Rejection of Section 9 application - Initiation of CIRP - ...

Tribunal Denies Insolvency Process Due to Pre-Existing Dispute Over Operational Debt from Agency Agreement Termination.

March 13, 2024

Case Laws     Insolvency and Bankruptcy     AT

Rejection of Section 9 application - Initiation of CIRP - pre-existing dispute - The tribunal meticulously analyzed the arguments from both sides and relevant legal provisions under the IBC. It focused on whether there was a plausible pre-existing dispute between the parties concerning the operational debt. - The NCLAT found that there indeed was a pre-existing dispute regarding the operational debt, primarily based on the appellant's breach of the Agency Agreement, leading to its termination by the respondent. The tribunal noted that the appellant's illegal activities and the subsequent termination of the agreement formed the basis of the dispute. - The tribunal concluded that the Adjudicating Authority (AA) did not err in dismissing the Section 9 application, as the operational debt was disputed.

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