TMI Blog2017 (11) TMI 1640X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 34 is filed and rejected. However, for the purpose of I & B Code' no reliance can be placed on Section 34 of the Arbitration and Conciliation Act, 1996. The I & B Code' being a Complete Code will prevail over all other Acts including Arbitration and Conciliation Act, 1996. From the provisions made in the Form-5 if read with sub-section (6) of Section 5 and Section 9 of the I & B Code' it is clear that while pendency of the suit or Arbitral Proceeding has been termed to be an 'existence of dispute', an order of a Court, Tribunal or Arbitral Panel adjudicating on the default (commonly known as Award), has been treated to be a "record of Operational Debt". No person can take advantage of pendency of a case under Section 34 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Code' was not maintainable. 3. Learned counsel appearing on behalf of the Appellant-'Corporate Debtor' submitted that the 'Corporate Insolvency Resolution Process' cannot be initiated and decided when notice of dispute is issued to the 'Operational Creditor' under sub-section (2)(a) of Section 8 of the I B Code' bringing to its attention an 'existence of a dispute' or 'pendency of arbitration proceedings'. 4. Learned counsel appearing on behalf of the Appellant-'Corporate Debtor' further submitted that after Arbitral Award passed by the Arbitral Tribunal, the application under Section 34 of the Arbitration and Conciliation Act, 1996 having been preferred, it amounts to pendenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has to reject the application. 6. It was submitted that the Adjudicating Authority has erred in not considering that the Appellant while opposing the claims raised by the Respondent has also raised a counter claim of ₹ 19 crores before the Arbitral Tribunal. That fact that the counter claim was raised by the Appellant is itself sufficient to show that there is an 'existence of dispute' as brought to the notice of the 'Operational Creditor' pursuant to reply under sub-section (2)(a) of Section 8 of the 'I B Code'. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind that the learned Adjudicating Authority noticed the aforesaid plea at paragraph 6 of the impugned judgment, as quoted below: 6. In order to buttress his stand that applicant is an 'Operational Creditor' learned counsel has placed reliance on a portion of para 3.2.2 of the report of the Bankruptcy Law Reforms Committee Volume I: Rationale and Design and has argued that the report clearly brings out that the obligation to pay rent is certainly cover by the definition of expression 'Operational Creditors'. According to the learned counsel the expression 'Operational Creditor' used in section 5(20) and 5(21) of the Code must be construed to include the obligation to pay rent to the applicant as an 'Operationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of corporate insolvency resolution process. If the first question relating to status of appellant as 'operational creditor' is decided in affirmative, in favour of the appellant, then learned Adjudicating Authority will decide the issue whether the application is 'complete or not' and if not complete may grant seven days' time to the appellants to complete the record as per the proviso to Sec. 9 of the I B Code. 9. We have heard learned counsel for the parties and perused the record. 10. In 'Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software Pvt. Ltd.' (supra) the Hon'ble Supreme Court referred to the facts is to be considered by the Adjudicating Authority for admitting an application under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be enforced only after the time for filing the application under Section 34 has expired and/or if no application is made or such application having been made has been rejected. Therefore, for the purpose of Arbitration and Conciliation Act, 1996, an Arbitral Award reaches its finality after expiry of enforcement time or if the application under Section 34 is filed and rejected. However, for the purpose of I B Code' no reliance can be placed on Section 34 of the Arbitration and Conciliation Act, 1996, for the reasons stated below. 13. The I B Code' being a Complete Code will prevail over all other Acts including Arbitration and Conciliation Act, 1996. As per Section 238, provision of I B Code' is to override other laws, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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