Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + AT Insolvency and Bankruptcy - 2020 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (9) TMI 948 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- All problems have started from June 2017 from the time the quality of material supplied in few lots were of inferior quality leading to production disruption to the Corporate Debtor. It is also clear that the dispute has been raised also against the reply to the demand notice and the demand notice was replied within due time as per the provisions of the Code. The Hon’ble Apex Court has observed in Mobilox Innovative Private Limited Vs. Kirusa Software Private Limited [2017 (9) TMI 1270 - SUPREME COURT] that “It is clear, therefore that once the Operational Creditor has filed an application, which is otherwise complete, the Adjudicating Authority must reject the application under Section 9(5)(2)(d) if notice of dispute has been received by the Operational Creditor or there is a record of dispute in the information utility - In the present case, it is clear that such notice must bring to the notice of Operational Creditor the “existence” of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the Adjudicating Authority is to see at this stage is whether there is a plausible contention which required 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 defence which is mere bluster.” Section 9(5) (ii) (d) of the Code, specifically provides for considering ‘Dispute’ by the Adjudicating Authority, empowering it to reject the Application and communicate the decision to the Operational Creditor and Corporate Debtor, if notice of dispute has been received by the Operational Creditor - “IBC is not a recovery law”. Its purpose is to save the companies and also to allow them to be going concern. Again, email dated 06.07.2017 does show pre-existing dispute regarding quality of supply. The impugned order dated 19.02.2020 passed by Adjudicating Authority (‘National Company Law Tribunal, Ahmedabad Bench, Ahmedabad’) is set aside - appeal allowed.
|