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2022 (3) TMI 951 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - rejection of application on the ground of pre-existing dispute between the parties - HELD THAT:- The section 9 Application shows very clearly that nine invoices mentioned earlier Judgment were all taken together as part of the operational debt owed by the Corporate Debtor to the Operational Creditor. There are force in the argument of Ld. Counsel for the Respondent that the operational debt relating to the invoices cannot be bifurcated so that only such invoices which are not disputed are considered for the admission of Section 9 application. There is quite obviously a major dispute relating to supply of eighty-four tons of raw material, regarding which there was a big delay in supplying causing disruption production schedule and also loss of money due to increase price of raw material that had to be sourced from the open market to the Corporate Debtor. Detailed examination also makes it clear that a dispute existed between the two parties regarding the debit note and the amount of debt and both the parties were trying to resolve it. The demand notice was issued by the operational creditor on 18.06.2019 and the email communication to resolve the dispute was taking place between the Corporate Debtor and the Operational Creditor much before the issue of demand notice by the operational creditor. gave no reply and thereafter section 9 application was filed by the Appellant/Operational Creditor for initiation of CIRP. Thus, the issue of non-supply of eighty-four tons of raw material, which resulted in the Corporate Debtor raising a debit note of ₹ 12.50 lakhs which was not accepted by the Operational Creditor and became an element of dispute, is sufficient to show that there was a pre-existing dispute between the Operational Creditor and the Corporate Debtor regarding the debt and its payment. This pre-existing dispute is not illusory or a sham one created only to counter the claim of the Operational Creditor by the Corporate Debtor, but a real one. The Adjudicating Authority has not committed any error in rejecting the section 9 application on the ground of pre-existing dispute - there are no reason to interfere with the impugned order - appeal dismissed.
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