# In the matter of Hungama Digital Media Entertainment Private Limited CP (IB) 1196-MB-C-II-2017

> NCLT judgment dated 2020-06-24. Citation: TCN-2020-NCLT-01120. Embee Software Private Limited, the Operational Creditor, filed a petition under Section 9 of…

- **Court:** NCLT
- **Order date:** 24 Jun 2020
- **Citation:** TCN-2020-NCLT-01120
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/hungama-digital-media-entertainment-private-limited-cp-ib-1196-mb-c-ii-2017-1999cff6

## Summary

### Background

Embee Software Private Limited, the Operational Creditor, filed a petition under Section 9 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Hungama Digital Media Entertainment Private Limited, the Corporate Debtor. The petition arose from a dispute over Microsoft Azure licenses. Microsoft approached Hungama in December 2013 to migrate its website to the Microsoft Azure platform. Microsoft appointed Mactore to develop the website, but the development was unsuccessful, leading to over-usage of Azure credits. Hungama argued that the over-usage was due to Mactore's failure and that Microsoft should bear the cost. Embee, as a reseller of Microsoft Azure, claimed outstanding payments for the Azure licenses.

## Facts

Embee Software Private Limited, an operational creditor, filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016, against Hungama Digital Media Entertainment Private Limited, a corporate debtor, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The dispute arose from the supply and usage of Microsoft Azure licenses. In December 2013, Microsoft approached Hungama to migrate its website to the Microsoft Azure platform. Microsoft introduced Mactore to develop the website. Hungama subscribed to Microsoft Azure service for hosting the new website. Mactore's development of the website was unsuccessful, leading to over-usage of Azure credits. Hungama argued that the over-usage was due to Mactore's failure and that Microsoft should

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## Issues and analysis

### Issue 1: Whether the petition filed by Embee Software Private Limited under Section 9 of the IBC for …

**Ratio:** The petition under Section 9 of the IBC can be dismissed if the claims of the Operational

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**Reasoning:** The court reasoned that the claims of the Operational Creditor were disputed by the

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**Interpretation:** Section 9 of the IBC allows an operational creditor to initiate CIRP against a

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**Application:** In this case, the court found that there was a pre-existing dispute between

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## Parties

- **Judges:** SUCHITRA KANUPARTH…; Chandra Bha…; +1 more
- **Appellants:** Embee Software…
- **Respondents:** Hungama Digital…

## Timeline

- **2013-12-01 — Microsoft approaches…**: Microsoft approached Hungama to migrate its…
- **2014-11-22 — Hungama informs…**: Hungama informed Microsoft about its…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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