JHS Svendgaard Limited Vs HT Media Limited (NCLT Delhi)
NCLT Delhi held that this Adjudicating Authority is not a dispute redressal forum. Accordingly, so long as a dispute truly exists in fact and is not spurious, hypothetical and illusory, the adjudicating authority has to reject the application u/s. 9 of the Insolvency and Bankruptcy Code, 2016
Facts- M/s. JHS Svendgaard Laboratories Limited (`Applicant/Operational Creditor’) has filed the present Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016) read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 with a prayer to initiate the Corporate Insolvency Resolution Process against M/s. HT Media Limited (‘Respondent’).
Conclusion- It is evident that there has been difference of interpretation between the parties in regard to the overall tenure of the Agreement. Hence, in our considered view, the Application has been pursued for a disputed debt. Needless to say, that this Adjudicating Authority is not a dispute redressal forum.
We consider it worthwhile to refer to the Judgement of the Hon’ble Supreme Court passed in the matter of Mobilox Innovations Private Limited Vs Kirusa Software Private Limited in the CIVIL APPEAL NO. 9405 OF 2017. Wherein, it was held that so long as a dispute truly exists in fact and is not spurious, hypothetical and illusory, the adjudicating authority has to reject the application.
FULL TEXT OF THE NCLT JUDGMENT/ORDER
M/s. JHS Svendgaard Laboratories Limited (for brevity, the `Applicant/Operational Creditor’) has filed the present Petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (for brevity, the `IBC, 2016′) read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 with a prayer to initiate the Corporate Insolvency Resolution Process against M/s. HT Media Limited (for brevity, the ‘Respondent’).
2. The Respondent namely, M/s. HT Media Limited is a Company incorporated on 03.12.2002 with CIN L22121DL2002PLC117874 under the provisions of the erstwhile Companies Act, 1956, having its registered office situated at 18-20, Kasturba Gandhi Marg, New Delhi-110001, which is within the territorial jurisdiction of this Tribunal. The Authorized Share Capital of the Respondent is Rs.72,50,00,000/- and Paid-up Share Capital is Rs.46,54,96,628/- as per its Master Data.
3. It is stated that the Applicant and the Respondent entered into an Advertising Agreement dated 25.01.2017 (the “Agreement”), as per which the Applicant made a security deposit/advance payment of Rs. 8,00,00,000/- (Rupees Eight Crores Only) vide NEFT bank transfer to the Corporate Debtor, which was to be utilized towards the supply of advertisement services from the Respondent. The Agreement was originally valid for a term of 5 years, which was to lapse on 25.01.2022.
4. It is further stated that vide written communications dated 21.11.2017, 21.06.2018 and 03.07.2018, the Applicant and the Respondent agreed to extend the term of the Agreement by a period of 6 months + 6 months i.e., by a total period of 1 year. Consequently, the term of the Agreement was to lapse on 25.01.2023.
5. It is submitted that the Applicant utilized the advertisement services of the Respondent from January 2017 to January 2019, for which an amount of Rs.2,61,11,134/- was adjusted from the aforesaid Security Deposit by the Respondent. However, due to various reasons, including but not limited to commercial concerns arising out of the Covid-19 pandemic, the Applicant did not opt to utilize the advertisement services of the Respondent from January 2019 to January 2022. Sometime around May/ June 2021, the Applicant made a request to the Respondent to further extend the term of the Agreement by an additional period of one year i.e., in total extending the term period by two years, up to 25.01.2024. It is further submitted that vide email dated 15.01.2022, the Respondent shared a detailed Statement of Account between the parties as of December 2021, whereby the Respondent categorically admitted that a balance amount of Rs.5,38,88,866/- from the Security Deposit was lying with the Respondent.
6. It is further submitted that the Respondent and Applicant held a meeting on 17.01.2022 to discuss the further extension of the Agreement, wherein the Respondent not only refused to extend the term period of the Agreement, but also stated that the Agreement would stand terminated with effect from 25.01.2022, i.e., prior to the agreed date of termination. Consequently, the Applicant opposed such arbitrary purported termination of the Agreement and informed the Respondent that if the Respondent were to terminate the Agreement on 25.01.2022, it would become liable to immediately return the Balance Security Deposit to the Applicant.
7. The particulars of the Debt claimed including the total amount of default and the date of default are mentioned in Part IV of the application, which is reproduced below, for the sake of convenience:
Part IV
