The Appellate Tribunal upheld the Adjudicating Authority's ...

Tribunal Upholds Rejection of Section 9 Application Due to Pre-existing Dispute Over Quality of Supplied Goods.

November 29, 2024

Case Laws IBC AT

The Appellate Tribunal upheld the Adjudicating Authority's rejection of the Section 9 application filed by the Operational Creditor. The key points are: The Operational Creditor admitted to being unable to discharge obligations as per tender specifications, indicating a pre-existing dispute regarding the quality of pump sets supplied. The Adjudicating Authority correctly concluded that detailed inquiry into the pre-existing dispute was required, which is beyond its summary jurisdiction under IBC. Once plausibility of a pre-existing dispute is noticed, the Adjudicating Authority need not conduct further investigation. The Corporate Debtor's defence cannot be deemed moonshine or illusory. For such disputed operational debt, Section 9 proceedings cannot be initiated by the Operational Creditor. The Adjudicating Authority rightly rejected the application as conditions u/s 9 were not fulfilled. The Appellate Tribunal found no error in the impugned order and dismissed the appeal.

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The Appellate Tribunal upheld the Adjudicating Authority's ...

Tribunal Upholds Rejection of Section 9 Application Due to Pre-existing Dispute Over Quality of Supplied Goods.

November 29, 2024

Case Laws IBC AT

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