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2017 (11) TMI 194 - Tri - Insolvency and BankruptcyCorporate insolvency procedure - proof of existence of dispute - Held that:- All that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the "dispute" is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defense which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defense is likely to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application. At paragraph 45 of the said Judgement in relation to `existence of dispute' it has been observed as follows: Going by the aforesaid test of "existence of a dispute", it is clear that without going Into the merits of the dispute, the appellant has raised a plausible contention requiring further investigation which is not a patently feeble legal argument or an assertion of facts unsupported by evidence. The defense is not spurious, mere bluster, plainly frivolous or vexatious. A dispute does truly exist in fact between the parties, which may or may not ultimately succeed, and the Appellate Tribunal was wholly incorrect In characterizing the defense as vague, got-up and motivated to evade liability. In the light of the above the contentions of the Learned Counsel for the Petitioner relating to dispute may not be of much effect. Hence, taking into consideration all the above including facts and position of law, we are not inclined to admit this Petition and hence the Petition is dismissed, but without costs.
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