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2021 (9) TMI 144 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - pre-existing dispute between the parties prior to filing of the Application - HELD THAT - From the perusal of the Legal Notice dated 26.10.2019 issued by the Respondent, it is clear that the Respondent had raised a dispute with regard to the payments made to the Appellant. Further, the Appellant also replied to the Legal Notice issued by the Respondent on 15.11.2019 denying the contents as made in the Legal Notice. The events are prior to issuance of Demand Notice dated 26.11.2019. Therefore, this Tribunal is of the Prima facie view that there exists dispute prior to issuance of Demand Notice. Therefore, having arrived at a finding that there exists prior dispute between the Appellant and the Respondent, this Tribunal is not traversing into the merits of the case and as such, there is no illegality in the Impugned Order passed by the Adjudicating Authority dated 04.03.2021. Appeal dismissed.
Issues:
- Dismissal of Application under Section 9 of the Insolvency and Bankruptcy Code 2016 by the Adjudicating Authority. Detailed Analysis: Issue 1: Dismissal of Application under Section 9 of IBC 2016 - The Appellant filed an Appeal against the Order of the Adjudicating Authority dismissing their Application under Section 9 of the IBC 2016 against the Respondent/Corporate Debtor. - The Appellant contended that there was no existence of dispute and the Adjudicating Authority should have admitted the Application to initiate Corporate Insolvency Resolution Process (CIRP) against the Respondent. - The Adjudicating Authority held that a pre-existing dispute existed between the parties before the Application was filed, leading to the dismissal of the Application. - The Appellant argued that the money due against the goods sold to the Respondent constituted an 'Operational Debt' as per the Supreme Court's interpretation. - The Respondent admitted in a Notice that certificates were sold for a value lesser than the face value, and payments were made to specific individuals, not the Appellant. - The Respondent demanded payment from the Appellant, and in response, the Appellant denied the allegations and claimed non-receipt of payments, leading to a series of exchanges between the parties. - The Respondent raised a dispute regarding payments made to the Appellant before the Appellant issued a Demand Notice, indicating a pre-existing dispute. - The Tribunal found that a prior dispute existed between the parties before the Demand Notice was issued, aligning with the legal principles established by the Supreme Court. - Citing the 'Mobilox Innovations Private Limited -Vs- Kirusa Software Private Limited' case, the Tribunal concluded that the Appeal lacked merit and upheld the dismissal of the Application by the Adjudicating Authority. - The Appeal was dismissed, and no costs were awarded. This detailed analysis covers the dismissal of the Application under Section 9 of the IBC 2016, highlighting the key arguments presented by the parties, the Adjudicating Authority's decision, and the Tribunal's findings based on the existence of a pre-existing dispute.
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