BY POST

BY E-MAIL

REF: ARV / LN / 22-23 / 93

19.01.2023

To,
Guarantors Infrastructure Pvt Ltd.
87, Ground Floor,
Khirkee Village, Malviya Nagar,
New Delhi – 110017
India
Email: guarantors@guarantors.in
Kind Attention: Mr. Kuldeep Rana, Director

Respected Sir,
Sub: Demand Notice issued on 06.01.2023 demanding payment
of INR 3,59,78,456 under the Insolvency and Bankruptcy
Code, 2016 read with Rule 5, Insolvency and Bankruptcy
(Application to Adjudicating Authority) Rules, 2016.

We represent Ambience Private limited, (APL / our Client).

Our Client has forwarded us the captioned Demand Notice which was
received by them on 11.01.2023, with instructions to issue an
appropriate response. Our response to your Demand Notice is below:

Incomplete Demand Notice / No Invoice or Ledger attached

1. At the very outset, we notice that the said Demand Notice is

incomplete as the List of Documents cited in the Demand
Notice namely, 1. Copy of Invoices, and; 2. Copy of Ledger
Account maintained by your Company, have not been annexed.
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 On this account, the Demand Notice does not comply with the
requirements of Section 8, Insolvency and Bankruptcy Code,
2016 (I&B Code, 2016) read with Rule 5, Insolvency and
Bankruptcy (Application to Adjudicating Authority) Rules, 2016
and is hereby rejected.

2. Without prejudice to the above, we place on record the

following aspects which clearly demonstrates that none of the
particulars of the debt / transactions / outstanding as stated
in the said Demand Notice is correct. More fully, none of the
claims are admitted or outstanding as on date and your claim
to the said amounts are denied and disputed. Kindly note as
follows.

Contract / Transaction between parties

3. To your knowledge, our Client is a well reputed real estate

developer, having multiple projects providing housing,
commercial and other real estate spaces in Delhi NCR. During
the period 2017 – 2019, our several representation received by
your Client regarding workmanship and several warranties
provided as to the services rendered by your Company, our
Client issued Letters of Awards awarding contracts of
waterproofing and allied services to be rendered by your
Company. Separate Letters of Awards were issued by our
Client, for the real estate projects developed by our Client, ear
marking specifically the work required to be executed by your
Company.

4. Each of the said Letters of Award were followed by separate

Work Orders issued from time to time, the payments were

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 released by our Client in tranches as per the terms of the
Letters of Award, in phases. The said Letters of Award
specifically defined timelines to be adhered to, the quality of
work to be provided and the applicable warranties. It was also
specifically provided that any defaults on the part of your
Company to strictly comply with the term of the Letters of
Award, read with the Work Orders, would result in imposition
of penalties and liquidated damages.

Defaults committed by Guarantors Infrastructure

5. During this period, there were several defaults committed by

your Company in the projects of our Client (APL) as also some
of the other projects of the Group Companies in their respective
projects. In view of the said defaults committed by your
Company our Client terminated and foreclosed the work orders
with your Company. In some cases, payments were fully made
to you Company when the defaults were noticed to not be
matching the projected / warranted workmanship, and in other
cases were retention amounts were with our Clients, the
liquidated damages and penalties were imposed.

Prior Existing Dispute / Imposition of Liquidated Damages

6. In the above context, our Client / APL issued a letter to your

Company on 29.03.2022, whereby a debit note in the amount
of INR 1,34,18,358 was issued to your Company deducting the
amount of penalties and liquidated damages from the permitted
retention amounts under the Letter of Awards, Work Order No.
30 dated 07.04.2017, Work Order No. 645 dated 08.03.2019

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 and Work Order No. 70 dated 22.05.2019. A copy of the letter
is herein annexed as Annexure A-1 for your ready reference.

