2017 (10) TMI 1574 - AT - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - dispute raised regarding quality of services or not - existence of debt and dispute or not - HELD THAT - The document preferred by Operational Creditor was complete. In so far dispute is concerned any observations with regard to individual officer if made by a court of law or in a communication made by the Operational Creditor the same cannot be treated to be an existence of dispute . As there is no specific objection made by the Corporate Debtor in writing raising any dispute with regard to the quality of services as claimed to have been rendered by the Respondents- Operational Creditors no dispute can be raised at the stage of submitting reply under sub-section (2) of Section 8 of the I B Code . Appeal dismissed.

Summary

Issues:
1. Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor.
2. Existence of dispute regarding the application's maintainability.
3. Consideration of documents and court orders to determine the existence of a dispute.
4. Lack of specific objection by the Corporate Debtor regarding the quality of services.
5. Interpretation of Section 8 of the Insolvency and Bankruptcy Code.
6. Reference to the decision in "Mobilox Innovations Private Ltd v. Kirusa Software Private Ltd, (2017) SCC OnLine SC 1154."
7. Dismissal of the appeal with no order as to cost.

Analysis:
The judgment pertains to an appeal filed against an order passed by the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016, where an Operational Creditor initiated proceedings against a Corporate Debtor. The appellant contended that there was an existence of a dispute, rendering the application under Section 9 of the Code not maintainable. The appellant relied on documents, including a court order from the High Court of Judicature at Madras, to support the claim of a dispute.

Upon reviewing the documents submitted, the Tribunal found that the Operational Creditor's submission was comprehensive. The Tribunal clarified that mere observations by a court or in communications do not necessarily constitute an existence of a dispute. Notably, the absence of a specific objection by the Corporate Debtor in writing regarding the quality of services provided by the Operational Creditor meant that no dispute could be raised at the stage of replying under Section 8(2) of the Code. The Tribunal referenced the decision in "Mobilox Innovations Private Ltd v. Kirusa Software Private Ltd" to support this interpretation.

Ultimately, the Tribunal found no merit in the appeal and dismissed it. Despite the dismissal, no costs were awarded in the case. The judgment underscores the importance of clear and specific objections in raising disputes under the Insolvency and Bankruptcy framework, highlighting the need for formal written objections to challenge claims effectively.