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2020 (7) TMI 236 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - pre-existing dispute or not - HELD THAT:- The facts as narrated do not establish that the debt and default in question are not in dispute, as contended by the Applicant/ petitioner. The Petitioner, though places work orders in question, has not enclosed all other terms and conditions as mentioned in the work order so as to examine whether the Petitioner is entitled to claim the amount in question or not - The Petitioner got issued notice dated 28.06.2019 to the Respondent in the context of dishonor of cheques issued by the Respondent. In response to this notice also, the Respondent has issued a Reply dated 12.07.2019, through their Counsel, by inter alia pointing out the defective services and the reasons for stopping the payment, the failure to rectify the defective services etc. Subsequently, they have filed Criminal Complaint before Chief Metropolitan Magistrate at Bangalore, and the case is stated to be pending there and appeal against is also stated to be pending. The Petitioner issued yet another Demand Notice dated 25.06.2019, under Rule 5 of I&B, 2016, to the Respondent by inter alia demanding to pay the outstanding amount within a period of ten days on failure to pay the outstanding amount the instant Company Petition filed by seeking to initiate CIRP in respect of the Corporate Debtor and thus filed the instant Petition. The facts and circumstances shows that the amount claimed by the Petitioner is in substantial dispute, which is deemed to be pre-existing one. The Petitioner also invoked multiple remedies for same cause of action, which is not tenable basing on Principle of natural justice and doctrine of double jeopardy - It is also not in dispute that the Respondent has paid part amount for the work done, and the remaining claimed amount could not be paid due to the reasons explained supra. Admittedly, the Respondent is solvent Company having 40 employees and the Respondent has not paid the alleged amount due to the defective service rendered by the Petitioner. It is a settled position of law that provision of the code cannot be invoked when there is pre-existing dispute and it also cannot be invoked for the recovery of the alleged outstanding amount. Petition dismissed.
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