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2019 (7) TMI 1259 - AT - Insolvency and BankruptcyMaintainability of application - Initiation of Corporate Insolvency Resolution Process - pre-existing dispute or not - Section 8(1) of the ‘I&B Code’ - HELD THAT:- In an application under Section 9, it is always open to the ‘Corporate Debtor’ to point out existence of dispute, if any. Such existence of dispute should be that of a period prior to the issuance of the demand notice under Section 8(1) of the ‘I&B Code’. In MOBILOX INNOVATIONS PRIVATE LIMITED VERSUS KIRUSA SOFTWARE PRIVATE LIMITED [2017 (9) TMI 1270 - SUPREME COURT], the Hon’ble Supreme Court held that the existence of the dispute and/or the suit or arbitration proceeding must be pre-existing – i.e. it must exist before the receipt of the demand notice or invoice, as the case may be. From the aforesaid decision, it is clear that the existence of dispute must be pre-existing i.e. it must exist prior to issuance of the demand notice or invoice. If it comes to the notice of the Adjudicating Authority that the ‘operational debt’ is exceeding ₹ 1 lakh and the application shows that the aforesaid debt is due and payable and has not been paid, in such case, in absence of existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid ‘operational debt’, the application under Section 9 cannot be rejected and is required to be admitted. It is clear that the claim means a right to payment even if it is disputed. Therefore, merely because the ‘Corporate Debtor’ has disputed the claim by showing that there is certain counter claim, it cannot be held that there is pre-existence of dispute - In the present case, there is no record to suggest pre-existence of dispute with regard to the services rendered by the Appellant, the application under Section 9 should not have been rejected by the Adjudicating Authority on the ground that the dispute about the quantum of payment cannot be determined. Case remitted to the Adjudicating Authority to admit the application under Section 9 after notice to the Respondent.
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