AVON Capital Vs. Tattva & Mittal Lifespaces Pvt. Ltd. [Company Appeal (AT) (Insolvency) 256 of 2017] - Synopsis
Team SoOLEGAL 4 Mar 2021
In this case, AVON Capital Vs. Tattva & Mittal Lifespaces Pvt. Ltd. [Company Appeal (AT) (Insolvency) 256 of 2017], the 'Corporate Debtor' hired the appellant to provide services in lieu of which the retention fee was due, separate payments for consulting and ancillary services were due upon receipt of the term-sheet by the investor. The appellant was therefore entitled to a succession fee after the funds had been remitted to the appellant's accounts by the parties. The respondent had submitted that the mere production of invoices would not mean that the appellant had given the services to the respondent. Dispute raised after Demand notice issued under the Code.

The dispute over fictitious facts and circumstances, when responding to the demand notice, cannot be considered as an 'existence of dispute' to refuse the application under Section 9 of the Insolvency Bankruptcy Code, 2016. In the absence of any proof relating to a pre-existing dispute, that is prior to the issuance of a notice dated 14th January 2017 pursuant to Section 8(1) of the Insolvency Bankruptcy Code, 2016, it was held that no dispute existed. Furthermore, in the light of the letter of commitment and the terms and conditions of that commitment, it was held that the appellant falls within the meaning of 'Operational Creditor' as specified in Section 5 of the Code. According to the Bench, there was a 'debt' on the part of the appellant and, in absence of any proof of payment, the order was set aside and referred the case back to the Adjudicating Authority, Mumbai Bench, to accept the application and to issue a proper order in the presence of the parties.

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