7. In the said letter dated 29.03.2022, it was categorically brought

to your notice the nature and extent of defaults that had been
committed by your Company, on account of which our Client
has imposed liquidated damages, penalty for delay and penalty
for deficiencies in the execution of work. Broadly, the following
the defaults under the Letter of Award, were indicated to you:

a. In terms of Clause 19, Work Order No. 30 dated

07.04.2017, your Company failed to provide Performance
Guarantee in the value of the work done for 15 years.

b. Despite the express warranty that the life of

waterproofing system is more than 35 years, our Client
saw visible water leakage problems causing damage to
buildings and equipments immediately on completion of
works.

c. Your company failed on timely delivery of materials,

installation and craftmanship strictly with the timelines
stipulated in the Work Orders.

d. On account of the poor delivery of work, our Client was

unable to handover possession of the completed units to
their allottees which resulted our Client incurring losses
and facing unwarranted litigation from the allottees.

e. On account of the deficiencies in work and the poor

quality of work, our Client was required to engage
another contractor to have the work completed or

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 repaired at an enhanced cost which are required to be
recovered from your company.

f. Illustratively, in the project at Ambience Tiverton, Noida,

several leakage issues were spotted at different places
viz. Basement -1, Basement – 2, several places of parking
area and Towers B-1, B-2, A-4 and Club Houses. The
pictures of water leakage and seepage were annexed to
the letter dated 29.03.2022.

8. Your Company did not respond to the above debit note, thereby
acknowledging the liquidated damages so imposed on your
Company which stood deducted from the retention amount
that was permitted to be retained under the Work Orders.

No proof of work completed or proof of service of Invoices

9. The purported Demand Notice under Section 8, I&B Code

appears to have been issued by your Company in a thoroughly
motivated manner, and aimed as a counter blast to the
liquidated damages imposed on your Company by our Client.
Be it as it may, it is writ large that the so called claims raised
by your Company in the purported Demand Notice are not
payable and have been specifically disputed by our Client in
several email exchanges including the letter dated 29.03.2022,
even prior to the issuance of the Demand Notice.

10. It will also be noted that you have not provided any particulars
or explanation as to the purpose for which each of the said
Invoice was raised by your Client. There is no mention as to
under which of the Letters of Award or the corresponding Work
Order for which the Invoices have been averred to be issued.
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 There is no mention as to the purpose of the Invoice, for the
services rendered by your Company, and whether the said
Invoice was ever issued to our Client or not. Your Company has
not issued any proof of having delivered the said alleged
invoices, and whether there was any acceptance to pay the said
Invoices that was issued by our Client.

11. Separately, you will not that the payment under the Letter of
Award are subject to several conditions, such as completion of
the works to the satisfaction of our Client. This would be
followed by Issuance of Completion Certificates and Testing
Acceptance. None of the details to support your contention that
services have been rendered to the satisfaction of our Client
has been produced. The purported Demand Notice is liable to
be rejected on this ground alone, as none of the criticial
particulars or documents in support of actual provisions of
good or services have been annexed to the said Demand Notice.
We hereby specifically deny each and every Invoice referred in
the said Demand Notice, and state that no amount is payable
or outstanding against the said Invoices.

Demand Notice wrongly issued to APL for third party contracts

12. Further, your Company has falsely included references to

several alleged invoices not limited to those pertaining to our
Client, but also invoices in respect of Work Orders issued by
other companies of Ambience Group for their respective
projects. Indicatively,

Sl. Work Order Work Order Placed by

No. (Company)

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 1. Work Order No. Ambience Facilities
362 Management Pvt Ltd
2. Work Order No. Ambience Developers
361 Infrastructures Pvt Ltd
3. Work Order No. Ambience Facilities
289 Management Pvt Ltd
4. Work Order No. Ambience Facilities
118 Management Pvt Ltd
5. Work Order No. Ambience Facilities
93 Management Pvt Ltd
6. Work Order No. Master Nihal Singh Memorial
647 Education Society
7. Work Order – Master Nihal Singh Memorial
Gurgaon Education Society
8. Work Order – Master Nihal Singh Memorial
Safdarjung Education Society
School
9. Work Orders – Ambience Towers Pvt Ltd
Shalimar Bagh
10. Work Orders - Ambience Developers
Rohini Infrastructures Pvt Ltd

Therefore, no demand could be raised, even assuming, if any

outstanding under these invoices, as the said work orders
have been placed by other entities other than our Client.

