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TMI Blog2020 (6) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Limited, whereby the Adjudicating Authority has rejected the Application filed by the Operational Creditor under Section 9 of the Insolvency and Bankruptcy Code 2016 (in short 'I&B Code'). Parties are represented by their original status of the petition for the sake of convenience. 2. The brief facts as stated in the petition are as follows: The Operational Creditor filed an Application under Section 9 of the Insolvency and Bankruptcy Code 2016 against the Corporate Debtor Roidec India Chemicals Private Limited for the alleged default on the part of the Respondent-Corporate Debtor in clearing the outstanding amount of Rs. 63,29,169/- (Rupees sixty-three lacs twenty-nine thousand and one hundred sixty-nine only) towards the ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Adjudicating Authority rejected the petition on the ground of a pre-existing dispute between the parties, before the receipt of the demand notice of the unpaid operational debt. The Adjudicating Authority has further failed to consider that the compliance under Section 9(3)(b) is not mandatory. 7. Heard the arguments of the Learned Counsel for the parties and perused the records. 8. It appears that the Adjudicating Authority has rejected the Application filed under Section 9 of the Code on the ground of pre-existing dispute between the parties and further on the ground that the Applicant failed to comply the statutory provision of Section 9(3)(b) of the Code. 9. Admittedly, demand notice in Form-4 is issued on 20th March 2019. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have been sent to us. In your notice you state that the amount claimed in your notice "is in default as reflected in the invoice attached to this notice". Unfortunately, neither from your notice nor from the documents sent therewith, it is unclear as how this amount of Rs. 63,29,169/- adds up... " 10. It is pertinent to mention that the demand notice against the Corporate Debtor was issued on 20th March 2019, which was delivered on the Corporate Debtor on 23rd March 2019. The Learned Counsel for the Corporate Debtor submitted that before issuance of demand notice there was a pre-existing dispute which is evident from the e-mail correspondence dated 19th January 2018 and 09th April 2018. The scanned copy of e-mail dated 19th January 2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 9(5)(2)(d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the "existence" of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the "dispute" is not a patently feeble legal argument or an assertion of fa.ct unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int out that the Operational Creditor has not filed the affidavit in compliance of provision Section 9(3)(b) of the Code. Section 9(3) of the Insolvency and Bankruptcy Code 2016 provides that: The Operational Creditor shall, along with the application furnish... (b) An affidavit to the effect that there is no notice given by the Corporate Debtor relating to a dispute of the unpaid operational debt. In the instant case, the Operational Creditor has not filed an affidavit in compliance of Section 9(3)(b) of the Code. The Counsel for the Operational Creditor submitted that the Adjudicating Authority has also dismissed the Application for non-compliance of the statutory provision of Sec 9 (3)(b) of the Code. But this cannot be ground of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt of demand notice, has not sent the reply to the Operational Creditor, then only, an affidavit to that effect can be submitted in terms of Section 9(3)(b) of the Code. But in a case where such notice has been sent, in reply to the demand notice by the Corporate Debtor 'an affidavit to that effect cannot be given'. In the instant case, after receiving the demand notice Corporate Debtor within ten days of receipt of the demand notice raised the dispute of the unpaid operational debt. Therefore, affidavit in compliance of Section 9(3)(b) could not be submitted. Thus, it is apparent that there is no default in not providing the affidavit in compliance of Section 9(3)(b) of the Code. 16. On perusal of the record, it is crystal clea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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