NCLT JUDGEMENT ON SECTION 9 OF THE INDIAN CONTRACT ACT, 1872, RULE 5 , 6 OF THE INSOLVENCY AND BANKRUPTCY (APPLICATION TO ADJUDICATING AUTHORITY) RULES, 2016 AND SECTION 4, 5(6), 8, 8(1), 8(2), 9, 9(3)(B), 9(5)(I)(A), 14, 15, 17, 18, 20, 21, 31(1), 33 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016


G Trans Logistics (India) Private Limited Vs. Emtex Engineering Private Limited, (2020) 06 NCLT CK 0048

NCLT allowed the application filed by the applicant against the Corporate Debtor under Section 9 of the Insolvency & Bankruptcy Code, 2016, (hereinafter referred to as the "Code") read with Rule 6 of the IBC, 2016 to initiate corporate insolvency resolution process in respect of Corporate Debtor. While allowing the application NCLT held that in the light of the decisions of the court , when we shall consider the case in hand then we are of the considered view that since it is specifically mentioned in Section 8(2) of the Code that within ten days from the date of the receipt of the demand notice, the corporate-debtor is required to bring to the notice of the operational-creditor, the existence of dispute or the documents regarding the payment of debt, therefore, we have no option, but to hold that since the corporate-debtor fails to give the reply of the demand notice and raised the disputes, hence after his appearance in response to the notice, he cannot raise it by filing the reply to the application, filed on behalf of the operational-creditor and this has also been held by another NCLT, Delhi Bench in the case of M/s. Jai Laxmi Traders v M/s. Mayasheel Retail India Ltd. IB-2184/(ND)/2019. For the reasons discussed above, we are of the considered view that in view of Section 9(5)(i)(a) since the application is complete, there is no payment of unpaid operational debt, which is more than Rs. 1 Lakh, which is the minimum threshold U/S 4 of the Code for initiating a proceeding U/S 9 of the Code and no notice of dispute as required U/S 8(2) of the Code is raised by Corporate Debtor. Therefore, we think it is proper to admit the application.

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