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TMI Blog2019 (9) TMI 1410X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Legal Notice on 26th August, 2015 denying the liability wherein after the Demand Notice u/s 8(1) issued by Operational Creditor on 25th October, 2017 - the claim of the Respondent Financial Creditor was not barred by limitation. The claim even if disputed, if default is more than ₹ 1 lakh, the Appellant will initiate the proceedings against the Corporate Debtor . Submission is made on behalf of the Appellant that the amount disputed by the Corporate Debtor amounts to existence of dispute but such submission cannot be accepted - It does not come within the meaning of existence of dispute. Dispute raised regarding quantum of amount in the absence of any suit or arbitration or other evidence, it cannot be said to be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity as mentioned below:- No. Invoice No. Date Amount 1 SI/M/12-13/0169 31.07.2012 44,84,231/- 2 SI/M/12-13/0170 31.07.2012 71,31,876/- 3 SI/M/12-13/0265 30.09.2012 3,13,580/- 4 SI/M/12-13/0347 01.11.2012 49,05,381/- 5 SI/M/12-13/0352 04.11.2012 15,07,614/- 6 SI/M/12-13/0353 04.11.2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 033/- and there are outstanding dues of ₹ 58,28,478/- along with interest of ₹ 36,73,378/- @ 18% as on 30.09.2017, totalling to a sum of ₹ 95,01,856/- is still payable. 6. Demand Notice u/s 8(1) was issued by the Respondent Operational Creditor on 25th October, 2017 which is the reason the Appellant has taken plea that the claim is barred by limitation. 7. However, from the record, we find that the Appellant Operational Creditor issued Legal Notice u/s 271 of Companies Act, 2013 within the period of limitation on 20th May, 2015 to the Corporate Debtor to pay outstanding amount of ₹ 58,28,478/- along with 18% interest with clear understanding that if payment is not made winding up proceedings will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an a right to payment even if it is disputed. The Code gets triggered the moment default is of rupees one lakh or more (Section 4). The corporate insolvency resolution process may be triggered by the corporate debtor itself or a financial creditor or operational creditor. A distinction is made by the Code between debts owed to financial creditors and operational creditors. A financial creditor has been defined under Section 5(7) as a person to whom a financial debt is owed and a financial debt is defined in Section 5(8) to mean a debt which is disbursed against consideration for the time value of money. As opposed to this, an operational creditor means a person to whom an operational debt is owed and an operational debt under Section 5(21) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the debt , which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under subsection (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court, it is clear that the claim even if disputed, if default is more than ₹ 1 lakh, the Appellant will initiate the proceedings against the Corporate Debtor . Submission is made on behalf of the Appellant that the amount disputed by the Corporate Debtor amounts to existence of dispute but such submission cannot be accepted. It does not come within the meaning of existence of dispute. Dispute raised regarding quantum of amount in the absence of any suit or arbitration or other evidence, it cannot be said to be pre-existing dispute. We find no merit in this appeal. The Appeal is dismissed. However, although the appeal is dismissed, this order will not come in the way of Appellant to settle the matter with the Respo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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