Merely because Operational Creditor refused to accept the OTS proposal put forth by the Corporate Debtor cannot be a ground to reject the application under Section 9 of IBC | If Operational Creditor had initiated some proceedings under the MSMED Act, 2006, it does not debar the Operational Creditor in any way from the filing the application under Section 9 of the IB Code, 2016 – Sunstar Industries Vs. Syska Led Lights Pvt. Ltd. – NCLT Mumbai Bench
Hon’ble NCLT Mumbai Bench held that merely because the applicant refused to accept the OTS proposal put forth by the corporate debtor cannot be a ground to reject the application under Section 9. Similarly, if the applicant had initiated some proceedings under the MSMED Act, 2006 for the recovery of the outstanding dues, it does not debar the applicant in any way from the filing the application under Section 9 of the IB Code, 2016.