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2020 (8) TMI 394 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - unpaid Operational Debt - pre-existing debt or not - Adjudicating Authority has rejected the application mainly on the ground that the Applicant has failed to prove the Operational Debt and its default and further on the ground of pre-existing dispute - HELD THAT:- Admittedly demand notice in Form 3, under Rule 5 of the Adjudicating Authorities Rules has been issued on 03 June 2019. In reply to the demand notice dated 14 June 2019 the corporate Debtor has acknowledged the receipt of the demand notice on 06 June 2019. Thus, reply to the demand notice is given within the statutory period of ten days. On perusal of the documents submitted by the parties, it is evident from the Letter dated 08.01.2019 which is signed by both the parties, that the Applicant had failed to complete the Tranche II Conditions Precedent as a result of which the Corporate Debtor had exercised its right under the BTA and set-off and adjusted the Tranche III payment of ₹ 6,00,00,000/-. It is further evident from the Letter of Corporate Debtor dated 06.03.2019, wherein the Corporate Debtor had demanded a refund from the Applicant of ₹ 15.01 Crores along with interest for violation of terms of Letter dated 08.01.2019 by the Applicant, in the same Letter the Corporate Debtor had also disputed that the Applicant is in non-compliance of the BTA and therefore is not liable to receive Tranche II and Tranche III payment under the BTA. These disputes by the Corporate Debtor are raised before the receipt of demand notices - there is a plausible contention in the defence raised by the corporate debtor which requires further investigation and that the alleged “dispute” is not a patently feeble legal argument or an assertion of fact unsupported by evidence. The Ld. Adjudicating Authority has rightly dismissed the application filed under Section 9 of IBC - Appeal dismissed.
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