019 in which the Corporate Debtor referred to outstanding amounts and stated that poor market conditions had affected collections and that dues would be cleared gradually.
The Corporate Debtor disputed the authenticity and authority behind that email and contended that serious disputes concerning deficient security services had existed since 2016. These included allegations of theft, property damage, irregular attendance and deployment of unethical security personnel. NCLAT noted that contemporaneous emails dated 26.02.2016, 10.11.2017, 02.10.2018, 12.03.2019 and 14.03.2019 showed that service-related disputes had been raised well before the Section 8 demand notice. The Operational Creditor had itself admitted certain deficiencies in communications dated 27.02.2016 and 29.08.2018.
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