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For a pre-existing dispute to be a ground to thwart an application under Section 9 of IBC, the dispute raised must be truly existing at the time of filing a reply to notice of demand as contemplated by Section 8(2) or at the time of filing the Section 9 application – Writers and Publishers Pvt. Ltd. Vs. M/s Oriental Coal Corporation – NCLAT New Delhi

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NCLAT held that a plain reading of the Section 8 of IBC reveals that sub-section (2) of Section 8 obligates the Corporate Debtor who has been delivered a Demand Notice under Section 8(1) by Operational Creditor to bring to the notice of the Operational Creditor the “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”. There is a statutory purpose for requiring a Corporate Debtor for bringing into notice of the Operational Creditor about the existence of a dispute in its reply to Section 8(1) notice. The purpose is that if there is a dispute in existence, the same be immediately communicated to the Operational Creditor so that he charts out his next actionable step. If no mention of existence of dispute is made by the Corporate Debtor, the Operational Creditor can go ahead and file an application under Section 9(1).

For a pre-existing dispute to be a ground to thwart an application under Section 9 of IBC, the dispute raised must be truly existing at the time of filing a reply to notice of demand as contemplated by Section 8(2) or at the time of filing the Section 9 application – Writers and Publishers Pvt. Ltd. Vs. M/s Oriental Coal Corporation – NCLAT New Delhi Read Post »

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