TMI Blog2017 (11) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent company to the applicant on receipt of the award of the pending International arbitration. Needless, to say that adequacy of existence of dispute is not to be seen. Respondent has placed sufficient particulars in support of existence of dispute. In such scenario it can only be said that the claims and debts in question are not free from dispute. In the aforesaid factual background in our opinion the dispute raised by the corporate debtor qualify as a dispute as defined under sub-section (6) of Section 5 of the Code. For the reasons stated above this application is rejected. We make it clear that any observations made in this order shall not be construed as an expression of opinion on the merit of the controversy and the right of the Applicants before any other forum shall not be prejudiced on account of dismissal of instant application. - Company Petition No. (IB)-340(ND)/2017 - - - Dated:- 28-9-2017 - MR. INA MALHOTRA AND MR. S.K. MOHAPATRA, JJ. For The creditor : Prem Sarup Narula For The Debtor : Shobit Nanda and Saaduzzaman ORDER 1. This is an application filed under section 9 of the Insolvency and Bankruptcy Code, 2016 (for brevity 'the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty to the applicant to file a fresh application after complying with all the statutory provisions. 7. Subsequently, a Demand Notice under section 8 of the Code has been sent to the registered office of respondent corporate debtor on 17.07.2017 and e-mail was also sent to the Directors of the Company. It is stated that another demand notice dated 22.07.2017 has also been sent through post office at the registered office of the respondent company. It is stated that in response of demand notice sent by the applicant, the respondent company has sent reply to the operational creditor through its advocates dated 31st July 2017 mainly disputing the petitioner's claim. It is pertinent to state here that in response to the reply filed by the respondent, a rejoinder has been filed by the applicant on 19.09.2017. 8. Precisely, it is the case of applicant that the dues towards non-payment of salary is clearly an operational debt which exceeds Rupees one lac in satisfaction of section 4 of the Code. It is submitted that the applicant being the operational creditor and as the operational debt towards salary has not yet been paid, Corporate Insolvency Resolution Process needs to be tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (6) of Section 5 of the Code, the definition of dispute has to be given a wide meaning. 14. In the matter of Kirusa Software (P.) Ltd. v. Mobilox Innovations Private Limited. Company (AT) (Insolvency) No.06 of 2017 , having noticed different provisions of the 'I B Code' including meaning of dispute as defined under sub-section (6) of Section 5, the expression existence of dispute , if any , used in sub-section (2) of Section 8 of 'I B Code', Hon'ble Appellate Tribunal observed and held as follows:- 17. For the purposes of Part II only of the Code, some terms/words have been defined. Sub-section (6) of Section 5 defines dispute , to include, unless the context otherwise requires, a dispute pending in any suit or arbitration proceedings relating to: (a) existence of amount of the debt; (b) quality of goods or services; (c) breach of a representation or warranty. The definition of dispute is inclusive and not exhaustive . The same has to be given wide meaning provided it is relatable to the existence of the amount of the debt, quality of goods or services or breach of a representation or warranty. 18. Once the term dispute is given i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he dispute must also be relatable to the three conditions provided under sub-section (6) of Section 5(a)-(c) only. The words 'and recoul of the pendency of the suit or arbitration proceedings' under sub-section (2)(a) of Section 8 also make the intent of the Legislature clear that disputes in a pending suit or arbitration proceeding are such disputes which satisfy the test of sub-section (6) of Section 5 of the 'I B Code' and that such disputes are within the ambit of the expression, 'dispute, if any'. The record of suit or arbitration proceeding is required to demonstrate the same, being pending prior to the notice of demand under sub-section 8 of the I B Code'. 26. It is a fundamental principle of law that multiplicity of proceedings is required to be avoided. Therefore, if disputes under sub-section (2)(a) of Section 8 read with sub-section (6) of Section 5 of the 'I B Code' are confined to a dispute in a pending suit and arbitration in relation to the three classes 20 under sub-section (6) of Section 5 of the 'I B Code it would violate the definition of operational debt under sub-section (21) of Section 3 of the 'I B Code ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 8 of the Code. Secondly, the respondent has claimed that the company's property lying with the applicant has not been returned despite repeated demands. In this respect the applicant has admitted that company's two 7 to 8 years old vehicles were disposed of by him under justifiable reason and was duly appropriated. In that view of the matter the contention of the respondent regarding dispute and confusion on the amount of debt due, cannot be totally overlooked. Besides, there had been a bargain between the parties. The applicant has admitted in his application that there was a settlement between the parties and it was inter alia agreed that the balance amount shall be payable by respondent company to the applicant on receipt of the award of the pending International arbitration. Needless, to say that adequacy of existence of dispute is not to be seen. Respondent has placed sufficient particulars in support of existence of dispute. In such scenario it can only be said that the claims and debts in question are not free from dispute. 18. In the aforesaid factual background in our opinion the dispute raised by the corporate debtor qualify as a dispute as defined unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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