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TMI Blog2022 (4) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... of dispute, Adjudicating Authority can reject the Application if there is record of dispute in the Information Utility. It goes without saying that record of dispute in the Information Utility can very well be pointed out by the Corporate Debtor before the Adjudicating Authority when notice is issued under Section 9. Further in Reply to Section 9 Corporate Debtor can bring the material to indicate that there are pre-existing disputes in existence prior to issuance of demand notice under Section 8. Thus, mere fact that Reply to notice under Section 8 (1) having not been given within 10 days or no reply to demand notice having been filed by the Corporate Debtor does not preclude the Corporate Debtor to bring relevant materials before the Adjudicating Authority to establish that there are pre-existing dispute which may lead to the rejection of Section 9 application. The matter is remanded back to the Adjudicating Authority to consider the Application afresh - appeal allowed by way of remand. - Company Appeal (AT) (Insolvency) No. 958 of 2020 - - - Dated:- 10-3-2022 - Justice Ashok Bhushan (Chairperson) and Dr. Alok Srivastava Member (Technical) For the Appellant: Mr. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence, we are not inclined to admit the application rather we are of the view the present application is liable to be dismissed. 6. Learned Counsel for the Appellant challenging the Order of the Adjudicating Authority contends that Adjudicating Authority committed error in rejecting the Section 9 Application holding that default of instalment of settlement agreement does not come within the definition of Operational Debt. He submits that under the Agreement dated 28th November, 2014 and 15th June, 2018, the Appellant was entitled to receive payment hence it cannot be said that no debt was due from the Appellant. He submits that the claim of the Appellant flow from the aforesaid Agreements and the Agreement cannot be discarded by observing that it was default of instalment of settlement agreement. 7. Learned Counsel for the Respondent refuting the submissions of the Learned Counsel for the Appellant submits that Corporate Debtor immediately replied to the Demand Notice dated 25th May, 2019 which has been filed at Page 214 of the Appeal Paper Book where claim of the Appellant was disputed. It is submitted that Reply to Section 9 Application, a detail Reply was filed by the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin time as per Section 8(2) of the IBC. The Demand Notice was issued on 30th April, 2019 and the same was replied on 25.05.2019 by the Respondent. Present is the case where there is no dispute with regard to the submission of Reply to Demand Notice by the Corporate Debtor before filing Section 9 Application. 12. One of the questions to be considered in the present case is as to; when Reply submitted by Corporate Debtor was not within 10 days from the receipt of the notice under Section 8, whether the Corporate Debtor is precluded to raise the issue of Pre-Existing Dispute before the Adjudicating Authority. We need to notice the provisions of Section 8, 9(1) and 9(5) which are to the following effect: Section 8: Insolvency resolution by operational creditor. 8. (1) An operational creditor may, on the occurrence of a default, deliver a demand notice of unpaid operational debt or copy of an invoice demanding payment of the amount involved in the default to the corporate debtor in such form and manner as may be prescribed. (2) The corporate debtor shall, within a period of ten days of the receipt of the demand notice or copy of the invoice mentioned in sub-section (1) br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication under sub-clause (a) of clause (ii) give a notice to the applicant to rectify the defect in his application within seven days of the date of receipt of such notice from the adjudicating Authority. Section 8(2) of the Code provides that the corporate debtor shall, within a period of ten days of the receipt of the demand notice or copy of the invoice mentioned in sub-section (1) bring to the notice of the operational creditor- (a) existence of a dispute. Section 9(1) of the Code provides that After the expiry of the period of ten days from the date of delivery of the notice or invoice demanding payment under sub-section (1) of section 8, if the operational creditor does not receive payment from the corporate debtor or notice of the dispute under sub-section (2) of section 8, the operational creditor may file an application before the Adjudicating Authority for initiating a corporate insolvency resolution process. Section 8(2) when read with Section 9(1), it is clear that Section 9(1) enables the Operational Creditor to file Section 9 application if no payment has been received by the Operational Creditor form Corporate Debtor or no notice of the dispute under sub-s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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