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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 ..... d by the Adjudicating Authority (National Company Law Tribunal, New Delhi, Bench-V) in IB 1677(ND)/2019. By which Order, the Adjudicating Authority has rejected the Application filed by the Appellant under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC in short). 3. Section 9 Application claims that debt is due on the Corporate Debtor on the basis of Agreement dated 28th November, 2014 and 15th June, 2018. It is submitted that the part payments were made by the Corporate Debtor to the Operational Creditor but when the Corporate Debtor failed to clear the debt outstanding dues, Demand Notice under Section 8 of IBC dated 30th April, 2019 was served. The Corporate Debtor sent Reply dated 25th May, 2019 to Section 8 Demand Notice t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by the Corporate Debtor by virtue of Agreement dated 28th November, 2014. The said Agreement has been projected as Annexure A-5(Colly). The subsequent Agreement dated 15th June, 2018 has also been relied on by the Appellant with regard to which Respondent has raised objection regarding execution. 10. Be that as it may, a perusal of the Agreement dated 28th November, 2014 indicates that the said Agreement entitled the Appellant to receive certain payment from the Corporate Debtor. The present cannot be said to be case of default in payment of instalment. The Agreement was not a kind of Settlement Agreement rather the Agreement gave rights and obligations to the parties hence the very basis of rejecting the Application by the Adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) bring to the notice of the operational creditor- (a) existence of a dispute, [if any, or] record of the pendency of the suit or arbitration proceedings filed before the receipt of such notice or invoice in relation to such dispute; (b) the [payment] of unpaid operational debt- (i) by sending an attested copy of the record of electronic transfer of the unpaid amount from the bank account of the corporate debtor; or (ii) by sending an attested copy of record that the operational creditor has encashed a cheque issued by the corporate debtor. ... 9. (1) After the expiry of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; (d) notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility; or (e) any disciplinary proceeding is pending4 against any proposed resolution professional: Provided that Adjudicating Authority, shall before rejecting an application 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) exist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Application under Section 9 is to be rejected by the Adjudicating Authority. The above provision clearly indicates that even in absence of notice 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. We thus are of the considered opinion that mere fact that Reply to notice under Section 8 (1) havin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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