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2021 (8) TMI 956 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - Pre-Existing Dispute or not - invocation of Arbitration Clause by Operational Creditors - time limitation - HELD THAT:- The contention of the Learned Solicitor General that the Application under Section 9 is barred by Limitation cannot be sustained as the Pre-Existing Dispute was an ongoing one continuing from the date when the Arbitration Clause was invoked by the ‘Operational Creditor’ themselves. Additionally, the fact remains that the Appeals under Section 37 were dismissed for default only on 29.11.2019. Hence, the Appeal cannot be stated to be barred by Limitation. Whether pendency of a proceeding for execution of an Award or a Judgement/decree bar an ‘Operational Creditor’ to prefer a Petition under the Code. The Judgement of M/S. ANNAPURNA INFRASTRUCTURE PVT. LTD. AND ANR. VERSUS M/S. SORIL INFRA RESOURCES LTD. [2017 (8) TMI 1330 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI] relied upon by the Learned Counsel is not applicable to the facts of this case as the ‘Dispute’ in this instant case is still pending as Arbitration under Section 37 Appeal is still pending till date. If the Appeal under Section 37 had been decided, then ‘Execution’ comes into the picture. ‘Money Recovery’ and ‘Triggering of Insolvency’ are not parallel proceedings. Section 8(2)(a) provides that Existence of a Dispute, [if any, or] record of the pendency of the suit or Arbitration Proceedings filed before the receipt of such Notice or invoice in relation to such Dispute. At the outset, what has to be seen is ‘whether there is any Existence of Dispute’, ‘if any or’ record of the pendency of the suit or Arbitration Proceedings - In the instant case, it is an admitted fact by both the parties that disputes arose way back in the year 2003 and 2004, and based on the terms of MoU entered into, the ‘Operational Creditor’ themselves invoked the Arbitration Proceedings. Both the Arbitral Awards were assailed by the ‘Corporate Debtor’ under Section 34 of A&C Act, 1996 and were dismissed by separate Orders dated 27.02.2012 and 29.02.2012 respectively - the Demand Notice was issued on 14.02.2020. The Application was filed on 02.03.2020. Upon restoration, the Appeal relates back to the original date of filing and therefore we note that there was a Pre-Existing Dispute prior to the date of issuance of the Demand Notice. There is a possibility that the ‘Corporate Debtor’ may succeed on any claim or part of the claim. Hence, it is apposite to observe that the ‘Operational Debt’ herein, could not be said to be an ‘undisputed debt’. Following the ratio in ‘Mobilox Innovations Pvt. Ltd.’ [2017 (9) TMI 1270 - SUPREME COURT] wherein it was inter alia held that so long as a dispute truly exists in fact and is not spurious, the Adjudicating Authority ought to have dismissed the Application. Appeals are allowed and the Impugned Order is set aside.
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