For a pre-existing dispute to be a ground to nullify an application u/s 9 of IBC, the dispute raised must be truly existing at the time of filing a reply to Demand Notice as contemplated by Section 8(2) of IBC or at the time of filing the Section 9 application – Amrop India Pvt. Ltd. Vs. The Hi-Tech Gears Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that: (i) From a plain reading of the Section 9 of IBC, it is clear that the existence of dispute and its communication to the Operational Creditor is therefore statutorily provided for in Section 8. (ii) It is a well settled proposition that for a pre-existing dispute to be a ground to nullify an application under Section 9, the dispute raised must be truly existing at the time of filing a reply to notice of demand as contemplated by Section 8(2) of IBC or at the time of filing the Section 9 application. (iii) It is well settled that in Section 9 proceeding, there is no need to enter into final adjudication with regard to existence of dispute between the parties regarding operational debt.

Related Posts

Scroll to Top