Inflated Invoices / Demand Notice for making unlawful gains

8. We also note that there are several invoices mentioned in your

said Demand Notice for which payments already stand

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 released to your Company by our Client. Therefore, inclusion
of these invoices for which payments have been released by
our Client is completely malafide and appears to have been
done with the sole intention to extort money from our Client
and make even for. We reserve our rights to produce proof of
payment, if your chose to provide copies of the said Invoices
and Ledger Account, as these documents are absent from the
said Notice.

9. Your company may be advised by your counsel that Section 8,

I&B Code, 2016, Demand Notices cannot be issued to recover
any amount which is subject matter of dispute or for undue
enrichment. You will also note that our Client is a solvent
company, owning and developing multiple real estate projects.
There is no question of initiating any Insolvency case against
our Client, for denying to pay your concocted and conjured
upon claims.

10. As indicated above the purported Demand Notice has not been
issued in terms of Section 8, I&B Code, 2016 as it is
incomplete and none of the documents have been annexed as
required thereunder. In any event the claims sought to be
raised in the said purported Demand Notice are either false or
already paid by our Client. Your company has also inflated the
alleged outstanding / debt by including invoices under
transactions with other companies of the Ambience Group,
where our Client i.e., APL is not a party.

Inclusion of time barred debts and unadjudicated claims to

inflate claims

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11. Several purported Invoices referred in the Demand Notice
pertains to a period before 2020, as such these invoices, even
assuming ever exists, are now time barred. The Demand
Notice drawn on the premise of time barred invoices is liable
to be rejected entirely. It appears that you have included these
time barred invoices, only in order to inflate the value of
claims for the purpose of clearing the hurdle of pecuniary
requirement.

12. It also appears that you have sought to claim exorbitant

interests and claiming retention amount, without first
demonstrating that these payments were ever agreed to be
paid or adjudicated to be due and payable to your Company.
As discussed above, certain amounts of retention money,
which our Client is contractually entitled to withhold on
account of deficiency of services and delay in execution, have
been so withheld. Your Company cannot claim the said sum
as a matter of right, especially when several defaults had been
committed by your Company.

13. In view of the above, we reject the Demand Notice issued by

your Company dated 06.01.2023. In the event, your Company
seeks any elaborate response of how the payments have been
discharged by our Clients as against each of the relevant
invoices issued by your Company, which were payable by our
Client, we hereby direct you to produce each and every invoice
issued by your Company to our Client, along with the
particulars of the works executed by your Company as
accepted in testing.

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14. Upon receiving the said documents / invoices, if any, we will
provide you with sufficient details / information, as to how the
said invoices were paid and / or discharged by our Client i.e.,
APL. In any event, you will note that no amount as on date
stands due or payable by our Client to your Company. None of
the invoices purportedly issued by your Company in respect of
the stated outstanding as referred in the said Demand Notice
was ever received by our Client or ever admitted or
acknowledged.

The present reply is issued on a without prejudice basis. Nothing

contained in the present Reply shall amount to admission or waiver
of any right or contention available to our Client whether under the
Contract or under the Law to proceed against your Company under
the respective Work Orders to recover such damages and losses as
may be required to adequately compensate our Client for the
deficiency of services rendered by your Company. We specifically
reserve our right to respond to your Demand Notice in a detailed
manner, once the documents are provided to us, if any.

With Regards

V. Anush Raajan
Advocate
MS1378/2009

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