2023 (11) TMI 314 - AT - Insolvency and Bankruptcy

Rejection of section 9 application - rejection on the ground of pre-existing dispute - appellant submits that Respondent never disputed the amount claimed by the Appellant, which is clear from emails between the parties. HELD THAT - The Adjudicating Authority has noted the termination of Work Order on 02.01.2019 whereas the Demand notice under Section 8 was issued on 20.05.2019. It is already noticed the demand notice issued even prior to Section 8 notice to the Corporate Debtor, one of such notice is dated 28.02.2019, which was filed along with the Section 9 application which was promptly replied and refuted by the Corporate Debtor and in the detailed reply which has been submitted by the Corporate Debtor all claims were disputed. It was clearly stated that no amount was due and payable to the Operational Creditor. The Adjudicating Authority did not commit any error in holding that there is a pre-existing dispute. When the Corporate Debtor even prior to issuance of demand notice has denied liability to pay, pre-existing dispute was there - there are no ground to interfere with the impugned order rejecting Section 9 application. Appeal dismissed.

Summary

Issues Involved:
The judgment involves the rejection of a Section 9 application by the Adjudicating Authority based on the existence of a pre-existing dispute between the parties.

Summary:
The Appellant filed an appeal against the order rejecting the Section 9 application, which was based on a pre-existing dispute due to the termination of a Work Order between the parties. The Corporate Debtor had issued legal notices denying the claims made by the Appellant, stating that no amount was due or payable. Despite the Appellant's submission that the Respondent never disputed the claimed amount, the Adjudicating Authority found that a pre-existing dispute existed, as evidenced by the Corporate Debtor's denial of liability even before the demand notice was issued.

Upon considering the submissions and perusing the record, the Tribunal upheld the Adjudicating Authority's decision, stating that the existence of a pre-existing dispute was evident from the Corporate Debtor's denial of liability prior to the issuance of the demand notice. The Tribunal concluded that there was no error in the Adjudicating Authority's finding and dismissed the appeal. However, the Tribunal mentioned that the Appellant could pursue proceedings in accordance with the parties' agreement before an appropriate forum as per the law.