2019 (8) TMI 328 - AT - Insolvency and Bankruptcy

Maintainability of application - Initiation of Corporate Insolvency Resolution Process - existence of dispute or not - Operational Creditor - Section 9 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - As we find that there is a pre-existing dispute, we hold that the application under Section 9 was not maintainable. Appeal dismissed.

Summary

Issues:
1. Maintainability of the application under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Existence of a debt and/or dispute between the parties.

Analysis:
The Appellant, claiming to be an 'Operational Creditor,' filed an application under Section 9 of the Insolvency and Bankruptcy Code against the 'Corporate Debtor.' The Adjudicating Authority rejected the application based on various grounds. The Appellant argued that the application was maintainable as they had provided services to the Corporate Debtor. However, the focus was shifted to determining the existence of a debt or dispute rather than maintainability.

The Appellant's claim was based on facilitating the Corporate Debtor in obtaining a loan from a Financial Creditor and seeking payment for their services rendered as an agent/facilitator since 2015. The Respondent, on the other hand, referred to a letter dated 28th October, 2016, suggesting the existence of a dispute prior to the notice under Section 8 of the I&B Code.

In response to the Appellant's argument citing a Supreme Court decision, the Tribunal did not accept the submission, considering the specific dispute raised by the Respondent in the letter dated 28th October, 2016. The letter highlighted the failure of the Appellant's client to close any deal for debt funding and refinancing, contradicting the claims made by the Appellant. This pre-existing dispute led the Tribunal to conclude that the application under Section 9 was not maintainable, resulting in the dismissal of the appeal without costs.