The failure to provide a No Objection Certificate (NOC) constitutes a genuine pre-existing dispute, justifying the dismissal of an application under Section 9 of the Insolvency and Bankruptcy Code, 2016.

J U D G M E N T

(Hybrid Mode)

[Per: Ajai Das Mehrotra, Member (Technical)]

This appeal has been filed by the Appellant- Law & Kenneth Saatchi &

Saatchi Private Limited (hereinafter called the ‘Operational Creditor’ or ‘OC’) against the order dated 30.05.2023 passed by the National Company Law Tribunal, Allahabad in C.P. (IB) No. 24/ALD/2022, wherein application of the Appellant under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter called the ‘IBC, 2016’) was dismissed.

2. The brief facts of the case are that the Appellant- Operational Creditor had undertaken to provide services for production of Television Commercial (hereinafter called the ‘TVC’), print shoot and digital content for the Respondent -Patanjali Paridhan Private Limited (hereinafter called the ‘Corporate Debtor’

or ‘ÇD’) under the terms of proforma invoice dated 17.10.2018.

3. It is the submission of the Operational Creditor that it had rendered services to the complete satisfaction of the Corporate Debtor and had raised final invoice on 29.01.2019 for sum of Rs. 2,06,50,000/-, out of which advance of Rs/ 87,50,000/- was already received by the Operational Creditor on 26.10.2018 and the balance amount of Rs. 1,19,00000/- was payable by the Corporate Debtor.

4. It is the submission of the Appellant that it had reminded the Corporate Debtor on multiple occasions including emails dated 13.04.2019, 16.04.2019, 25.04.2019, 26.04.2019, 02.05.2019, 03.05.2019, 08.05.2019, 09.05.2019 and as no payment was forthcoming, the Operational Creditor issued notice under Section 8 of the IBC on 12.03.2021 which was duly served on the Corporate Debtor on 15.03.2021. Since no payment was forthcoming from the Corporate Debtor, the Appellant had filed application under Section 9 of the IBC, 2016 before the Ld. NCLT which was dismissed by impugned order dated 30.05.2023. 5. Admittedly, there was no separate written agreement or contract for supply of the said TVC. To understand the controversy in this appeal, one requires to see the content of proforma invoice dated 17.10.2018 issued by the Operational Creditor which lists 32 terms and conditions, presumably agreed between the Operational Creditor and the Corporate Debtor. As per the proforma invoice, the payment terms included 50% advance and balance 50% on delivery of the master TVC. The relevant terms and conditions stated in the proforma invoice are at Sl. No. 5, 6, 23 and 26 which are reproduced below for benevolent reference:

“5. 50% advance on total cost of master production payable

10 days prior to the shoot.

6. Balance against the delivery of the master TVC.

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23. The final TVC and the other material provided by LKSS will not violate or infringe any third-party proprietary rights or IPR of any nature whatsoever including any act, rule or regulation for the time being in force or as may be notified by the government from time to time and to that extent LKSS agree to indemnify and hold Client harmless against any claim, demand, action, investigation or other proceeding (’Claim") including but not limited to all damages, losses, liabilities, judgments, costs and expenses in relation thereto.

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26. Files will be handed over in digital format only. Client will be free to make the registration under any of the Intellectual Property Rights Acts. LKSS or Producer will provide the necessary NOC or any other paper which may require for the IP registration to the Client.”

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6. It is the admitted fact by both the sides that No Objection Certificate (hereinafter called the ‘NOC’) as per the terms and conditions No. 26 was not provided by the Operational Creditor. It is submitted by the Learned Counsel for the Corporate Debtor that through emails dated 07.05.2019 and 05.06.2019 the Corporate Debtor had specifically asked for NOC of the Operational Creditor. These emails are annexed at pages 163 and 165 of the Appeal Paper Book. It is the submission of the Learned Counsel for the Corporate Debtor that through letter dated 08.09.20