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2023 (1) TMI 456 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHIMaintainability of appeal - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - operational debt above the threshold limit is due and payable or not - existence of pre-existing dispute between the parties or not - HELD THAT:- The Operational Creditor in the Company Petition filed under Section 9 of IBC had claimed Rs. 8,17,678.54 and interest of Rs.1,46,052/- from the Corporate Debtor. It is also noted that the Appellant in support of their contention that outstanding payments were due has relied on the fact that payments continued to be received from the Corporate Debtor from time to time till as late as 30.06.2019. The Adjudicating Authority has also taken cognizance of the email dated 21.05.2019 and that after taking note of the rival contentions of both the sides has taken a view that the said email is “very unconventional” in the light of the fact that the Corporate Debtor has been disputing the services rendered by the Operational Creditor. There is nothing wrong on the part of the Adjudicating Authority in holding the email to be “unconventional” especially in the light of disputes raised by the Corporate Debtor with respect to services delivered by the Operational Creditor which we shall look into separately in the succeeding paragraphs. But for the fact that better phraseology than the word “unconventional” could have been used by the Adjudicating Authority, we otherwise agree with the Adjudicating Authority that the email is curiously issued without bearing the name and designation of the authorized employee of the Corporate Debtor - Investigating any ingredient of fraud in the said email being beyond the remit of the summary jurisdiction bestowed upon the Adjudicating Authority under Section 9 of the IBC, we also note that the Adjudicating Authority has correctly desisted from examining the elements of alleged fraud, if any. Whether there is any pre-existing dispute between the two parties? - HELD THAT:- The Corporate Debtor has been sending email communications to the Operational Creditor on the shortcomings in the quality of services extended by them. We also find that the Operational Creditor has also admitted deficiency in services in their email dated 27.02.2016 as at page 421 of APB. Furthermore, it has also been submitted by the Learned Counsel for the Respondent that the Operational Creditor on 29.08.2018 had admitted vide an email communication that one of their staff responsible for executing the contractual obligations towards the Corporate Debtor was working in an unethical manner and in derogation of standard of service quality contemplated under the contract. That services continued to be received by the Corporate Debtor even after the last email dated 14.03.2019 in which they allegedly raised certain disputes, does not negate the existence of dispute between the parties - there are no cogent reasons to disagree with the Adjudicating Authority that disputes have been raised by the Corporate Debtor prior to issue of demand notice. It is well settled that in Section 9 proceedings the Adjudicating Authority is not to enter into final adjudication with regard to existence of dispute between the parties regarding operational debt. What has to be looked into is whether the defence raises a dispute which needs further adjudication by a competent court. Disputes pertaining to contractual issues are not to be resolved in Section 9 proceedings. If we apply the test laid down in Mobilox [2017 (9) TMI 1270 - SUPREME COURT] by the Hon’ble Apex Court to the facts of the present case it is clear that the defence raised by the Corporate Debtor in their reply filed in Section 9 application is not illusory or moonshine. The present is neither a case where there is undisputed debt for which insolvency can be asked by the Appellant to be initiated. The Adjudicating Authority has, therefore, correctly applied the ratio of the Mobilox Judgment in dismissing the Section 9 application. The Adjudicating Authority has rightly dismissed the application of the Appellant filed under Section 9 of IBC - the impugned order does not warrant any interference - Appeal dismissed.
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