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2023 (12) TMI 688 - AT - Insolvency and BankruptcyRejection of Section 9 application - rejection on the ground of pre-existing dispute - Appellant challenging the order contended that the debt was acknowledged by the Corporate Debtor even after Demand Notice - HELD THAT - From the materials which are brought on the record, the Adjudicating Authority has referred to letter dated 04.02.2021 issued on behalf of the Corporate Debtor to the Operational Creditor, where replying to the email dated 30.01.2021 from the Operational Creditor it was stated that there is no liability to pay. It was stated in the letter that no charge is payable by the Company on the bill which was raised by the Operational Creditor. The letter dated 04.02.2021 is at page 243 of the paper book. The Demand Notice was issued by the Operational Creditor on 08.02.2022 which Demand Notice was also replied on 18.02.2022 by the Corporate Debtor refuting the claim and the said notice dated 08.02.2022. The reply to notice dated 18.02.2022 is at page 249, where the Corporate Debtor has categorically stated that no amount is due. The letter dated 18.02.2022 is nothing but notice of dispute issued by the Corporate Debtor. The Adjudicating Authority has rejected the application on the ground of pre-existing dispute - thus, no error has been committed by the Adjudicating Authority. Coming to the submission of learned counsel for the Appellant that there are certain acknowledgements contained in interrogatory issued in a civil proceeding, when there is clear statement in letter dated 04.02.2021 and reply to Demand Notice dated 18.02.2022 denying the payment of dues raised by the Operational Creditor, there are no reason to accept the submission that debt was acknowledged. No error has been committed by the Adjudicating Authority by rejecting Section 9 application. There is no merit in the Appeal - Appeal is dismissed.
Issues involved:
The rejection of the application under Section 9 based on a pre-existing dispute. The Appellate Tribunal considered the appeal against the rejection of the application under Section 9 due to a pre-existing dispute. The Appellant argued that the debt was acknowledged by the Corporate Debtor even after the Demand Notice, contending that the rejection was unwarranted. The Adjudicating Authority referred to a letter from the Corporate Debtor stating no liability to pay, leading to the rejection of the application. Upon reviewing the submissions and records, the Adjudicating Authority highlighted a letter from the Corporate Debtor dated 04.02.2021, where it was mentioned that no charge was payable for the bill raised by the Operational Creditor. Despite a meeting to clarify the charge, the Corporate Debtor denied the payment obligation, leading to a notice of dispute. The Authority rejected the application based on this pre-existing dispute, a decision upheld by the Appellate Tribunal. The Corporate Debtor responded to a Demand Notice by the Operational Creditor, reiterating the absence of any due amount. This response, along with the earlier letter denying the payment obligation, led to the rejection of the Section 9 application. The Tribunal found no error in the Authority's decision, emphasizing that the debt was not acknowledged despite certain acknowledgments in other proceedings. The appeal was ultimately dismissed, with no merit found in the Appellant's arguments.
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